Good morning. Last night in Houston: Howard Schultz indicted Democrats and President Trump while calling for common sense and cooperation. But he offered little in the way of policy specifics.

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Why Tim Cook wants news

Moving the Market: Apple chief Tim Cook is preparing to launch a news subscription service late next month that could change the economics of the digital news business by weaning publishers off of ad-supported platforms like Facebook and Google.

• The service would also provide Apple with a new revenue stream to offset lagging iPhone sales.

How It (Might) Work, via WSJ's Ben Mullin, Lukas Alpert and Tripp Mickle:

• "The service, described by industry executives as a 'Netflix for news,' would allow users to read an unlimited amount of content from participating publishers for a monthly fee."

• Apple plans to keep "about half of the subscription revenue from the service. ... The rest ... would go into a pool that would be divided among publishers according to" user engagement.

• Publishers "likely wouldn’t get access to subscriber data, including credit-card information and email addresses," hurting their ability to "build their own customer databases and market their products."

The Publishers' Dilemma: Some publishers "are skeptical about giving up too much control to Apple or cannibalizing their existing subscriptions ... But tech platforms also present a huge opportunity ... [giving] news organizations an entree to millions of upscale, sophisticated news consumers."

• Not Sold: The Verge's Casey Newton says its a raw deal.

The Bigger Picture: Apple News is just one of several media subscription services soon to be available on your iPhone, along with Apple's forthcoming film-and-television streaming service, Apple Music and Apple Games — all of which could be bundled together and offered to iPhone users for a single price.

• If that's the play, the potential audience for publishers becomes way too big to turn down.

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What's eating Apple

Josh Constine, the TechCrunch reporter who revealed that Facebook had been paying people to monitor their iPhone activity, now reports that Apple failed to block pornography and gambling apps due to a lack of proper oversight.

The Big Picture, via Constine:

• "For a company whose CEO Tim Cook frequently criticizes its competitors for data misuse and policy fiascos like Facebook’s Cambridge Analytica, Apple’s failure to catch and block these [sites] demonstrates it has work to do itself."

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Last night in New York:

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Bobby Kotick's Fortnite fight

What's Next: The meteoric rise of Epic Games' Fortnite — the free online shooter game that boasts more than 200 million registered accounts — is forcing the old guard of video game titans to restructure their businesses for a new era.

• The Latest: Bobby Kotick's Activision Blizzard has laid off roughly 8% of its staff, or about 750 employees, and is rebuilding the business around the company's most popular titles like "Call of Duty," "World of Warcraft" and "Candy Crush."

• The layoffs come one month after Kotick lost both of his chief financial officers (at least one of them in a breach of contract), as well as Bungie, one of Activision's most valuable game studios.

• Despite posting record sales yesterday, Kotick told analysts that the company "didn't execute as well as we hoped to in 2018, and our current outlook for 2019 falls below what is possible in an industry filled with growth opportunities..."

The Big Picture: The growth taking place in the video game industry today goes far beyond incremental product improvements or innovations in game play. As Matthew Ball noted last week, Fortnite is more than a game: It is "the largest persistent media event in human history," and maybe "the 'next version' of the Internet."

• The Question for Kotick: How do you compete with that?

Market Links

• Kevin Ulrich looks for a strategic partner to grow Epix (Information)

• Michael Lynton becomes chair of the Warner Music board (Billboard)

• Jonah Peretti is forced to recognize a BuzzFeed union (NYT)

• Jill Abramson continues to face pressure over plagiarism (Poynter)

• Lauren Sanchez is a suspect in the Bezos leak (Page Six)

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Moonves, Ianniello face suit

Talk of Tinseltown: A group of CBS shareholders say Les Moonves and current acting chief executive Joe Ianniello profited off of insider stock sales before The New Yorker published the exposé that led to Moonves' departure — a charge CBS denies.

The Charge, via THR's Eriq Gardner:

• Shareholders Gene Samit and John Lantz have filed a lawusit alleging that Moonves and Ianniello committed fraud by selling more than $200 million worth of stock "to the unsuspecting investing public."

• Samit and Lantz say that Moonves and Ianniello profited "from their failure to disclose the truth to the market," because they knew about the coming allegations in Farrow's New Yorker story.

The Latest: "The plaintiffs are [now] going a step further in an attempt to show CBS executives had knowledge of wrongness," based on the "unusual and suspicious" amount and timing of the sale.

• CBS statement, in part: "The vast majority of sales mentioned in this complaint were made as part of pre-planned selling arrangements ... The remaining sales were subject to CBS’ customary pre-clearance policies and procedures and were properly disclosed."

What's Next: The Oscars have decided to hand out some of the awards during commercial breaks.

• Over at The Ringer, Sean Fennessey and Amanda Dobbins wonder what might happen if the Oscars turns out to be "as much of a disaster as it’s shaping up to be."

See you tomorrow.