Apple's video service will treat original content as loss-leader for subscriptions

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in iPod + iTunes + AppleTV
Apple's anticipated video streaming service will focus on trying to sell subscriptions to other video services, a report claims, as the original shows the company has spent heavily in producing will effectively be freebies to draw users to pay for third-party content.




The "It's show time" event on March 25 is widely expected to feature the Apple News subscription service, possibly a co-branded credit card, and video streaming. While the general ways the first two of those three will operate are pretty obvious, there are still questions about what Apple's plans for its subscription service will actually look like.

Despite investing over a billion dollars in video programming, the report by Recode advises Apple's plans won't be to follow the same route as Netflix or others by creating a subscription-based streaming service. While it may do so in the future, it will initially offer its original content to consumers at no charge.

Instead, Apple is expected to earn a slice of revenue from subscriptions to third-party video services, sold via its platform. Report sources claim Apple will be offering a new storefront just for these services, separate from the main App Store that already houses apps for the channels and services.

The storefront will also offer recommendations based on the user's viewing habits, to tempt them into paying for access to that content. Apple may also offer its own bundles, combining together popular channels into a package that could be cheaper to buy than bought separately.

The store will also make some changes in the way streaming media is offered to Apple's customers, like the change from the video services hosting streams to the feeds being provided by Apple. This would mean Apple would have access to viewing data generated by its users, a valuable item that broadcasters and services may not wish to share so directly.

The potential for Apple selling subscriptions could be worth it for the company, as it is posited that if it reaches 100 million subscribers between 2022 and 2024, Apple could be earning $10 billion in revenue from the service alone.

Not everything is in place, however, as Apple is reportedly still working to get some holdout companies to agree to join the service. One major exception is Netflix, which has confirmed it won't be selling subscriptions or offer existing content through an Apple-branded video streaming service.

Apple's relationship with the services will also change, as it will be in a position where it will be able to dictate the terms rather than accepting pricing by the services. Though Apple is not expected to sell channels at a lower cost than the content provider is able to themselves, any discounts in bundles will be similar in level to those provided by traditional cable and satellite TV operators.
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Comments

  • Reply 1 of 35
    lkrupplkrupp Posts: 6,810member
    If true will this generate claims of anti-competitive behavior. Remember, this is Apple we’re talking about.
    tmay
  • Reply 2 of 35
    tmaytmay Posts: 3,567member
    lkrupp said:
    If true will this generate claims of anti-competitive behavior. Remember, this is Apple we’re talking about.
    Spotify has "Ellen" Clips...

    Just saying.
    watto_cobra
  • Reply 3 of 35
    racerhomie3racerhomie3 Posts: 1,020member
    lkrupp said:
    If true will this generate claims of anti-competitive behavior. Remember, this is Apple we’re talking about.
    Apple is not a monopoly in any markets. So ,they have nothing to worry about. 
    Cesar Battistini MazieroStrangeDaysbshankurahara
  • Reply 4 of 35
    anomeanome Posts: 1,258member
    lkrupp said:
    If true will this generate claims of anti-competitive behavior. Remember, this is Apple we’re talking about.
    Apple is not a monopoly in any markets. So ,they have nothing to worry about. 

    From what I can tell, most of the anti-competitive complaints are based around Apple having a monopoly on the "cool" phones/computers/OS. Or maybe it's because Apple doesn't just shovel money onto their front lawn every day.

    There may be some legit anti-competitive complaints to be levied against Apple, but they keep getting lost in the noise about imaginary monopolies.

    [EDIT] To clarify - by the "cool" phones etc, I mean Apple phones/computers/OS. Some people don't consider them cool, but the complaint seems to be that while they have free reign on other platforms, they don't on Apple.

    edited March 21 watto_cobra
  • Reply 5 of 35
    If Fox News wanted to sell its news through the Apple News service, would Apple forbid it based on its differing political leanings?
  • Reply 6 of 35
    mac_dogmac_dog Posts: 669member
    If Fox News wanted to sell its news through the Apple News service, would Apple forbid it based on its differing political leanings?
    Yes. Bcoz it’s not news. 
    Cesar Battistini MazieroAppleishdjames4242tenthousandthingswatto_cobra
  • Reply 7 of 35
    Cesar Battistini MazieroCesar Battistini Maziero Posts: 160unconfirmed, member
    My two cents on this is: 

    They need to go global. Actually they need to go global with everything, Here in Brazil we are missing a LOT of things.

    They need to make it SO convenient, that any services holding out will hear about it everyday from their costumers. 

    They need to make their relationship with Disney count for something. 

    robbyxwatto_cobra
  • Reply 8 of 35
    mac_dogmac_dog Posts: 669member
    Netflix needs to do something soon with their streaming service. The content they claim is ‘recently added’ is old and only a handful of their produced content is actually worth watching. 
    StrangeDayswatto_cobra
  • Reply 9 of 35
    ivanhivanh Posts: 296member
    Apple will be selling garbage as gold?
  • Reply 10 of 35
    StrangeDaysStrangeDays Posts: 7,115member
    If Fox News wanted to sell its news through the Apple News service, would Apple forbid it based on its differing political leanings?
    That’s absurd, Fox News already has apps in Apple app stores now.

    Alex Jones was banned from all platforms because he spews literally false information, resulting in at least one shooting by his dim viewers. 
    edited March 21 AppleishfastasleepLordeHawkwatto_cobra
  • Reply 11 of 35
    With Bob Iger on both the Apple and Disney board of directors, it would be quite an embarrassment if Apple can't get access to Disney+ streaming. I read that Disney+ will be announced on April 11, 2019 (but not released until later in 2019). Disney's portoflio is very impressive: Twentieth Century Fox, LucasFilm, Marvel, ABC TV, National Geographic, ESPN, A&E, and scores of other companies that you may have heard about. https://en.wikipedia.org/wiki/List_of_assets_owned_by_The_Walt_Disney_Company Apple's media assets are negligible by comparison. 
  • Reply 12 of 35
    So, Apple is giving away TV shows....in an effort sell other people’s TV shows....in an effort to sell more hardware?  

