On Monday, March 25, Apple is going to announce its newest effort: a streaming TV service with a variety of original content.
But it sounds like Apple’s gameplan here might be much different than, say, just simply taking on Netflix or Hulu (or Disney+, for that matter). According to a new report from Recode, Apple’s primary goal, at least to start, will be helping its partner companies sell their own streaming video subscriptions. Of course, in doing so Apple will also be taking a cut of that money earned, so the move certainly makes sense.
Interestingly, there’s this additional bit: “Apple may also sell its own shows, at least as part of a bundle of other services. But for now, Apple’s original shows and movies should be considered very expensive giveaways, not the core product.”
As noted in the report, this isn’t as “exciting” as an era where Apple takes on the likes of Netflix, but this appears to be more spot-on with Apple’s general workflow in general. Apple has been doing this sort of thing for years, but with the new streaming effort it can sweeten the deal with its own content. That includes movies from the likes of Sofia Copolla, for instance.
Apple wants to build a new storefront, wherein the focus will be what Apple is bundling and offering — rather than a variety of other apps like what’s already available. Apple wants to promote its own hardware out of the effort, and with its own bundles — which will probably include HBO, Showtime, and other premium services.
Plus, being able to have all of that content, not just some of it, available within the Apple TV app means it can leverage its own services and notifications. Amazon has something very similar to this, where you can pay for Amazon’s services, bundle packages together, and still get original content from Amazon as a bonus. That sounds like what we’re getting here from Apple.
The publication’s report also adds these bits about what we should expect to see at Monday’s event:
- Apple will unveil a “Netflix for news” service based on Texture, the magazine app it bought last year. In addition to stories from magazines publishers like Conde Nast and Hearst, which it already offered, it will offer news from the Wall Street Journal and other publishers — but not the New York Times and the Washington Post. Publishers believe Apple will price the plan as a standalone service at $10 a month.
- Apple is working with Goldman Sachs on a joint credit card, which will reportedly have special features when paired with iPhones. Goldman CEO David Solomon will be at Apple’s event at its Cupertino, California, HQ on Monday, so expect to hear more about that next week.
- Industry observers assume Apple will sell access to multiple services, perhaps including Apple Music and/or some of its cloud storage offers, as part of a bundle.
Apple appears to have found a nice groove in offering access to services and collecting money from that in some way or another. And it appears, if this report is accurate, that Apple will expand that idea by allowing the streaming giants already out there to continue to duke it out. It will simply sit back and offer a more streamlined way to access all of that content, and collect a check at the same time.
Interestingly, we may see some shifts in pricing, as Apple will reportedly have control of that sort of thing with this specific deal:
“That wholesale/retail relationship also means Apple, not the streamers, can set the price for the stuff it sells. Apple isn’t likely to sell, say, HBO for less than HBO sells itself on rival platforms like Roku. But it definitely plans to sell bundles of pay TV channels at a discount, just like pay TV operators have always done.”
We already know that Netflix is not going to be part of the mix, but it may be an interesting story to see which companies are not going to be included in this new effort just as much as who is.
Well, this all makes sense. And it’s not at all surprising. Would it be more exciting if Apple was going to take on Netflix and Hulu and Disney+ (which launches later this year)? Sure! But then again, Apple probably knows that would take even more of an investment than the $2 billion a year it’s already spending. (Netflix is spending $10 billion this year.) So sitting back and simply offering up a collection of content it can then take a cut from fits more in line with the company we see these days. The original content it’s planning on launching should certainly sweeten the deal.
We Want to Hear From You
Where do you stand with this? Would you have preferred to see Apple just go all-in with this sort of streaming effort and take on the big names? Or do you think this method, something similar to Amazon’s own idea, will fit the bill for you and most customers?[via Recode]