Digging into Apple’s media transformation

Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch Editor-in-Chief, Matthew Panzarino, offered his analysis on the major announcements that came out of Apple’s keynote event this past Monday.

Behind a series of new subscription and media products, Apple has set the stage for one of the largest transformations in the company’s history. Matthew touches on all of Apple’s major product initiatives including Apple’s new credit card, its push into original content, its subscription gaming platform, and its subscription news service, which features Extra Crunch as one of the debut publications.

“I don’t think many of the things that Apple announced here, on an individual basis, are earth-shattering. I think it shapes up to be a really solid, nice offering for people with some distinct advantages but at the same time it’s not breaking huge molds here. I think the same thing applies across all of the offerings that they put out there.

I just felt that together, it’s solid but not scintillating and we need to see how they develop, how they launch, and then what they do with these platforms…

…Seems relatively straightforward. However, some of the stuff people have glossed over is very intriguing.”

Matthew goes into more detail on why he didn’t view the announcements as individually earth-shattering, and why he sees compelling opportunities for Apple to position its offerings as a symbiotic ecosystem. He also goes under the hood to discuss some of Apple’s overlooked competitive advantages in media and to paint a picture of how Apple’s new product lines might evolve in the long-term.

For access to the full transcription and the call audio, and for the opportunity to participate in future conference calls, become a member of Extra Crunch. Learn more and try it for free. 

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It’s a draw in latest Qualcomm v Apple patent scores

It’s Qualcomm 1, Apple 1 in the latest instalment of the pair’s bitter patent bust-up — the litigious IP infringement claim saga that also combines a billion dollar royalties suit filed by Cupertino alleging that the mobile chipmaker’s licensing terms are unfair.

The iPhone maker filed against Qualcomm on the latter front two years ago and the trial is due to kick off next month. But a U.S. federal court judge issued a bracing sharpener earlier this month, in the form of a preliminary ruling — finding Qualcomm owes Apple nearly $1BN in patent royalty rebate payments. So that courtroom looks like one to watch for sure.

Yesterday’s incremental, two-fold development in the overarching saga relates to patent charges filed by Qualcomm against Apple back in 2017, via complaints to the U.S. International Trade Commission (ITC) in which it sought to block domestic imports of iPhones.

In an initial determination on one of these patent complaints published yesterday, an ITC administrative law judge found Apple violated one of Qualcomm’s patents — and recommended an import ban.

Though Apple could (and likely will) request a review of that non-binding decision.

Related: A different ITC judge found last year that Apple had violated another Qualcomm patent but did not order a ban on imports — on “public interest” grounds.

ITC staff also previously found no infringement of the very same patent, which likely bolsters the case for a review. (The patent in question, U.S. Patent No. 8,063,674, relates to “multiple supply-voltage power-up/down detectors”.)

Then, later yesterday, the ITC issued a final determination on a second Qualcomm v Apple patent complaint — finding no patent violations on the three claims that remained at issue (namely: U.S. Patent No. 9,535,490; U.S. Patent No. 8,698,558; and U.S. Patent No. 8,633,936), terminating its investigation.

Though Qualcomm has said it intends to appeal.

The mixed bag of developments sit in the relatively ‘minor battle’ category of this slow-motion high-tech global legal war (though, of the two, the ITC’s final decision looks more significant); along with the outcome of a jury trial in San Diego earlier this month, which found in Qualcomm’s favor over some of the same patents the ITC cleared Apple of infringing.

Reuters reports the chipmaker has cited the contradictory outcome of the earlier jury trial as grounds to push for a “reconsideration” of the ITC’s decision.

“The Commission’s decision is inconsistent with the recent unanimous jury verdict finding infringement of the same patent after Apple abandoned its invalidity defense at the end of trial,” Qualcomm said in a statement. “We will seek reconsideration by the Commission in view of the jury verdict.”

Albeit, given the extreme complexities of chipset component patent suits it’s not really surprising a jury might reach a different outcome to an ITC judge.

