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Apple wants major newspapers to join new subscription service

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Following rumors that Apple is looking to enter the magazine distribution business with its own curated subscription service, a report on Friday claims the company is in talks with daily news giants to add their content into the mix.

Citing sources familiar with the matter, Recode reports Apple earlier this summer initiated talks to bring content from the New York Times, the Wall Street Journal and the Washington Post to an as-yet-unnamed subscription service rumored to debut sometime in 2019.

The project appears to be a priority, with executives high up on Apple's food chain, including SVP of Internet Software and Services Eddy Cue, involved in the ongoing negotiations. Whether the talks will bear fruit is unknown, but Apple is facing an uphill battle pitching the idea to papers that already benefit from successful subscription businesses.

Apple is widely rumored to be developing a news subscription service on the backbone of digital magazine distribution app Texture, the so-called "Netflix of magazines" that the tech giant bought earlier this year. Details of the supposed service are unknown, but rumblings suggest Apple intends to sell content to readers in low-cost bundles.

Texture, for example, charges users a flat $9.99 fee to access more than 200 magazines. In contrast, readers have to shell out $10 a month to read the Washington Post online, $15 a month for The Times and $37 a month for The Journal. The papers offer gated access, meaning readers can view certain stories for free, typically restricted to a monthly limit.

According to one executive familiar with the talks, content bundling is a sticking point for papers. Some believe one-to-one subscription relationships, like those offered by the NYT and other major papers, adds value to the overall product. Being part of a bundle takes away some of that shine, and potentially revenue depending on Apple's proposed terms. Further, papers would be beholden to Apple's whims, and fear they could be dropped from a bundle at any given time, the person said.

As noted by Recode, however, Apple's reach far extends that of any single publication. Fueled by continued demand for iPhone, Apple's user base swelled to 1.3 billion active devices in February, a number that likely grew over the intervening months.

In addition to a beefed-up Apple News service, which would presumably see Texture integration, Apple is rumored to launch an all-in-one subscription service that includes Apple Music, Apple News and a slate of original video content currently in development by its Worldwide Video division.