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Apple News May Soon Add Paywalls

By Chris Neiger - Jan 31, 2016 at 2:44PM

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The tech titan could add a paywall system to give publishers more freedom in the app, and to open up a potential revenue stream.

Image source: Apple.

Apple's (AAPL 2.14%) News app may be about to undergo a major change. News may soon add the ability for publishers to sell subscriptions within the app and allow current content subscribers to login and and access their current content, according to Reuters. For example, if you subscribe to The New York Times, you may soon be able to view subscriber-only content directly from the Apple News app. And if you aren't a subscriber, you may soon be able to sign up to be one, from within Apple News. 

This isn't a particularly suspiring move, if Apple indeed goes down this path. The only way for Apple to make money from the News app right now is through advertising -- and it can likely make a lot more through subscriptions. 

The move could also be a great thing for content publishers. Around 100 publishers currently put their content in Apple News, but Reuters notes that they don't have a lot of access to information about the 40 million people who've already used Apple News. While the app comes preloaded on millions of iPhone and iPads (making it easy for iOS users to have access to a publisher's content), not having information about those readers -- or a way to convert them into subscribers -- isn't a great model for publishers. 

Extra, extra revenue
Of course, content publishers already have their own apps, but keep in mind that these content producers are constantly looking for new ways to attract more readers and subscribers. It's far easier for a user to open an app that comes preloaded on their smartphone (ahem, Apple News) than it is to get a user to go to an app store and download a publisher's app. 

Apple also has the benefit of having 800 million Apple ID accounts tied to credit card numbers, which could be used as an easy payment option to access paywall material within News. The barrier to convert readers into subscribers may be lower through Apple News, and publishers may be willing to give Apple a cut of their subscriber fees to have it. 

This, in turn, could bring Apple some additional revenue. How much is still unknown, but I think this is a better approach to making money from content than Newsstand was for Apple. Remember that app? Newsstand was the precursor to Apple News, where users kept their newspaper and magazine subscriptions. I think the difference with Apple News is that Apple and publishers will likely still keep a lot of articles open to users, unlike Newsstand. Publishers could then have the option to allow a preset number of free articles before users have to pay. 

Deadline unknown
It's still unknown when, or if, Apple will add a paywall system to Apple News. But at this point, it might be missing out if it doesn't. Facebook has already teamed up with publishers with its Instant Articles, and there are plenty of other great apps on the market that bring publishers's content into mobile users' hands for free. 

Apple could set itself apart from the other apps by giving publishers a way to make money from their articles, without requiring users to download a publisher-specific app. Content creators may not like the idea of handing over so much subscription control to Apple, but it may be a worthwhile trade-off if a paywalled News app can easily convert users into subscribers.

Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple and Facebook. The Motley Fool recommends The New York Times. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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