Apple News Plus reaches 200K subscribers in first 2 days

Brief:

Apple's recently launched digital newsstand gained more than 200,000 subscribers to a free one-month trial in its first 48 hours, The New York Times reported. The tech giant last week introduced Apple News Plus while also announcing new services for video streaming, games and payments.
The number of sign-ups exceeds the subscription base for Texture, the "Netflix for magazines" service that Apple acquired last year as the basis for Apple News Plus, the Times reported. Apple plans to shut down Texture on May 28, leaving subscribers who use Google's Android and Amazon's Fire HD without service.
Apple charges $9.99 a month ($12.99 in Canada) for Apple News Plus, which showcases 300 magazines and newspapers from media companies including Condé Nast, Hearst and Meredith. Apple pockets half of the subscription revenue, and distributes the remainder to publishers based on how much time people spending reading their articles.

Insight:

It's too early to tell what Apple News Plus's early subscription numbers mean for mobile marketers, considering that readers may cancel the service after a one-month trial. At most, the strong start for the service suggests that Apple effectively drummed up interest with a recent star-studded launch event for the digital newsstand and other new services. However, Apple may need to add more publishers to Apple News Plus to boost the value proposition for readers and keep them around. The New York Times, Washington Post and Financial Times are absent, and many big-city newspapers are mostly shunning Apple, per The Associated Press. The Los Angeles Times and Toronto Star are available in the digital newsstand, and The Wall Street Journal provides a limited number of general interest articles to Apple News Plus to guard against cannibalizing its paid subscriber base.

Apple isn't selling ad space in the service, but advertisers can buy print ads directly from publishers whose magazines are featured in the digital newsstand and those ads will appear Apple News Plus. Privacy-focused Apple doesn't share data about its users with media companies, but they can report audited readership numbers to sponsors.

Apple is urging publishers to adopt its mobile-friendly Apple News Format. The format opens the possibility to dynamic features that aren't available in print ads, such as video, augmented reality (AR) and virtual reality (VR). Apple's ARKit, which helps software developers create AR experiences in their apps, is compatible with the Apple News Format, according to Apple documentation, which could appeal to marketers looking to bring their ads to life via AR. About half of the magazines in Apple News Plus used the Apple News Format at launch.

Faced with slowing iPhone sales, Apple seeks to sell more services like Apple News Plush to its users, with the goal of reaching $50 billion in services revenue by next year. Apple likely can sell services to 500 million to 600 million iPhone users worldwide, Timothy Arcuri, an analyst at UBS, estimated.

Apple News Plus currently is available in the United States and Canada, and Apple plans a rollout in the United Kingdom and Australia this year. While 200,000 subscribers exceeds Texture's total, the longer-term growth of Apple News Plus is still in question. Many people are willing to pay for news, which bodes well for Apple's digital newsstand, despite the widespread availability of free content. More than half (53%) of U.S. adults said they pay for news, according to a survey by the American Press Institute, but an equal number of digital subscribers to newspapers have never paid for a print version of that outlet. Many content providers don't have strong paywalls on their digital content, letting readers see news and information for free. However, a growing number of media companies are enforcing stricter paywalls to make up for digital ad revenue lost to rivals like Facebook, Google and Amazon.