Brief:

• The New York Times stopped publishing articles on Apple News, the iPhone maker's news aggregation app. Apple News didn't fit with the newspaper's goals of building direct relationships with paying readers, according a memo from COO Meredith Kopit Levien cited by the newspaper in its own report.

• The newspaper had hoped the Apple News would help to drive readers to its website and mobile app, giving it a chance to "fund quality journalism" from subscriptions, but Apple prevented that from happening, the report said.

• The Times doesn't expect the withdrawal from Apple News to have a serious effect on its revenue. The company will work with Apple on other projects such as apps, podcasts and hardware, Levien wrote in the memo.

Insight:

The Times' withdrawal from Apple News isn't likely to have any effect on mobile marketers that advertise in the newspaper's digital properties. Apple News shows articles inside the app without any ads, and prevents any web traffic to publisher sites. However, the move does highlight the ongoing friction between digital platforms and publishers that seek to monetize audiences with advertising sales and paid subscriptions, a pain point that's previously impacted Apple News due to the service's failure to produce notable revenue returns for its partners. Standalone news apps continue to face a challenge in providing a strong enough reason for publishers to run their content in the apps. 

For the Times, the withdrawal is unlikely to affect its efforts to boost paid subscriptions, a key source of revenue growth as advertisers shift their digital media spending to search and social media. The newspaper has worked to control its direct relationships with readers as much as possible, and in 2017 stopped publishing articles on Facebook using the social network's Instant Articles format for publishers. Facebook now pays the newspaper to include its stories in its Facebook News section that was introduced last year.

Apple is similarly unlikely to see a serious side effect from the withdrawal of the Times. The newspaper only supplied a few stories a day to Apple News, which has articles from hundreds of other sources. Apple News has an audience of about 125 million monthly readers, a massive reach that would be appealing to publishers who can monetize their readership. But as the Times notes, that strategy is questionable.

The decision to drop out of Apple News suggests the feature was not helping to fortify the Time's revenue streams during a period when many publishers are under immense pressure. Even as traffic figures spike, including for news apps, advertisers are pulling back on spending and keyword blocking some of the biggest news stories of the moment, including those related to the coronavirus pandemic and the Black Lives Matter movement. The central focus on brand safety has drawn criticism from publishers, some of which have urged advertisers to change their outlook and take a more granular approach to subjects like Black Lives Matter.    

The Times earlier this month laid off 68 people, predominantly in its ad sales department, according to an internal memo reported by Axios. Fake Love, the experiential agency the paper acquired in 2016, is also closing, per previous announcements made by the publisher.