Apple's Show Time Event: What We Know So Far
Apple will go live tomorrow to unveil two subscription services in what's the company's biggest pivot from hardware in a decade: a new video streaming service built into its TV app to allow users subscribe to different over-the-top (OTT) streaming options like Starz, Showtime, CBS All Access and more, similar to Amazon Channels, and an all-in-one news/magazine subscription service within Apple News that lets iOS/macOS users manage news from different sources from a single hub.
The company's ambitions for a video streaming service began taking shape six years ago when CEO Tim Cook, in an interview with Walt Mossberg and Kara Swisher, confirmed that it has a "a grand vision" and that television is an "area of great interest to us," before finally releasing a centralised TV app for Apple TV, a HDMI-compliant set-top box to stream media content to TVs and other video displays, in December 2016.
In its current form, the TV app is severely limited by what it can do, capable of only linking to TV shows and movies from other streaming apps. The upcoming service is expected to stream content natively from its partners directly inside the Apple TV app without having to flip between dozens of streaming apps. HBO, Starz, Showtime and CBS are reportedly in, but Hulu and Netflix are not. Apple is also anticipated to bundle a roster of its own original shows, pitting it directly against Netflix, but new reports indicate that it plans to charge users US$ 9.99 per month each for access to content from HBO, Showtime and Starz, in addition to charging a separate monthly fee for its original programming, contradicting previous rumours that it would be free for Apple device owners.
Finally, the elephant in the room: how much money is Apple expected to make? Currently, the company takes a 15 percent cut on every customer who signs up for streaming apps like HBO Now through the App Store, but CNBC is reporting that Apple is pushing for a 30 percent cut for every sign-up through the new TV app.
Apple is also rumoured to announce a revamped Apple News app with an added premium tier that provides access to content from participating newspapers and magazines for US$ 9.99 per month. The "Netflix for news", as it's been dubbed and based on Texture, the magazine subscription app that it acquired last year, has already courted trouble over the proposed revenue sharing terms, with some publishers balking at Apple's plans to collect 50 percent of the monthly subscription (far more than the 30 percent cut it gets from iTunes purchases) for themselves with the other half being split among publishers according to how many people read their stories. The Wall Street Journal is said to have signed on, but The New York Times and The Washington Post have opted out.
Apple may have persuaded publishers to come on board by highlighting the fact that Apple News comes pre-installed on every iPhone, iPad and MacBook sold to customers, but let's also not forget that the app, as of now, is only available in the U.S., U.K. and Australia, with Canada expansion planned with the release of iOS 12.2. The Apple TV app's availability is no different, limited only to certain markets like the U.S., Australia, Brazil, Canada, France, Germany, Mexico, Norway, Sweden and the U.K.
As sales of its marquee product, the iPhone, have begun to show signs of a slowdown, Apple has been increasingly looking at other avenues to offset declining profit margins and bring in a steady stream of subscription-based revenue from a suite of services: App Store, iCloud, Apple Pay, Apple Music, and now Apple TV and Apple News. But it remains to be seen how many partners will agree to relinquish control and bring their content to a different distribution platform.
When Facebook announced its pivot to video in 2017, publishers scrambled to adapt to the company's algorithm, only for the company to tweak its algorithm again to favour content from family and friends over brands and publishers. It therefore bears noting here that Apple, like Facebook, is not in the business to help the cause of journalism, but rather itself. It will be interesting to see if these grand experiments by tech companies at publishers' expense will bear fruition, and most importantly, if Apple can deliver a truly compelling service. Tune in tomorrow.
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| It's show time for Apple (Image: The Verge) |
The company's ambitions for a video streaming service began taking shape six years ago when CEO Tim Cook, in an interview with Walt Mossberg and Kara Swisher, confirmed that it has a "a grand vision" and that television is an "area of great interest to us," before finally releasing a centralised TV app for Apple TV, a HDMI-compliant set-top box to stream media content to TVs and other video displays, in December 2016.
In its current form, the TV app is severely limited by what it can do, capable of only linking to TV shows and movies from other streaming apps. The upcoming service is expected to stream content natively from its partners directly inside the Apple TV app without having to flip between dozens of streaming apps. HBO, Starz, Showtime and CBS are reportedly in, but Hulu and Netflix are not. Apple is also anticipated to bundle a roster of its own original shows, pitting it directly against Netflix, but new reports indicate that it plans to charge users US$ 9.99 per month each for access to content from HBO, