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Apple’s Video Streaming Plans: Key Open Questions

Apple is expected to give a glimpse of its upcoming video streaming service at an event on its Cupertino, California-based campus on March 25.

Reports over the past year have trickled out hinting at what an Apple streaming service could look like, but the company itself has been tight-lipped on divulging details. The streaming product that Apple ultimately unveils could be different from what’s being rumored.

Below are key questions about Apple’s video streaming plans that should get answered when Tim Cook takes the stage:

  • How much will access to Apple’s original content cost? Some reports have indicated Apple will make its original content for free on iOS devices like iPhones, while there’s also been rumblings that the company could charge a flat monthly fee for access to its shows (Morgan Stanley predicts a potential $8 monthly fee; Goldman Sachs projected a $15 monthly fee). It’s also possible that Apple creates and charges for an Amazon Prime-like bundle that offers access to its TV shows and a new library of digital magazines also to be announced on March 25th. Apple Music could also be part of a bundle.
  • How will Apple’s original content be distributed? It’s unclear exactly how Apple intends to make its shows and movies accessible to consumers. But the tech giant has several existing platforms to choose from, like the “TV” app, which comes pre-installed on devices like iPhones, iPads, and Apple TVs. In fact, Apple may elect to house its TV shows in the TV app, according to CNBC. On the other hand, the company could make its shows accessible via a new standalone Apple-branded video service, but this route seems less likely since it’s more costly and time-consuming than going with the formerly mentioned option.
  • Will Apple’s content be accessible on non-Apple devices? In addition to a potential platform that lets users stream all of Apple’s original content, the company could reach more viewers by making its original shows available on devices outside the Apple ecosystem. For example, iOS only ran on 13% of smartphone globally in Q3 2018, with Android powering the remaining 87%, according to IDC. Meanwhile, some consumers without Apple devices could gain access to the company’s original content if Apple does sell some of its new original movies and TV shows via iTunes, because iTunes will be available on 2019 Samsung Smart TV models this spring. It’s worth noting that, in addition to this Apple-Samsung partnership, Apple Music is accessible on Android devices. So Apple isn’t totally opposed to partnering with outside companies to extend the reach of its services.
  • How many originals will Apple offer at launch? Apple has been nabbing shows left and right since it poached Sony Pictures Television execs Jamie Erlicht and Zack Van Amburg to join its video programming team two years ago, but this doesn’t mean everything that it’s reportedly snagged since then will be on its service at launch. Apple had 30 series in development as of January 2019, according to Ampere Analysis. However, Apple will offer just a handful of these shows on its service when it launches, according to the New York Post. Currently, five Apple series have finished filming, while around a half dozen more are close to completing production, according to The New York Times. Apple may choose to disclose a targeted original series release output cadence, i.e. a new original series every month, to further entice consumers to its upcoming video service.
  • What type of original content will Apple offer at launch? Apple has so far seems to have leaned more heavily towards curating drama and comedy TV shows, like its untitled morning show featuring Jennifer Aniston and Emily Dickinson series featuring Hailee Steinfeld, rather than other genres. Meanwhile, Apple has also acquired handful of films, like “The Elephant Queen,” although it’s so far appeared to more heavily emphasize building up its TV show slate. This content strategy is in line with an October 2017 report from Bloomberg that stated Apple wanted comedies and emotional dramas with “broad appeal.” That same report indicated Apple is shying away from edgy and R-rated fare, which other reports since then have echoed as well, although a source close to Apple downplayed the strictness of the company’s content guidelines in a separate report from Variety.
  • Will its original shows be ad-supported? It’s unclear if Apple’s own original content will have pre- or mid-roll ads, but its shows are unlikely to be ad-supported, given Apple’s tendency to prioritize the user experience and the likelihood that Apple wants to convey its shows as premium assets. However, in the off chance that Apple does decide to run ads on its own shows, it won’t necessarily be shutting itself off from a large portion of viewers. Sixty-three percent of respondents indicated that they don’t mind seeing ads if they’re not paying anything, per an October 2018 survey by Maru/Matchbox and SpotX.
  • What third-party streaming services will be married with Apple content? Several reports have indicated that Apple’s streaming service will allow users to subscribe to and view third-party SVODs from companies like Starz. However, Netflix isn’t expected to be part of Apple’s streaming service, while HBO’s presence is in doubt. Apple is reportedly seeking to take a 30% cut on SVOD sign-ups that occur through its streaming service, which could be contributing to hesitance in participating in Apple’s streaming service. Currently, Apple’s “TV” app aggregates content from companies like HBO and ABC, but users are required to launch separate apps to purchase access to and view those companies’ shows. Not offering access to other prominent SVODs could spell trouble for Apple. This is because Apple might not be able to satisfy consumers with just its original content initially if it indeed does only offer just a handful of shows on its service when it launches.
  • When will the service itself launch? Although Apple is expected to unveil its video streaming service at its March 25 event, there are many conflicting reports on when such a service would become available to consumers. The Information reported in late January 2019 that Apple has been telling studios it’s partnered with for content to prepare for a mid-April launch. CNBC in February 2019 reported Apple is shooting for an April or early May launch of its video service. Meanwhile, Variety reported that Apple’s service will be targeted for a launch in the summer or fall. While it’s hard to tell when Apple will finally enter the streaming wars, it’s safe to say that the sooner, the better. There were 221 active over-the-top (OTT) services in the US in 2018, up from 199 in 2017, per Parks Associates. And this figure is slated to increase as Disney, WarnerMedia, NBCUniversal, launch their own services in 2019 and 2020. Getting in the streaming race earlier could help Apple more quickly cultivate a following among consumers that may otherwise become users of other streaming services that launch sooner. In a March 2019 research note, Goldman Sachs predicted that Apple’s streaming could in a bull case scenario lure 20 million subscribers in two years if it was priced at $15 monthly.

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