Apple scraps Newsstand, announces News, publishers respond

With all the hype at Apple’s WWDC surrounding the launch of its new digital music streaming service (Apple Music) as well as a new 24 hour global radio station (Beats 1), it was easy to miss one big announcement that could have a massive impact on the publishing industry. 

This is Apple’s plans to quietly scrap Newsstand, the content sharing service which currently stores and distributes newspapers and magazine content via an app, and replace it with something brand new: the simply-named News.

What’s potentially quite exciting, at least from a publisher’s perspective, is that Apple plans for this latest News app to be pre-loaded onto iOS9 – the latest version of its operating system which launches in September. So in theory this could potentially open up content to a much wider audience than is possible at the moment.

“We see great potential in this partnership to reach very, very large audience groups,” said Mark Thompson, president of the New York Times Co, one of several companies to have signed up to the new app. “We believe this is great way to get people who are less engaged with our brand to become more so,” he added.

Other partners that have been announced include The Economist, The Daily Mail, BuzzFeed, ESPN as well as titles from Vox Media, Condé Nast, Hearst and Time Inc. Nor is the New York Times the only company to have expressed excitement at the prospect of using Apple’s platform to distribute. “It’s going to give us an opportunity to reach people with our content, including younger readers,” said Scott McAllister, Time Inc.’s senior vice president of digital marketing and revenue. “Maybe some will fall in love with People magazine, and create a relationship with or the People app. That we can sell advertising around the content, and also have the ability to reach such a large audience, is equally exciting.”

John Kosner, the executive vice president of ESPN Digital agrees: “Teaming up with Apple News puts ESPN on the home screen of everyone’s device,” he told The Wall Street Journal.

There does remain the question though how useful will the new service be for magazines? Future’s Paul Hudson is optimistic. “I’m hugely excited by Apple News and the opportunity it’s going to bring digital publishers everywhere. It remains to be seen just how flexible the format is for magazines, particularly when Facebook’s Instant Articles has done a good job of bringing content to life in exciting ways, but we’ve already started investigating just what Apple News offers in terms of functionality and revenue offerings.”

Meanwhile Vijay Radhakrishnan co-founder and president of Magzter senses that there are still lots of unanswered questions that Apple needs to address. “We are closely watching the updates from Apple and trying to understand how Apple is going to help transform the Newsstand apps to just apps on the app store. I think there are lot of questions unanswered about the transformation which is the most critical part for any magazine on Newsstand.” Radhakrishnan adds that his company will unveil an exciting new product in this space in the coming weeks.

Others in the industry understand some of those publishers concerns, but feel that the move reflects the way that content needs to be distributed.

Nikolay Malyarov, EVP, chief content officer and general counsel of PressReader, said: “While I’m sure many media brands are worried about Apple’s announcement to tear down the Newsstand in favour of a less brand-focused app, I am delighted by the news because it validates what we at PressReader have been preaching for years. The future of news is in trusted aggregation where content discovery is frictionless and personalisation and presentation of that content is based on readers’ preferences and interests and not what editors think they should read. This could be the game changer this industry needs to propel it into the 21st century.”

And while these kinds of partnerships are sure to refuel the debate between publisher control and that of the increasingly powerful digital distribution outlets, it’s fair to say they are becoming more commonplace. This latest Apple initiative follows Facebook’s Instant Articles announcement last month which allows brands such as NBC News or National Geographic to post directly on to Facebook users’ News Feeds without taking them away from the social media platform to their own sites or apps. Similarly, earlier this year messaging app Snapchat launched Snapchat Discover which allows publishers to create bespoke content designed to appeal to the platform’s younger audience.

Importantly Apple said the arrangement with its News app will allow publishers to keep 100 per cent of the revenue from ads they sell themselves and 70 per cent of ad revenue generated by Apple’s iAd platform. These are broadly similar terms to those that Facebook is offering for its Instant Articles initiative.

This latest Apple News app has already been widely compared on the internet to the Flipboard newsreading app because of the way it allows readers to create their own customised news feeds in a graphics-rich stream. “Apple Just Cloned Flipboard And Named It News” read one headline in Tech Crunch, describing the service as little more than ‘Flipboard with search.’

However, Flipboard CEO Mike McCue told Bloomberg he was not worried. “Flipboard is more focused on sharing,” he said, noting that the company (which is reported to have had acquisition talks with Google, Twitter, and Yahoo) was already aware of Apple’s new app. “We’ve had Google ship a supposed Flipboard killer; we’ve had Facebook do that with Facebook Paper; we’ve seen Yahoo do that, and now Apple,” he added.

At WWDC 15, Apple’s vice president Susan Prescott walked the audience through the News app, explaining that it asks your interests to “get a sense of what you like,” in order to produce a more personalised content feed. In the presentation, Apple also stressed the aesthetic of the app, noting its layout functions help content to be arranged in a pleasing fashion, as well as what the company calls ‘rich typography’. Privacy is another important issue with Apple stating during its keynote that user data will not be shared with third parties.

However, whether News will prove more popular and profitable with publishers than Newsstand – which many complained buried their content – only time will tell.

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