Yesterday, the New York Times revealed a new deal that it is has made with Apple Inc. (NASDAQ:AAPL) to deliver an exclusive digital news package, dubbed “NYT Now,” on the iPhone, starting on April 2nd, 2014. Available only over Apple’s flagship smartphones, this special subscription will feature a selected set of articles chosen by a board of 10 editors from the general New York Times content. Utilizing the free NYT Now app, a subscription to the digital package will cost $8 monthly, or $96 per year, while existing Times subscribers will gain access at no charge.
The New York Times seems to intend NYT Now to be a highly focused, thrifty option for those who want only the cream of the news. The articles selected for inclusion in the subscription will focus on the most prominent stories and those deemed likely to be of greatest interest to Apple Inc.’s (AAPL) typical demographic. The selection available is meant to be partway between the 10 free articles available to anyone monthly on the Times site, and a full fledged subscription to the famous newspaper at $15 per month.
The arrangement is likely to prove profitable for both companies, since Apple users are clearly willing to pay well to obtain the news they want. As far back as 2012, Apple Inc.’s (AAPL) Newsstand aggregator was raking in $70,000 per day selling news stories, which annualizes to over $25 million. Demand has undoubtedly grown since then, along with the number of smartphone users, and the Times is well positioned to cash in on users’ hunger for high quality news content.
The New York Times has made some curious pricing decisions in the past, such as offering the same content on the iPhone for $15 monthly that it charges $20 per month to access on the iPad. Since the NYTimes app does not provide articles at the same price on different devices, it is uncertain if NYT Now will maintain its $8 per month price point across all devices if it is ever updated to include iPads as well as iPhones. A higher premium seems likely in this case, based on policy precedent, but there is no solid evidence to support a definitive conclusion.
The new app and associated subscription are set to debut on a Wednesday. There has been some speculation that the date of April 2nd was chosen for the release rather than April 1st in order to prevent mistaken beliefs that the new digital news package was an April Fool’s Day joke rather than a serious product. Be that as it may, Apple (AAPL) continues to develop its brand as a source of news with its latest pact with the New York Times, adding more functionality to the iPhone ecosystem and working to cash in on the surprisingly robust demand for paid digital news.