In the other corner, Apple issued its now customary punchy response statement to the latest developments, swinging in with: “Qualcomm is using these cases to distract from having to answer for the real issues, their monopolistic business practices.”

Safe to say, the litigious saga continues. And iPhones continue being sold in the U.S.

Other notable (but still only partial) wins for Qualcomm include a court decision in China last year ordering a ban on iPhone sales in the market — which Apple filed an appeal to overturn. So no China iPhone ban yet.

And an injunction ordered by a court in Germany which forced Apple to briefly pull certain iPhone models from sale in its own stores in January. By February the models were back on its shelves — albeit now with Qualcomm not Intel chips inside.

But it’s not all been going Qualcomm’s way in Germany. Also in January, another court in the country dismissed a separate patent claim as groundless.

A decision is also still pending in the U.S. Federal Trade Commission’s antitrust case against Qualcomm.

In that suit the chipmaker is accused of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents. The trial wrapped up in January and is pending a verdict.

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It’s a draw in latest Qualcomm v Apple patent scores

It’s Qualcomm 1, Apple 1 in the latest instalment of the pair’s bitter patent bust-up — the litigious IP infringement claim saga that also combines a billion dollar royalties suit filed by Cupertino alleging that the mobile chipmaker’s licensing terms are unfair.

The iPhone maker filed against Qualcomm on the latter front two years ago and the trial is due to kick off next month. But a U.S. federal court judge issued a bracing sharpener earlier this month, in the form of a preliminary ruling — finding Qualcomm owes Apple nearly $1BN in patent royalty rebate payments. So that courtroom looks like one to watch for sure.

Yesterday’s incremental, two-fold development in the overarching saga relates to patent charges filed by Qualcomm against Apple back in 2017, via complaints to the U.S. International Trade Commission (ITC) in which it sought to block domestic imports of iPhones.

In an initial determination on one of these patent complaints published yesterday, an ITC administrative law judge found Apple violated one of Qualcomm’s patents — and recommended an import ban.

Though Apple could (and likely will) request a review of that non-binding decision.

Related: A different ITC judge found last year that Apple had violated another Qualcomm patent but did not order a ban on imports — on “public interest” grounds.

ITC staff also previously found no infringement of the very same patent, which likely bolsters the case for a review. (The patent in question, U.S. Patent No. 8,063,674, relates to “multiple supply-voltage power-up/down detectors”.)

Then, later yesterday, the ITC issued a final determination on a second Qualcomm v Apple patent complaint — finding no patent violations on the three claims that remained at issue (namely: U.S. Patent No. 9,535,490; U.S. Patent No. 8,698,558; and U.S. Patent No. 8,633,936), terminating its investigation.

Though Qualcomm has said it intends to appeal.

The mixed bag of developments sit in the relatively ‘minor battle’ category of this slow-motion high-tech global legal war (though, of the two, the ITC’s final decision looks more significant); along with the outcome of a jury trial in San Diego earlier this month, which found in Qualcomm’s favor over some of the same patents the ITC cleared Apple of infringing.

Reuters reports the chipmaker has cited the contradictory outcome of the earlier jury trial as grounds to push for a “reconsideration” of the ITC’s decision.

“The Commission’s decision is inconsistent with the recent unanimous jury verdict finding infringement of the same patent after Apple abandoned its invalidity defense at the end of trial,” Qualcomm said in a statement. “We will seek reconsideration by the Commission in view of the jury verdict.”

Albeit, given the extreme complexities of chipset component patent suits it’s not really surprising a jury might reach a different outcome to an ITC judge.

In the other corner, Apple issued its now customary punchy response statement to the latest developments, swinging in with: “Qualcomm is using these cases to distract from having to answer for the real issues, their monopolistic business practices.”

Safe to say, the litigious saga continues. And iPhones continue being sold in the U.S.

Other notable (but still only partial) wins for Qualcomm include a court decision in China last year ordering a ban on iPhone sales in the market — which Apple filed an appeal to overturn. So no China iPhone ban yet.

