Why Apple&039s JustAnnounced News Subscription Service Could Be a Hit Motley Fool

Apple's (NASDAQ:AAPL) rumored news service is finally here. The tech giant unveiled a subscription tier for its Apple News app on Monday that gave users access to hundreds of magazines and some of the world's leading newspapers.

The service, called Apple News+, is just one facet of Apple's invigorated attempt to ramp up its offerings segment, making its business less dependent on iPhone sales. But can the service gain meaningful traction with users? Current trends in subscriptions in general, as well as Apple's progress so far with its Apple News app, suggest the new subscription tier for Apple News has significant potential.

Apple News+. Image source: Apple.

Building on 85 million lively users

Apple News+ has a very strong basis. Indeed, the app has a larger target audience than any news app in the U.S. And the U.K., in line with information from comScore.

In addition, Apple said in its most recent income call that its Apple News readership hit a record high of more than 85 million monthly active users during the holiday quarter -- and that's in only three countries, as Apple had only launched the service in the U.S., the U.K., and Australia at the time.

Further, while the Apple News app is free, some users were likely already accustomed to paying for subscriptions through the app; users were able to pay for third-party news subscriptions and get access to premium content within the app. Apple News+, therefore, could be a logical add-on for some users -- particularly given how much is included in the subscription.

Apple News+ gives customers get entry to to over 300 famous magazines, consisting of Vogue, National Geographic Magazine, and People. In addition, The Wall Street Journal, Los Angeles Times, and Toronto Star are most of the newspapers supplying content material for the provider.

A subscription frenzy

While Apple's early momentum with its news app and the compelling value proposition of Apple News+ are already good reasons to believe the app will be a success, there's another key reason the new service will likely flourish: Digital subscriptions, in general, are booming.

In Apple's most recent income call, for instance, Apple CFO Luca Maestri said the company had garnered 360 million subscriptions across its services portfolio, up 120 million compared to the year-ago quarter.

"Given the ongoing strength and momentum in this part of the business, we now expect the quantity of paid subscriptions to surpass half of 1000000000 at some point of 2020," defined Maestri. "Our subscription commercial enterprise has grow to be very massive and varied, covering many unique categories from leisure to health and health to lifestyle."

For a greater specific instance of a fast-growing information-based totally virtual subscription, simply take a look at The New York Times (NYSE:NYT). The organisation's virtual subscription growth expanded inside the 2nd half of2019, with general virtual subscriptions at 3.4 million by way of the stop of the year, up 27% 12 months over year. 

Suffice it to say, Apple News+ looks poised to benefit from a solid foundation in the Apple News app itself and strong momentum in subscriptions overall.

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//www.fool.com/investing/2019/03/26/why-apples-just-introduced-information-subscription-servic.aspx
2019-03-26 12:46:00Z
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