Apple’s News Service Business Chief Departs After Slow Start

(Bloomberg) -- The head of business for Apple Inc.’s news app stepped down less than a year after launching a high-profile subscription product that has struggled to attract paying readers.

Liz Schimel, the outgoing executive, joined in mid-2018 after serving as the president of international business at magazine publisher Conde Nast, said people familiar with the move who asked not to be identified discussing personnel matters. At Apple, Schimel oversaw relationships with advertisers and news publishers.

Apple is seeking to hire a notable name from the publishing world to replace Schimel, one of the people said. An Apple spokesman declined to comment.

News is a key part of Apple’s shift to subscription services as it tries to squeeze more revenue from customers. The company introduced Apple News in 2015 as an app to aggregate stories from a variety of sources and added a $10 monthly subscription last March that includes digital magazines and access to newspapers such as the Wall Street Journal and Los Angeles Times.

However, Apple was unable to secure a deal with two of America’s largest newspapers, the New York Times and the Washington Post. The papers were wary of handing over their reporting for a bundle that, in some cases, undercuts the price of their own plans.

In addition to subscriptions, Apple News generates revenue from advertising inside the app, which runs on nearly all Apple devices. The company said in January that the Apple News app is used by 100 million people a month in Australia, Canada, the U.K. and U.S., but it didn’t disclose the number of paying customers, as it has done for Apple Music.

The company has been similarly vague about demand for other newer subscription offerings. On a recent call to discuss quarterly financial results, Chief Executive Officer Tim Cook said the new video streaming service, Apple TV+, is off to a “rousing start” and that it’s being judged internally based on subscriber numbers. He said it won’t have a “material financial impact” in the near term. Apple generated $12.7 billion in revenue from services in the holiday quarter, slightly below an average of analysts’ estimates compiled by Bloomberg.

Apple’s services, including books, iCloud, news and video, are overseen by Peter Stern, a top lieutenant of Eddy Cue. Schimel reported to Stern, and her counterpart in editorial is Lauren Kern, a former executive editor of New York magazine who’s now editor in chief of Apple News.

In a bid to increase subscribers, Apple is considering bundling News with Apple TV+ and Apple Music as soon as this year, Bloomberg reported in November. In the meantime, the company has advertised heavily for Apple News+ and offered promotions. At times, it has extended the free trial period to three months, from one, and courted customers of Uber Technologies Inc. with offers of free trials through the ride-hailing app.

To contact the reporters on this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.net;Gerry Smith in New York at gsmith233@bloomberg.net

To contact the editors responsible for this story: Alistair Barr at abarr18@bloomberg.net, Mark Milian, Andrew Pollack

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