The global video streaming industry now has a new player that is looking to gate crash this fast growing business segment – Apple launched its streaming services Apple TV+ on Friday with an offer of free services for all new Apple devices that would be purchased for the first year.
The service was launched in 100 countries all across the world and the Silicon Valley giant used all of its resources for promotion of the service and the publicity push on both sides of the Atlantic being undertaken by the stars of its flagship new series ‘The Morning Show’ – Jennifer Aniston and Reece Witherspoon.
Within the next few years, Apple has planned to spend about $6bn (£4.6bn) for production of new original programming. In comparison, the annual TV budget for the BBC is £1.7bn. Despite this however, the library for the company will only be small compared to the original programming available with Netflix and Amazon – with both the companies spending a combined annual amount of $20bn.
However the iPhone maker is planning to establish itself as a prestige brand, similar to the strategy that had been successfully adopted for decades by HBO – the maker of Game of Thrones to Chernobyl.
For two series of the Morning Show comedy drama – Aniston’s first TV series since leaving Friends, Apple has paid $240m and the company is hopeful that it would be able to gain popularity by releasing fewer, high quality original shows compared to the huge cache of programs released regularly by Netflix.
The first shows that were released for critics only did not receive the response that Apple would have hoped for – which included the $15m-per-episode sci-fi See with Jason Momoa and Dickinson, a comedy drama about a young Emily Dickinson. The reviews for both the programs were average at best.
Apple has adopted a two pronged strategy to offset the lack of content firepower available with it. At £4.99, Apple is offering the cheapest service which is significantly cheaper than Netflix’s most popular UK tariff of £8.99 as well as a year’s free subscription to customers who buy a new Apple device which would include the sale of more than 100 million new iPhones every year in the US and Europe alone.
However the total overall potential market is huge as there is a total of about 900 million iPhones already in use around the world along with more than 500 million other devices of Apple.
“They have come to the video market very late and Netflix really has stolen a march,” says Neil Campling, head of global technology, media and telecoms at Mirabaud Securities. “They are pricing it very cutely as they are aware that their offering is probably substandard in a very crowded market. Giving it away for free will to a degree mask whether it is seen as a success or failure in the first couple of years.”
After having raised its prices for subscription in major markets including the US and UK, the market leader Netflix is definitely feeling the pinch. According to estimates of Campling, the current year could be the first year in the history of the company of 22 years that it would not be able to add as much new subscribers as it had did the year before.
(Adapted from TheGuardian.com)