Apple's video service will treat original content as loss-leader for subscriptions
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.
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.
Comments
Just saying.
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.
They need to make their relationship with Disney count for something.
Alex Jones was banned from all platforms because he spews literally false information, resulting in at least one shooting by his dim viewers.
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.
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.
I trust Apple with my “for you” history and recommendation data. I do not trust your reason for being, 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.