    I guess I’m genuinely confused why Apple would produce media content at a loss.  The only profits they stand to gain are in shaving off a percentage of other services’ subscriptions, or in selling more iPhones, iPads, AppleTVs, etc.  

    They’re supposedly not making money on selling user behavior information.
    cornchip
  • Reply 13 of 35
    Considering that the population USA is only 4.2% of the world's population (which also means the world has 24 times the population of the USA) I hope, for Apple's sake, that none of the new Apple services are US-only. P.S. I'm sorry for getting StrangeDays upset: my question was sincere.
  • Reply 14 of 35
    fastasleepfastasleep Posts: 2,558member
    mac_dog said:
    Netflix needs to do something soon with their streaming service. The content they claim is ‘recently added’ is old and only a handful of their produced content is actually worth watching. 
    What do you suggest, armchair analyst, they do? They have 44 original properties airing in April alone. You might not like all of them, because guess what — their viewership is really diverse. “Recently Added” May be older content but it was previously not streaming on Netflix. You may be surprised to learn not everyone sees all content when it’s brand new, many people wait for it to hit Netflix.
    robbyxwatto_cobra
  • Reply 15 of 35
    Looks like I might finally have some motivation to use my Apple TV. Rather than the built in apps on the TV. I prefer the Apple TV in many ways, but when I look at the 2 remotes, I always choose the easier option.
  • Reply 16 of 35
    DAalsethDAalseth Posts: 515member
    If true I suspect this would only be temporary. Get the sales and subscriptions going and THEN start charging for Apple Content. 
  • Reply 17 of 35
    gatorguygatorguy Posts: 20,291member
    "The (Apple) storefront will also offer recommendations based on the user's viewing habits, to tempt them into paying for access to that content...
    Apple would have access to viewing data generated by its users, a valuable item that broadcasters and services may not wish to share so directly".

    FWIW data-mining customers in order to sell them something is a big complaint here, even if the one holding the data isn't selling it. Simply possessing it is enough to send some of our members into a tizzy. AFAICT what the above describes is considered by a great many AI members to be an intrusion on user privacy, stealing your data and monetizing it. 
  • Reply 18 of 35
    StrangeDaysStrangeDays Posts: 7,115member
    gatorguy said:
    "The (Apple) storefront will also offer recommendations based on the user's viewing habits, to tempt them into paying for access to that content...
    Apple would have access to viewing data generated by its users, a valuable item that broadcasters and services may not wish to share so directly".

    FWIW data-mining customers in order to sell them something is a big complaint here, even if the one holding the data isn't selling it. Simply possessing it is enough to send some of our members into a tizzy. AFAICT what the above describes is considered by a great many AI members to be an intrusion on user privacy, stealing your data and monetizing it. 
    Yeah no. This is akin to Netflix or Apple Music “for you” recommendations, and isn’t the same issue as Google mining as much data as possible to build a profile that includes tracking me across the web via ad trackers, in the interest of selling my shadow profile to random advertisers, some of which figure out ways to link another signal to me personally. 

    I trust Apple with my “for you” history and recommendation data. I do not trust your reason for being, Google.
    tmayfastasleepcornchipLordeHawkwatto_cobra
  • Reply 19 of 35
    lkrupplkrupp Posts: 6,810member
    lkrupp said:
    If true will this generate claims of anti-competitive behavior. Remember, this is Apple we’re talking about.
    Apple is not a monopoly in any markets. So ,they have nothing to worry about. 
    Then why is every Tom, Dick, and Harry screaming MONOPOLY! at the top of their nicotine stained lungs. Are they stupid? Wait, don’t answer that. I always laugh when some asshole claims Apple has a monopoly over Macs and iPhones.  
    anomemjtomlinwatto_cobra
  • Reply 20 of 35
    gatorguygatorguy Posts: 20,291member
    gatorguy said:
    "The (Apple) storefront will also offer recommendations based on the user's viewing habits, to tempt them into paying for access to that content...
    Apple would have access to viewing data generated by its users, a valuable item that broadcasters and services may not wish to share so directly".

    FWIW data-mining customers in order to sell them something is a big complaint here, even if the one holding the data isn't selling it. Simply possessing it is enough to send some of our members into a tizzy. AFAICT what the above describes is considered by a great many AI members to be an intrusion on user privacy, stealing your data and monetizing it. 
    Yeah no. This is akin to Netflix or Apple Music “for you” recommendations, and isn’t the same issue as Google mining as much data as possible to build a profile that includes tracking me across the web via ad trackers, in the interest of selling my shadow profile to random advertisers, some of which figure out ways to link another signal to me personally. 

    I trust Apple with my “for you” history and recommendation data. I do not trust your reason for being, Google.
    I didn't mention Google.

    There are thousands of companies on the web who use your data/profile/history to serve up ads or send you emails in order to sell you what they believe to be related stuff, things you've previously shown an interest in, or otherwise monetize "you" by sharing or selling or using that data. As I recall you aren't a fan of those companies either, even the ones "not Google".

    If Apple wants to track and profile your viewing habits, your likes and dislikes, times and places, then serve up targeted ads suggesting you purchase/subscribe to such n'such and thus profiting from your data (is that what you call selling you?) it's now OK because it's a company you like? Sounds more as tho you don't necessarily object to the practice as much as who is doing it. 
    edited March 21 muthuk_vanalingamsingularity
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