Apple faces intense competition when it finally jumps into TV race

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Apple TV service facing competition
Apple TV streaming service will have to outcompete dozens of rivals.
Photo: Ed Hardy/Cult of Mac

Apple keeps ordering TV shows but hasn’t said yet what it will do with them. Whatever the company’s plans are, Cupertino will face heavy competition. All the big networks are expected to launch their own for-pay streaming video services soon.

Netflix may dominate this market right now, but Amazon is coming on strong. HBO and CBS already have direct-to-consumer services that stream just their content to millions of paying subscribers. Clearly Apple harbors plans for some kind of streaming service, and Disney is working on several options.

And that’s just the start, with “all major TV networks launching standalone direct-to-consumer (DTC) streaming services by 2022,” according to a new report from The Diffusion Group.

Streaming TV: Flexible but complicated

It might sound like a cord-cutter’s dream at first. But in reality, this is creating a market in which subscribing to multiple services is almost a requirement. The Marvel movies could be available only from one Disney service, for instance, while The Walking Dead would require a different subscription.

Ultimately, a la carte consumers could end up paying more to get all the streaming content they want in such a fragmented TV ecosystem.

“Major networks will increasingly reserve their best titles for their own direct-to-consumer services, which will help drive total network DTC subscriptions close to 50 million by 2022,” warned Mike Berkley, a senior adviser with the Diffusion Group.

It could make the “bad old days” of bundled cable packages look like a bargain.

Meanwhile, streaming video surged past a tipping point of sorts in 2017, with 55 percent of U.S. households subscribing to paid services, according to Deloitte’s 12th annual digital media trends survey. That’s a surge of 450 percent in less than a decade, up from 10 percent in 2009.

The reasons? Original content “they can’t find anywhere else,” according to the Los Angeles Times, along with “the ability to watch movies and shows at anytime, as well as commercial-free content.”

Apple getting in somehow

For its part, Apple is developing quite a lineup of original TV programs. So far, Cupertino has committed to a series about Kevin Durant of the Golden State Warriors, a comedy starring Kristen Wiig, a sci-fi drama from the producer of Battlestar Galactica and several more. Steven Spielberg is even bringing an Amazing Stories reboot.

Despite announcing all these, Apple has yet to spell out exactly what it will do with them. The most obvious strategy is launching a paid Apple TV service similar to Apple Music. (So far, Apple shows like the Carpool Karaoke: The Series and the dreadful Planet of the Apps exist as a “value add” for Apple Music.)

Even with the heavy competition it would face, an Apple TV streaming service benefits from some clear advantages. Only Apple enjoys a huge installed base of phones, tablets, laptops and set-top boxes that could come with its video streaming software preinstalled.

Or Apple could acquire Netflix, as has been rumored for months. Cupertino has almost $300 billion in cash and nearly $1 trillion in market capitalization. It could buy almost any company it wants.

As the smartphone market matures and Apple places increasing importance on revenue from services, Apple TV could make sense. We just can’t wait to see what an Apple streaming video service looks like.