Apple shares ended the US Monday trading session in the green, as the tech innovator announced it has agreed to purchase online magazine subscription service, Texture. No financial details have been published, but reports suggest that the consortium of owners are happy with the deal.
Apple shares closed 0.97% higher at $181.72. However, after-hours activity currently has the stock in the red.
Apple’s new investment
Texture is an online subscription service, similar to Netflix and Hulu, but for written content. For a single monthly subscription fee, users gain access to either entire magazine issues or a selection of articles from numerous publications, based on their preferences.
After starting out in 2010, the business has been in operation in its current guise since 2015 and was owned by a consortium of publishers and investors:
- Conde Nast.
- Meredith (who now owns Time Inc. who was an original investor).
- News Corp.
- KKR, a private equity firm.
Apple announced the news on its website, detailing that the deal was a positive one for the tech firm and supportive of quality journalism.
“We’re excited Texture will join Apple, along with an impressive catalog of magazines from many of the world’s leading publishers,” said Eddy Cue, Apple’s senior vice president of Internet Software and Services.
“We are committed to quality journalism from trusted sources and allowing magazines to keep producing beautifully designed and engaging stories for users,” Cue added.
The Texture app is currently available on both Apple and Android systems and there are said to be no plans to change that. Apple has already shown it’s a fan of the service after it gave the Texture App a ‘Best of’ award in 2016.
However, many are asking the question, why Texture? There are some opinions that it’s Apple way of supporting journalists and published media. Although, there are other ways it could do that.
What is clear, is that the Texture service will add a regular, repeat subscription income stream to Apple’s earnings. That’s something that would fit with the way it said it woudl spend its cash pile.
It would also be in line with Apple’s CEO Tim Cook’s comment at the recent shareholder meeting that he’s “not a fan” of special dividend payments, although he is working towards rewarding investors.