Apple 'flexes its muscles' with subscription bundle that includes News Plus
Apple is selling a new monthly subscription service that bundles TV, music, news, games, cloud and a new fitness service for $29.95. Apple revealed the new package, called Apple One, as part of its fall product launch, where CEO Tim Cook and other execs showed off the next-generation Apple Watch and iPad.
Apple One is a service that Apple’s publishing partners have anticipated ever since Apple News Plus launched last year. Apple News Plus is a $9.99 monthly subscription program that digitally delivers hundreds of magazines to Apple users—but media companies have said the service has not delivered the millions of signups that they expected.
Apple One could be a new driver of readership if more subscribers are lured to it as part of a wider package that includes music and TV. Lori Malm, an Apple Service product manager, described the new subscription offer as “all the services in one simple plan.”
There is a $14.95 tier that comes with just cloud, music, TV and games, and for $29.95 consumers can add News Plus and Fitness Plus, which is a new program that incorporates video workouts with health tracking on devices. All the services on their own would cost close to $50 a month for an individual.
Noah Mallin, chief brand strategist at IMGN Media, says that Apple is “flexing its muscles” in the services area, where it competes with music apps like Spotify and video streaming subscription services like Amazon Prime.
“It comes back to consumers’ wallets and whether bundling all of this pulls them away from Roku and Prime Video as their base platforms of choice,” Mallin says.
Apple did not disclose how it will divvy up Apple One subscription fees with partners that publish games in Arcade or share articles to News Plus. When it first launched News Plus, Apple and media partners said the exact split of money would come down to a formula based on how many readers each publisher attracted in a given month.
After iPhone sales, services are Apple’s second-largest revenue driver, amounting to a $50 billion a year business. Fitness Plus opens a whole new sector to go after, putting Apple in direct competition for home-workout enthusiasts with companies like Peloton.
Apple prefers the subscription model, while it has discouraged advertising as a way to support the digital ecosystem. The company has been trying to encourage developers and publishers to embrace subscriptions while it locks down consumer data with privacy restrictions. Apple’s next software update with iOS 14, coming this fall, was set to impose the strictest policies yet, preventing app developers from collecting what’s known as the Apple identification for advertisers without first receiving the consent of the user.
After a backlash from the marketing technology and web development community, Apple said it would postpone the changes. Apple did not address its latest privacy plans at today's event.
It is clear, however, that it is still pushing subscriptions as its preferred path to monetization.
There are other tensions among the Apple developer community, too. Apple is in the middle of a legal battle with Epic Games, the maker of Fortnite, which has rebelled against Apple’s App Store rules. Apple and Epic are in a dispute over the 15 percent to 30 percent cut Apple takes from sales and subscriptions on its platform.
On Tuesday, Apple also unveiled its widely expected lineup of new watches and iPads, including a less-expensive Apple Watch SE model that costs $279. The more upscale Apple Watch Series 6 costs $399.
Apple mentioned brand partners Nike and Hermés that are designed into the watch bands and faces of specialty models.
Apple also showed off a new iPad and iPad Air, $329 and $599, respectively.
The event was Apple’s second major hardware launch during the COVID-19 pandemic era, and it was staged virtually, just like its iPhone unveiling in April. Apple also hosted its Worldwide Developer Conference online in June.