And an injunction ordered by a court in Germany which forced Apple to briefly pull certain iPhone models from sale in its own stores in January. By February the models were back on its shelves — albeit now with Qualcomm not Intel chips inside.

But it’s not all been going Qualcomm’s way in Germany. Also in January, another court in the country dismissed a separate patent claim as groundless.

A decision is also still pending in the U.S. Federal Trade Commission’s antitrust case against Qualcomm.

In that suit the chipmaker is accused of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents. The trial wrapped up in January and is pending a verdict.

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The danger of “I already pay for Apple News+”

Apple doesn’t care about news, it cares about recurring revenue. That’s why publishers are crazy to jump into bed with Apple News+. They’re rendering their own subscription options unnecessary in exchange for a sliver of what Apple pays out from the mere $10 per month it charges for unlimited reading.

The unfathomable platform risk here makes Facebook’s exploitative Instant Articles program seem toothless in comparison. On Facebook, publishers became generic providers of dumb content for the social network’s smart pipe that stole the customer relationship from content creators. But at least publishers were only giving away their free content.

Apple News+ threatens to open a massive hole in news site paywalls, allowing their best premium articles to escape. Publishers hope they’ll get exposure to new audiences. But any potential new or existing direct subscriber to a publisher will no longer be willing to pay a healthy monthly fee to occasionally access that top content while supporting the rest of the newsroom. They’ll just cherry pick what they want via News+, and Apple will shave off a few cents for the publisher while owning all the data, customer relationship, and power.

“Why subscribe to that publisher? I already pay for Apple News+” should be the question haunting journalists’ nightmares. For readers, $10 per month all-you-can-eat from 300-plus publishers sounds like a great deal today. But it could accelerate the demise of some of those outlets, leaving society with fewer watchdogs and storytellers. If publishers agree to the shake hands with the devil, the dark lord will just garner more followers, making its ruinous offer more tempting.

There are so many horrifying aspects of Apple News+ for publishers, it’s best just to list each and break them down.

No Relationship With The Reader

To succeed, publishers need attention, data, and revenue, and Apple News+ gets in the way of all three. Readers visit Apple’s app, not the outlet’s site that gives it free rein to promote conference tickets, merchandise, research reports, and other money-makers. Publishers don’t get their Apple News+ readers’ email addresses for follow-up marketing, cookies for ad targeting and content personalization, or their credit card info to speed up future purchases.

At the bottom of articles, Apple News+ recommends posts by an outlet’s competitors. Readers end up without a publisher’s bookmark in their browser toolbar, app on their phone, or even easy access to them from News+’s default tab. They won’t see the outlet’s curation that highlights its most important content, or develop a connection with its home screen layout. They’ll miss call outs to follow individual reporters and chances to interact with innovative new interactive formats.

Perhaps worst of all, publishers will be thrown right back into the coliseum of attention. They’ll need to debase their voice and amp up the sensationalism of their headlines or risk their users straying an inch over to someone else. But they’ll have no control of how they’re surfaced…

At The Mercy Of The Algorithm

Which outlets earn money on Apple News+ will be largely determined by what Apple decides to show in those first few curatorial slots on screen. At any time, Apple could decide it wants more visual photo-based content or less serious world news because it placates users even if they’re less informed. It could suddenly preference shorter takes because they keep people from bouncing out of the app, or more generic shallow-dives that won’t scare off casual readers who don’t even care about that outlet. What if Apple signs up a publisher’s biggest competitor and sends them all the attention, decimating the first outlet’s discovery while still exposing its top paywalled content for cheap access?

Remember when Facebook wanted to build the world’s personalized newspaper and delivered tons of referral traffic, then abruptly decided to favor “friends and family content” while leaving publishers to starve? Now outlets are giving Apple News+ the same iron grip on their businesses. They might hire a ton of talent to give Apple what it wants, only for the strategy to change. The Wall Street Journal says it’s hiring 50 staffers to make content specifically for Apple News+. Those sound like some of the most precarious jobs in the business right now.

