How Apple’s TV service can stand out in a crowded market

By

The Apple TV app is expected to be the hub of this company’s streaming video service.
The Apple TV app is expected to be the hub of this company’s streaming video service.
Photo: Apple

Apple is undoubtedly going to throw its hat into the streaming TV markets during a big press event on Monday, where its service will have to compete against dozens of rivals, some household names.

Although the announcement is still a few days away, we already know quite a bit about how Apple will try to make its offering stand out.

Lots of original content

Apple began commissioning original TV shows more than a year ago.  The company has about 30 in development. That’s roughly the same number as Netflix, expected to be one of Apple’s toughest rivals in the space. But another top competitor,  Amazon Prime, has a lot more original shows.

Of course, quality matters at least as much as quantity. People have to want to watch Apple’s offerings for its streaming service to pull in subscription fees.

There was no way the company could keep its TV shows under wraps so basic details about all of them are publicly available. In drama, there’s a reboot of Amazing  Stories and a version of Isaac Asimov’s Foundation series. Animation fans can look forward to a series based on the Peanuts comic strip and a musical comedy from the guy who brought us Bob’s Burgers. Speaking of comedies, expect one about about the life of poet Emily Dickinson, and another one starring Reese Witherspoon. And these are just a small sampling of what’s coming.

Don’t expect Apple to make shows loaded with sex and extreme violence. It’s reportedly prepping more family-friendly fare. That will set it apart from Netflix, who draws criticism for focusing on violence against woman. Disney’s upcoming streaming video service will also be squeaky clean, of course.

Previews of Apple’s original shows and all the others are likely to take up much of the time during the compasny’s press event on March 25.  How many will be available when the Apple TV streaming service launches is unknown.

We also don’t yet know when any of them will be available. Apple could just announce its  service next week but not yet launch it.

More content from partners

Original content won’t be the only option. Shows from HBO, Showtime, Starz and others will reportedly appear in the Apple TV service as well. But not Netflix.

Individual programs created by outside content producers will supposedly appear side-by-side with Apple’s own shows.

Access to programming from HBO, Showtime, etc. won’t help Apple’s service stand out from its rivals. Rather, it’s a basic feature it needs to offer just to compete at all.

Subscribing to and watching Apple TV

Almost no one thinks accessing this service is going to require an Apple TV set top box. These will surely be able to use the new offering, but there will almost certainly be many other options. 

It’s widely suspected that the Apple TV App already on iPhone, iPad and Mac will be the hub for all this new content. This collects movies and shows from a variety of sources and lists them in one central place.  Currently, getting video from iTunes enjoys most of the attention, but this is expected to change after the launch of the Apple TV service.

Whether there will be a version of this company’s TV app for Windows, Android, Chrome OS, etc. is an open question. Netflix, Hulu, etc. certainly don’t restrict their subscriber base to those who run one brand of computer.

The service won’t force users to watch video on small phone, tablet and laptop screens; there will be quite a few options for big-screen viewing. Several well-known TV makers announced recently that they have been allowed to build Apple’s AirPlay tech into their products, so someone could stream a show from their iPhone to a 60-inch flat-panel.

Paying for Apple TV

The $50 billion question about this upcoming service is, what will it cost? There are a lot of guesses but no one outside of Apple knows.

One report indicated that this company’s original content would be free to everyone who uses an iOS or macOS device.  That said, Apple is reportedly spending $4.2 billion over three years creating its TV shows and movies, so making them free as a way to encourage buying its hardware would be a hefty cost for what’s essentially advertising.

Especially as a recent report indicated that there’ll be no advertising on the Apple TV service.

If there’ll be subscription fees involved, the exact amount will have a tremendous effect on Apple’s success in this market.  Morgan Stanley analysts predicted last year that the service would be $7.99/month, which would make it lower than even Netflix’s basic plan, and well below Hulu’s commercial-free plan. On the other end of the scale, Goldman Sachs thinks Apple will ask almost double that, about the same as Netflix’s top-tier offering.

There’s also the possibility that there won’t be a single “one size fits all” bundle. Instead, customers will have the option to get just Apple’s original content for one price, or add another service like HBO for a bit more. And the fees for adding HBO, Showtime, etc. might be less than subscribing to these service by themselves, according to a new report.

It’s possible Apple’s share of subscription fees paid for other services through its app will contribute considerably to the iPhone maker’s bottom line. It collects 30 percent of such fees during the first year of a subscription and 15 percent each year thereafter.

It’s been speculated that Apple will bundle its streaming video service together with Apple Music plus the magazine subscription service the company is also expected to introduce at its press event on Monday. Additional iCloud storage could be in there too.

Apple TV: an uncertain future 

Apple has given itself a daunting task. It’s breaking into an already-established business: Netflix had 139 million subscribers at the end of last year, Amazon Prime had 100 million and Hulu has 25 million.

And Disney is also about to get into the streaming service game, adding to the 221 competitors that were available in the U.S. last year.

CEO Tim Cook and co. are really going to have to wow everyone during the big event coming next week. Apple TV will need compelling content, broad availability and an attractive price to stand out in a very crowded, competitive business.

But Apple has been in this position before and come out ahead. iTunes and the iPod revolutionized the entire music business, the iPhone put smartphones into everyone’s pockets, and half of Americans have a tablet thanks to the iPad. Apple TV could be its next big success.