Apple to acquire digital magazine service Texture

After the Apple News+ news subscription service goes live, Apple confirms that the Texture will be closed by the end of May. Apple acquired Texture in March 2018, and Texture is the magazine subscription service, the predecessor of Apple News+. The report from The New York Post provides some details of Apple's acquisition of Texture.

Apple to acquire digital magazine service Texture

According to the report, Apple's acquisition of Texture cost at least $485 million. Apple pays in two ways. First, Apple paid $100 million to four publishers that launched Texture services, including Condé Nast, Hearst, Meredith, and Rogers Media. In addition, Texture's investor KKR also received a portion.

After Apple completed the Texture acquisition, it also guaranteed $145 million in payments to these publishers in the first year and $240 million in the second and third years. Simply put, Apple's acquisition of Texture includes a $100 million down payment, and $385 million will be paid in the next three years. Apple's acquisition of Texture is not for its technology, but for maintaining a good relationship with the four major publishers.

There are no more than 200,000 paying users for Texture, and when Apple News+ goes live, 48-hour subscribers are registered. Of course, Apple News+ is free for the first month, and after a month, how many users will stay to pay is the problem. In Apple News+'s revenue, Apple will extract 50%, and the remaining 50% will be reserved for major publishers. Of course, for the four major publishers Condé Nast, Hearst, Meredith and Rogers Media, whether Apple News+ will succeed, Apple will need the remaining $385 million.