Remember when Facebook got the WSJ, Guardian, and more to build “social reader apps” and then one day just shut off the virality and then shut down the whole platform? News+ revenue will be a drop in bucket of iPhone sales, and Apple could at any time decide it’s not thirsty any more and let News+ rot. That and the eventual realization of platform risk and loss of relationship with the reader led the majority of Facebook’s Instant Articles launch partners like the New York Times, Washington Post, and Vox to drop the format. Publishers would be wise to come to that same conclusion now before they drive any more eyeballs to News+.

News+ Isn’t Built For News

Apple acquired the magazine industry’s self-distribution app Texture a year ago. Now it’s trying to cram in traditional text-based news with minimal work to adapt the product. That means National Geographic and Sports Illustrated get featured billing with animated magazine covers and ways to browse the latest ‘issue’. News outlets get demoted far below, with no intuitive or productive way to skim between articles beyond swiping through a chronological stack.

I only see WSJ’s content below My Magazines, a massive At Home feature from Architectural Digest, a random Gadgets & Gear section of magazine articles, another huge call out for the new issue of The Cut plus four pieces inside of it, and one more giant look at Bloomberg’s profile of Dow Chemical. That means those magazines are likely to absorb a ton of taps and engagement time before users even make it to the WSJ, which will then only score few cents per reader.

Magazines often publish big standalone features that don’t need a ton of context. News articles are part of a continuum of information that can be laid out on a publisher’s own site where they have control but not on Apple News+. And to make articles more visually appealing, Apple strips out some of the cross-promotional recirculation, sign-up forms, and commerce opportunities depend on.

Shattered Subscriptions

The whole situation feels like the music industry stumbling into the disastrous iTunes download era. Musicians earned solid revenue when someone bought their whole physical album for $16 to listen to the single, then fell in love with the other songs and ended up buying merchandise or concert tickets. Then suddenly, fans could just buy the digital single for $0.99 from iTunes, form a bond with Apple instead of the artist, and the whole music business fell into a depression.

Apple News+’s onerous revenue sharing deal puts publishers in the same pickle. That occasional flagship article that’s a breakout success no longer serves as a tentpole for the rest of the subscription.

Formerly, people would need to pay $30 per month for a WSJ subscription to read that article, with the price covering the research, reporting, and production of the whole newspaper. Readers felt justified paying the price since the got access to the other content, and the WSJ got to keep all the money even if people didn’t read much else or declined to even visit during the month. Now someone can pop in, read the WSJ’s best or most resource-intensive article, and the publisher effectively gets paid a la carte like with an iTunes single. Publishers will be scrounging for a cut of readers’ $10 per month, which will reportedly be divided in half by Apple’s oppressive 50 percent cut, then split between all the publishers someone reads — which will be heavily skewed towards the magazines that get the spotlight.

I’ve already had friends ask why they should keep paying if most of the WSJ is in Apple News along with tons of other publishers for a third of the price. Hardcore business news addicts that want unlimited access to the finance content that’s only available for three days in Apple News+ might keep their WSJ subscription. But anyone just in it for the highlights is likely to stop paying WSJ directly or never start.

I’m personally concerned because TechCrunch has agreed to put its new Extra Crunch $15 per month subscription content inside Apple News+ despite all the warning signs. We’re saving some perks like access to conference calls just for direct Extra Crunch subscribers, and perhaps a taste of EC’s written content might convince people they want the bonus features. But even more likely seems the possibility that readers would balk at paying again for just some extra perks when they already get the rest from Apple News, and many newsrooms aren’t set up to do anything but write articles.

It’s the “good enough” strategy we see across tech products playing out in news. When Instagram first launched Stories, it lacked a ton of Snapchat’s features, but it was good enough and conveniently located where people already spent their time and had their social graph. Snapchat didn’t suddenly lose all its users, but there was little reason for new users to sign up and growth plummetted.

