Apple poised to take on Hulu, Netflix, Amazon in video services
Deal with Oprah, other stars part of rumored move beyond music
LOS ANGELES – We know Apple is bankrolling Hollywood stars such as Oprah to make TV shows. We don’t know when they will appear or in what form – could it be part of the existing Apple Music service or a new entertainment channel to take on Netflix and Amazon, perhaps?
Apple long has offered video-on-demand services, but it has never offered anything to rival Netflix or Hulu. Instead, it has directed viewers to its iTunes service, where they could buy and rent movies for viewing on computers and phones and via the AppleTV set-top box.
But so far, Apple doesn’t offer monthly video streaming, which soaked up nearly $15 billion in consumer dollars in 2018, according to eMarketer.
Instead, it’s mostly focused on Apple Music, which charges $9.99 monthly and boasts 50 million subscribers, second to No. 1 Spotify with 75 million.
Apple doesn’t break out how much iTunes and Apple Music contribute to its Services division, but that unit has become Apple’s second-largest revenue generator, after the iPhone and above the iPad and Mac computers. Services, which also includes iCloud backup storage subscriptions, brought in more than $9 billion in the most recent quarter.
Services will represent 14 percent of Apple revenues in 2018 and grow to 20 percent by 2023, predicted Gene Munster, an analyst and investor with Minneapolis-based Loup Ventures.
Now Apple looks like it’s building another service, for video, but hasn’t unveiled if that will be part of iTunes or something new. In the announcement about Winfrey joining the Apple fold, it said little about what the project would be, only: “Together, Winfrey and Apple will create original programs that embrace her incomparable ability to connect with audiences around the world.”
However, Apple clearly seems to be following a path laid by Netflix, Amazon Video and Hulu, which credit original content for subscriber growth.
Apple has reached out to some of the biggest names in entertainment, including producer/directors Steven Spielberg and Damien Chazelle and A-list actors Reese Witherspoon and Jennifer Aniston, to produce shows for the company.
“I think you can be sure Apple will come to the market with something that will be instantly impactful to the already crowded entertainment marketplace, something that’s going to concern competition whether it’s a streaming service like Netflix or a broadcast network like NBC,” said Andrew Wallenstein, co-editor of the showbiz bible Variety.