said it will acquire Next Issue Media LLC and its digital-magazine-subscription service Texture, a product developed by top magazine companies that bundles together some 200 subscriptions into one monthly service.
The acquisition comes as Apple looks to beef up its services business, which includes music streaming and mobile payments.
Apple has set a goal of increasing total revenue from services to more than $40 billion by 2020. The company generated nearly $30 billion in services revenue in its fiscal year ended in September.
Apple typically takes a 15% cut of subscription services from publishers and content providers, including
and HBO, if those subscriptions are purchased through the App Store.
Terms of the deal weren’t disclosed. Next Issue Media and Texture are owned by Condé Nast,
, Hearst Corp.,
and KKR & Co.
The magazine industry for years has sought ways to transition from print to online, but has faced profound challenges competing with tech giants for digital ad dollars, while print ad revenue continues to decline.
Last year, Alphabet Inc.’s Google and Facebook Inc. accounted for more than 63% of U.S. digital ad spending, according to eMarketer, while the magazine world has been buffeted by steady cutbacks and numerous rounds of consolidation.
Next Issue, which launched in 2009, was envisioned as a way for publishers to compete against tech titans like Apple, whose app store has come to dominate distribution in the digital publishing marketplace.
In a joint statement, Texture’s key publishing investors said the sale was in line with the shifting marketplace the industry has faced.
“This new relationship with Apple not only will deliver new audiences and further the reach of our collective brands, but reflects the way consumers are engaging with media today as they look to discover content and subscribe with more convenience and ease,” they said.
Texture, which offers a monthly, $10 subscription to magazines such as Vanity Fair, Good Housekeeping, Time, Sports Illustrated, and National Geographic, fits into Apple’s effort to bring news and information to iPhone and iPad users. The company launched Apple News in 2015 and has been aggregating and providing news stories to iPhone users since then.
“We are committed to quality journalism from trusted sources and allowing magazines to keep producing beautifully designed and engaging stories for users,” said Eddy Cue, Apple’s senior vice president who oversees the services business.