Apple News is pre-loaded on your device, where you already have a credit card set up, and it’s bundled with lots of content, at a cheaper price that most individual news outlets. Even if it doesn’t offer unlimited, permanent access to every WSJ Pro story, Apple News+ will be good enough. And it gets better with each outlet that allies with this Borg.

But this time, good enough won’t just determine which tech giant wins. Apple News+ could decimate the revenue of a fundamental pillar of society we rely on to hold the powerful accountable. Yet to the journalists that surrender their content, Apple will have no accountability.

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Apple News+ is a great deal, but what does ‘full access’ really mean?

Curious whether you should cancel your existing magazine subscription and just subscribe to Apple News+?

Apple certainly seems to believe News+ is an outsized bargain for you. The company’s claim that it would cost users $8000 to get annual access to the publications they are giving readers for $9.99 per month suggests that they see News+ giving consumers the full value of of these publications’ subscriptions.

While you may have access to most of these publication’s editorial content, due to the curated nature of the platform, it still might be a challenge for you to actually see all of these stories as you scroll and click through the app. News+ is still a great bargain for consumers, but the company has done little to transparently communicate what the service is not.

Apple and individual publications (such as ours) struck their own deals. Terms were dictated in ways that probably made publishers believe that their wouldn’t be much attrition from core subscription products, but little of that matters when consumer perceptions aren’t managed.

So what does my $35/month @WSJ subscription give me that I can't get on Apple News Plus for $9.99/month.

I might have to cancel on WSJ if I can't get a good answer.

— Christopher N Esq. (@FarGreaterAsset) March 25, 2019

Apple doing little to convey what users won’t see when they open the News+ tab is unfortunate, but it’s far more detrimental to publications earnestly looking to expand their user bases, not cannibalize subscriptions. Complicated deal terms don’t make for the prettiest Keynote slides but if consumers are left to make their own assumptions, they’ll likely just assume what Apple has told them is the truth, that they are getting “full access.”

As a subscriber how are you supposed to know if your pricier Wall Street Journal digital subscription is any different from what is available on News+? Don’t look for fine print on the Apple News+ landing page, don’t look in the app itself, in fact, this information doesn’t seem to be available anywhere in Apple’s communications. The best rundown I’ve seen so far is this newsletter from CNN’s Brian Stelter, which suggests the paper is “trying to have it both ways,” letting News+ users access the full scope of content through search though much of it won’t organically surface from Apple’s curation. Most users signing up for News+ likely won’t realize this.

Apple unveils its $9.99 per month news subscription service, Apple News+

Though the minutiae of “full access” is somewhat unclear, Apple is better than most at distilling complicated deal terms into something snappy and I think it’s fair to say that non-print subscribers signing up for News+ will cancel existing subscriptions unless the reasons not to are thrown directly in their face by the publications.

Some are trying to do just that, but it’s not easy to surface caveats in the wake of a major Apple announcement.

The New Yorker’s Editor Michael Luo laid out some of the differences between what access full subscribers would be getting to the magazine’s content compared to News+ subscribers, and it seems to boil down to the fact that “most” web content isn’t included in the deal alongside some digital services like crossword puzzles.

1/ On this question of whether Apple News+ means you shouldn't subscribe directly to your favorite magazines any longer, here are a few things to think about: still the best way to read ALL that we do @newyorker every day and every week is to subscribe. https://t.co/c3uJ7pha5Q

— Michael Luo (@michaelluo) March 26, 2019

A journalist’s thread with a dozen or so retweets won’t achieve the reach that Apple can, and the underlying points embody the frustrations that Apple seemed to implicitly suggest News+ was a total replacement for these publications’ subscriptions when they juxtaposed the massive $8000 per year slide with the $9.99 monthly price of News+.

