Apple takes bigger bite of show business
Company announces long-rumored ad-free, on-demand streaming service
Tim Cook hopes there’s no business like show business.
And with the backing of Hollywood A-listers Oprah Winfrey, Steven Spielberg, Steve Carell, Reese Witherspoon, Jason Momoa, J.J. Abrams, Sarah Bareilles, Alfre Woodard, Kumail Nanjiani, Jennifer Aniston, even Big Bird – each appeared on the Steve Jobs Theater stage and will do their part to contribute original content – Apple’s CEO on Monday announced Apple TV+, a long-rumored ad-free, on-demand entertainment streaming service.
Apple TV+ will launch in the fall and be part of a revamped Apple TV app.
In broad strokes, the new service would appear to pit Apple against the likes of Netflix, Amazon Prime and Hulu. Apple didn’t spell out pricing for Apple TV+, but it doesn’t appear to be free. You’ll have the option, apparently, to pay for premium channels you don’t currently subscribe to (with Apple presumably getting an undisclosed cut).
Meantime, the revamped Apple TV app will turn up in May, via the Apple TV set-top box and on your iPhone and iPad. The app will come to Macs in the fall.
And Apple also announced that it will be made available on smart TVs from Samsung, LG, Sony and Vizio, and even on the boxes that compete with Apple TV hardware, notably Fire TV and Roku.
“We love TV,” Cook said on stage.
Going all in on news
Separately, the company announced a beefed-up newspaper and magazine service called Apple News+. It costs $9.99 a month and includes such newspapers as The Wall Street Journal, Toronto Star and Los Angeles Times, along with more than 300 magazines including People, National Geographic, Popular Science, Sports Illustrated, Billboard, Vogue, Fortune, New York and The New Yorker.
Content will be curated: It is unknown whether you’ll get all or just some of the content from your favorite digital publications under Apple’s single news subscription.
Apple says it is not charging extra to share the news subscription with members of your family. The first month is free.
And in a nod to privacy, Apple claims advertisers will not be able to track what you are reading.
“Apple will need to continue to increase investments in original content and licensing to differentiate itself from competitors.” Chris Bendtsen, eMarketer analyst
Will there be bundled pricing?
Cook has long signaled Apple’s increased reliance on the services sector. This, in addition to the brand-new
streaming services, includes iCloud, Apple Pay, and Apple Music, which has garnered about 50 million subscribers since its debut in June 2015.
Apple’s biggest advantage here would seem to be the Apple brand itself, built around an installed base of loyal customers, who collectively have about 1.4 billion Apple devices out in the wild, most notably, the iPhone.
Most of Apple’s services to date have been closely tied to those Apple products, and if anything, today’s announcements may further cement that symbiotic relationship.
Still unclear is whether Apple will bundle Apple TV+, Apple News+, Apple Music and perhaps some combination of premium TV channels into a single discounted offering.
Another question: Will Apple give any kind of price break to iPhone owners or people who have other iDevices?
Apple is still looking at services to keep consumers in its ecosystem.
“Apple will need to continue to increase investments in original content and licensing to differentiate itself from competitors. However, it could take advantage of its massive smartphone reach in the U.S. and abroad,” says eMarketer senior forecasting analyst Chris Bendtsen.
Indeed, whatever advantage Apple gains through hardware, the Apple TV set-top box, for now, is at the bottom of the U.S. connected TV market – behind Roku, Amazon Fire TV, and Google Chromecast. This year, 25.1 million Americans will use an Apple TV device, or 13.2 percent of connected TV users, eMarketer reports.
In an exclusive USA TODAY/SurveyMonkey Audience online poll of more than 1,030 people, conducted over two days last week, about a third of consumers indicated that they had seen or heard the news about a new (rumored) video streaming service from Apple. Nearly a quarter said they were either “likely” or “very likely” to subscribe to it if launched, with 31 percent undecided.
Then there’s the matter of subscription fatigue, given that U.S. viewers have more than 300 top video options.
According to a recent Deloitte survey, the average U.S. consumer now subscribes to three streaming video services. Will they go for a fourth? And if not, what will they cut?
Meanwhile, 43 percent of consumers in the Deloitte survey subscribe to both streaming and conventional pay TV services.
A credit card and games, too
Apple also unveiled a new subscription offering for gamers called Apple Arcade and will include more than 100 curated titles you can play on your phone, Apple TV, Mac and iPad. It works offline.
Apple separately announced a titanium Mastercard credit card called Apple Card, with a Daily Cash feature that adds a 2 percent rebate on purchases made through Apple Pay. The rebate climbs to 3 percent on purchases for Apple’s own products. There are no annual fees. No card number, security code, expiration date or signature is visible on the card.
The card will come to the Apple Wallet app in the U.S. this summer.
Corrections & Clarifications
A March 25 story about tax sheltered accounts misstated Shobin Uralil’s title and the description of his company. He is COO and co-founder of Lively, an HSA provider.
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