By CHRISTINE DOBBY
Tuesday, March 13, 2018
Apple Inc. is acquiring Texture, the all-you-can-read digital magazine service partly owned by Rogers Communications Inc.
For Apple, the move to buy Texture - which gives subscribers access to more than 200 U.S. and Canadian magazines for between $10 and $15 a month - is being hailed as another way for the iPhone maker to increase its service revenue. The company hopes to increase the money it earns from services such as movie rentals, music streaming and app downloads to US$50-billion by 2021.
For Toronto-based Rogers, meanwhile, the deal announced on Monday means the end of its ownership of the Texture platform, which it once touted as a solution to the beleaguered magazine-publishing business model as it focused on subscribers paying for content at a time when advertiser revenue was sharply declining.
Rogers purchased an equity stake in what was then known as Next Issue in 2013. The service, which Apple is purchasing for an undisclosed price, is also owned by Condé Nast Publications Inc., Hearst Corp., New York-based private equity firm Kohlberg Kravis Roberts & Co. and Meredith Corp.
"We are exceptionally proud that Apple, a world leader in content distribution and innovation, has recognized the value in Texture, a service we have cultivated and proudly grown over the last five years," Rick Brace, president of Rogers Media, said in an e-mailed statement.
He added that Texture will continue to feature Rogers Media magazines such as Maclean's, Chatelaine, Today's Parent and Hello! Canada.
In total there are 34 Canadian magazines on the platform.
Many Rogers customers receive Texture as a perk for subscribing to certain wireless plans, and spokeswoman Andrea Goldstein said Monday those customers "will continue to receive their free subscription from Rogers."
Customers who pay for the service will become subscribers of the service now owned by Apple, which will take over the billing, she said.
The U.S. publishers behind Texture launched the service in 2010 and when Rogers bought in and introduced it to Canadian customers in 2013, it came with a big marketing push. It is understood that Rogers committed to certain levels of promotional spending and met those targets in part through ads on its own media properties, which include the Sportsnet specialty channel and City-TV network as well as more than 50 radio stations across the country.
The new Canadian service quickly picked up customers in the early days but subscriber growth eventually stalled at about 100,000 users. Rogers does not disclose financial details on Texture but by the middle of 2016, Steve Maich, the senior vice-president in charge of publishing, said he expected the service would turn a small profit for the first time that year.
The U.S. side of the business failed to see enough subscriber growth to make the company a financial success, despite heavy spending on marketing and development. The magazines in the app displayed nicely on iPads and other tablets, but was less appealing to smartphone users, which resulted in a readership base that was older than expected. The investment firm KKR took a US$50-million stake in the business in 2014. In September, 2016, the company said it would slash the print publishing schedules of Maclean's, Chatelaine and Today's Parent and that it would stop producing print versions altogether for Canadian Business, Flare, MoneySense and Sportsnet magazines.
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Texture will continue to feature Rogers Media magazines such as Maclean's, Chatelaine, Today's Parent and Hello! Canada. In total there are 34 Canadian magazines on the platform.