While plenty of these publications are seemingly stuck in News+ for the time being thanks to the initial terms of the Texture acquisition (which served as the basis for Apple’s new service), for the sake of securing newcomers with more flexible terms and poaching high-profile holdouts like the New York Times, it seems that Apple to be a bit more transparent to consumers about what all this new news service is and is not.

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Mozilla’s free password manager, Firefox Lockbox, launches on Android

Mozilla’s free password manager designed for users of the Firefox web browser is today officially arriving on Android. The standalone app, called Firefox Lockbox, offers a simple if a bit basic way for users to access their logins already stored in their Firefox browser from their mobile device.

The app is nowhere near as developed as password managers like 1Password, Dashlane, LastPass and others as it lacks common features like the ability to add, edit or delete passwords; suggest complex passwords; or alert you to potentially compromised passwords resulting from data breaches, among other things.

However, the app is free – and if you’re already using Firefox’s browser, it’s at the very least a more secure alternative to writing down your passwords into an unprotected notepad app, for example. And you can opt to enable Lockbox as an Autofill service on Android.

But the app is really just a companion to Firefox. The passwords in Lockbox securely sync to the app from the Firefox browser – they aren’t entered by hand. For security, the app can be locked with facial recognition or a fingerprint (depending on device support). The passwords are also encrypted in a way that doesn’t allow Mozilla to read your data, it explains in a FAQ.

Firefox Lockbox is now one of several projects Mozilla developed through its now-shuttered Test Flight program. Over a few years’ time, the program had allowed the organization to trial more experimental features – some of which made their way to official products, like the recently launched file sharing app, Firefox Send.

Others in the program – including Firefox Color⁩, ⁨Side View⁩, ⁨Firefox Notes⁩, ⁨Price Tracker⁩, and ⁨Email Tabs⁩ remain available, but are no longer actively developed beyond occasional maintenance releases. Mozilla’s current focus is on its suite of “privacy-first” solutions, not its other handy utilities.

According to Mozilla, Lockbox was downloaded over 50,000 times on iOS ahead of today’s Android launch.

The Android version is a free download on Google Play.

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Daily Crunch: Apple doubles down on subscriptions

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Here’s everything Apple announced at its ‘Show Time’ event

Let’s see if I can get this all into one blurb: There’s the streaming service AppleTV+, the updated TV app with Channels (basically, subscriptions for other services), a $9.99 subscription for Apple News+ (including Extra Crunch) and a gaming subscription service called Apple Arcade.

Oh, and beyond the subscriptions, Apple is working with Goldman Sachs and Mastercard to launch an Apple Card.

2. Uber is paying $3.1BN to pick up Middle East rival Careem

After months and months of rumors it has finally been confirmed that ride-hailing giant Uber is picking up its Middle East rival Careem in an acquisition deal worth $3.1 billion — with $1.7 billion to be paid in convertible notes and $1.4 billion in cash.

3. McDonald’s is acquiring Dynamic Yield to create a more customized drive-thru

McDonald’s said it will use this technology to create a drive-thru menu that can be tailored to things like the weather, current restaurant traffic and trending menu items. Once you’ve started ordering, the display can also recommend additional items based on what you’ve already chosen.

4. European parliament votes for controversial copyright reform (yes, again)

An amendment that would have thrown out the most controversial component of the copyright reform — a.k.a. Article 13, which makes platforms liable for copyright infringements committed by their users — was rejected by just five votes.

5. Spotify acquires true crime studio Parcast to expand its original podcast content

Parcast is known best for true-crime and other factual serials in genres like mystery, science fiction and history.

6. NASA cancels all-female spacewalk because it didn’t have enough spacesuits ready in the right size

On Friday, NASA was planning to conduct its first all-female spacewalk, but realized it doesn’t have enough spacesuits that are the right size for its female astronauts.

7. Huawei announces smart glasses in partnership with Gentle Monster

Huawei is positioning the glasses as a sort of earbuds replacement, a device that lets you talk on the phone without putting anything in your ears. There won’t be a single model, but a collection of glasses with integrated electronics.

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