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Apple Ready to Raise Curtain on Video, TV and News Subscription Service

The day has nearly arrived for Apple to show the world whether there’s any fire behind the smoke of its streaming service.

Apple has kept a tight lid on most of the details of its upcoming service, even keeping its creative partners in the dark about how exactly their work will be distributed. What is undisputed, however, is that the tech giant with a nearly $1 trillion market cap has lined up a who’s who of high-profile talent to vault it into the increasingly crowded original-content arena.

Apple is set to unveil its plans for a launching of a revved up Apple TV offering aggregating channels and apps, its plan for original content and a subscription news service on Monday at the Steve Jobs Theater in Cupertino, Calif.

The company’s active roster is focused on well-known IP and packages with big names in front of and behind the camera. The company has been widely reported to have budgeted $1 billion to launch its most ambitious TV effort to date.

Among the high-profile shows ordered to series at Apple are:

  • a Reese Witherspoon-Jennifer Aniston morning show drama;
  • an Emily Dickinson half-hour series starring Hailee Steinfeld;
  • dramas “Little Voices” and “My Glory Was I Had Such Friends” from executive producer J.J. Abrams, with the latter to star Jennifer Garner;
  • drama “Are You Sleeping” starring Octavia Spencer;
  • an adaptation of the book “Defending Jacob” starring and executive produced by Chris Evans; a based-on-a-true story CIA drama starring “Captain Marvel’s” Brie Larson;
  • and a video-game development studio comedy from “It’s Always Sunny in Philadelphia’s” Rob McElhenney and Charlie Day.

And that’s just for starters. Nearly two years after Apple recruited former Sony TV presidents Zack Van Amburg and Jamie Erlicht, not a single frame of footage from any of Apple’s shows has been publicly released. One aspect of Apple’s subscription television product that has been confirmed is that the company will not only distribute its own shows but also seeks to be a gateway to selling third-party video subscription services like Starz and Showtime, for a healthy fee. It remains to be seen if AT&T’s HBO will be an Apple partner. Netflix disclosed last week that it will not be on the platform.

This part of Apple’s video push is expected to closely mimic Amazon’s Channels business. The e-commerce giant has found success in subscription video with the help of established customer relationships: Amazon already has billing information for its customers on file, and is streaming HBO and Showtime through the same apps that consumers already use to access Amazon’s own content. Finally, Amazon has made it dead-simple to subscribe to new channels directly from its Fire TV devices, with nothing more than your TV remote.

All of that has helped the company to turn Channels into the biggest marketplace for standalone video subscription services since its launch in late 2015, with The Diffusion Group estimating a year ago that Amazon was singlehandedly responsible for 55% of all standalone video subscriptions.

However, executives of some video services have complained of a power imbalance in their dealings with Amazon, with the e-commerce giant handling all of their customer relations. Some services may be wary that Apple will become another powerful middle-man. But with the exception of Netflix CEO Reed Hastings, few have said outright that they won’t be part of Apple’s service.

Overall, analysts are widely optimistic ahead of Monday’s announcement. Needham & Company’s Laura Martin upgraded Apple from a “buy” to a “strong buy” recommendation this week, arguing that the launch of the video service could help the company to both extract more value from each customer, and also dramatically reduce churn. “Our calculations imply that services double the lifetime value per user,” Martin wrote in a note to investors.

Wedbush Securities analyst Daniel Ives was equally optimistic, writing in a note to investors: “We believe Monday’s announcement is just the tip of the iceberg for Cook’s broader streaming content strategy to take hold and in our opinion adds a significant potential catalyst to the Apple services growth story for years to come.”

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