“The usual narrative to defend AppleNews+ [sic] is that the huge installed base of a billion iPhone users worldwide will warrant a revenue boost for the publications hosted on the platform,” Frederic Filloux writes for Monday Note. “To assess the impact of a fully deployed AppleNews+ I did the following calculation.”
“In the United States, the magazine industry generates annual revenue of $27B, a loss of more than 40 percent in ten years,” Filloux writes. “Divided by 225 million readers of magazines (according to the trade association), the Average Revenue per User (ARPU) amounts to $120 per reader and per year, all sources included. The revenue promised by Apple News+ is $9.9 a month => $119 a year. Minus Apple’s 50 percent cut, it gives a net income per reader of $59. By joining Apple News+, the US magazine industry will lose 50 percent of its revenue per reader.”
“The real uncertainty here is the ability of Apple to nearly double the number of people paying for a magazine in the United States where most subscriptions are already dirt cheap (only 13 percent of the magazines’ circulation revenue come from digital),” Filloux writes.
Read more in the full article here.
MacDailyNews Take: Could, not will. Who’s to say, at this early date, what could happen? Apple could triple or quadruple the number of people paying for a magazine in the United States or more!
An interesting bit of perspective here: In the United States, the magazine industry generates annual revenue of $27 billion. Last quarter, Apple generated quarterly revenue of $84.3 billion. Yes, in the last reported 90-odd day period, Apple posted more than 3X the entire U.S. magazine industry’s yearly revenue!
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Apple launches Apple News+ – March 25, 2019