“One of the big mysteries surrounding Apple’s acquisition of Texture, which serves as a backbone for Apple News+, was just how much Apple paid,” Evan Niu writes for The Motley Fool. “The tech titan never officially disclosed the price tag last year, and quarterly cash flow statements can only tell you so much.”

“For what it’s worth, regulatory filings show Apple spent $132 million (net of cash acquired) on business acquisitions in the first quarter of 2018, during which it also acquired and/or acqui-hired buddybuild and the tech team from Silicon Valley Data Science,” Niu writes. “The New York Post reported yesterday that Apple will end up paying a whopping $485 million for Texture after all is said and done.”

“That sum includes a $100 million up-front payment to four of the publishers (Conde Nast, Meredith, Hearst, and Rogers) that had created the joint venture that developed the service, as well as private equity firm KKR, which had invested $50 million in 2014,” Niu writes. “In addition to $100 million up front, Apple is paying a ‘minimum’ of $145 million to those four publishers in the first year, in addition to at least another $240 million for the second and third years combined, according to the report. That will put the total cost at $485 million or more over time.”

Apple News+

Apple News+


 
Read more in the full article here.

MacDailyNews Take: Licensing costs. Which also explains why Apple is running the service with a 50-50 split with publishers.

SEE ALSO:
Over 200,000 users subscribed to Apple News+ in its first 48 hours – April 2, 2019
One week with Apple News+ – April 2, 2019
Texture to shut down May 28th; Android users to lose access (unless they upgrade to an Apple device) – March 29, 2019
Apple News+ hands-on: Is it worth $9.99 per month? – March 26, 2019
Apple launches Apple News+ – March 25, 2019