Apple is acquiring Texture, the digital magazine service that delivers stories from over 200 magazines, for an undisclosed amount.
The service has magazines such as People, Time, Forbes, National Geographic, Reader's Digest, Sports Illustrated, Vogue, The Atlantic, Rolling Stone, Vanity Fair, and Vogue on their service portfolio list. Over 200 magazines delivered via Texture's mobile app.
Apple Buying Texture Is Not About Revenues
Sitting on piles of cash amounting to a record $285 billion, Apple is not investing in a digital subscription service for the sake of profiting, as suggested by some analysts. The Cupertino, California-based company may well have other plans for such a strategically positioned service. Texture might be profitable by offering access to magazines for $9.99 a month but what is more important is who Texture represents and who actually owned the company before the acquisition.
Large publishers such as Conde Nast, Hearst, News Corp and Meredith (owners of Time Inc.) are among the founders of Texture back in 2009. The service was intended to be something of a Netflix or Hulu for media publishers. They also wanted to give distributors of digital content and aggregators such as Apple and Google a good run for their money.
It is unclear how much Apple paid for Texture but private equity firm KKR invested $50 million in Texture a couple of years ago. Common sense says they should have wanted back their initial investment, at least. Sources say that publisher investors are also happy to get their investments covered as well, which puts the deal valuation somewhere north of $80-100 million. Which is a meager amount compared to Apple's cash reserves.
Give Me All Those Magazines
Apple are looking for other benefits from a deal like that - they seek closer relationships with leading publishers and want to have a say in the delivery of digital subscriptions for news. Not the average news stream, however, but only stories by top-notch publishers, according to a press release by Apple.
We are committed to quality journalism from trusted sources and allowing magazines to keep producing beautifully designed and engaging stories for users. - Eddy Cue, Apple’s SVP of Internet Software and Services
Most of the leading publishers are for some time in a sort of a cold war with the leading tech companies like Apple, Google, and Facebook. Media people say they feel growing pressure from tech behemoths trying to overtake the media ecosystem, pushing for slightly distorted picture of news stories concerning their business practices, for instance.
The latest deal by Apple gives their management direct means of access to leading media publishers whose magazines are sold digitally and in print all over the world.
A Deal Too Obscured
That is why the info, or lack thereof, surrounding the deal is a bit alarming. The deal amount is not disclosed, which is a common practice when you acquire a private business, one would say. Nonetheless, Apple did not announce any future plans about Texture.
For his part, Texture CEO John Loughlin went on to say:
We could not imagine a better home or future for the service. - Texture CEO John Loughlin
This means just nothing nor does it give any hints on what the future may hold for the Texture service.
We are yet to see how Apple's new acquisition will integrate with their existing digital magazine subscriptions business. A more interesting question is how it will compete with digital magazine stands operated by Amazon and Google. Also, one should keep a good eye on future developments in this market where the interests of very large businesses are intertwine.
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