'We love competition': Readly chief exec welcomes Apple's expected arrival into digital subscription market

The chief executive of digital magazine subscription service Readly has said he would “welcome� the entrance of Apple into the market, with the tech giant expected to announce a rival service on Monday.

Speaking to Press Gazette, Jorgen Gullbrandson recognised that Apple could bring a “big changeâ€� to the sector, but said his Swedish company “loved competition”.

It has been reported that Apple is set to launch a paid-for news and magazine service, which would split subscription fees 50/50 between the tech giant and publishers.

The expected announcement would come a year after Apple bought digital magazine subscription platform Texture, which has titles such as Esquire, Vanity Fair and The Atlantic on its service.

Asked how he felt about the possible arrival of Apple in the market Gullbrandson said: “It’s a big change in the market when such a global, massive player as Apple goes into your territory.

“The way we view it is we love competition. We really do think its good. We’ve been fairly lonely when we move into new markets, where we need to educate everyone as to what this is all about.”

He added Apple could help to educate people about the subscription pool product model offered by Readly and so be of benefit to it.

Readly enjoyed revenue growth of 723 per cent and a compound annual growth rate of 101.9 per cent between 2014 and 2017, according to the Financial Times list of Europe’s 1,000 fastest growing companies.

The subscription service, ranked 186th on the FT’s list of fastest-growing firms, also saw its number of employees grow by 27 in that period to 31 employees overall at the end of 2017.

Gullbrandson said most of the firm’s money comes from subscription fees, adding: “We have, at this time, no revenue from publishers coming to us.”

Asked if Readly was looking to diversify its sources of revenue, he said the company was exploring at how it could make money from “conceptualising� data it held and “turning it into useful information� for publishers.

Speaking about its existing model, he said that 70 per cent of subscription fees are paid out to publishers based on the time users spend on their publications, while Readly takes home the remaining 30 per cent of income.

Gullbrandson declined to share how many paying subscribers were signed up to Readly.

Readly has more than 3,000 magazine titles on its platform – including British GQ, football magazine Four Four Two and Marie Claire – with women’s magazine Cosmopolitan and gadget title T3 the three most-read titles on the service in 2018, according to the company.

The company lists APL Media (the publishers of National Geographic Traveller), Egmont UK, Paragraph Publishing and Stream Publishing among the latest magazine publishers to sign-up to the service.

Gullbrandson added that most of the newest publishers on service came from its recent entries into Switzerland and the Netherlands.

But a few UK magazines, including Empire, BBC Good Food and Lonely Planet, left the £7.99-a-month subscription service last year.

Is he worried about more publishers leaving for a new service offered by Apple? “You’ve seen [reports] that Apple offers publishers a 50/50 split while we do a 70/30 split [favouring publishers] at a similar pricing.

“I don’t really see why publishers will leave the 70/30 split to go to the 50/50 split,” he said.

Gullbrandson said Readly had no plans to lower prices to compete with Apple, pointing out that “undercutting anyone would simply be giving the publishers less money for quality journalism they’ve producedâ€�.

He added that he did not see undercutting as a “route to success�.

“I think we should pay as much as possible to make it possible for them to stay in business, employ more journalists, write more quality journalism that we could publish and bring to more people to read. That is our goal.â€�

Picture: Magnus Glans/Readly

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Source: Digital Journalism

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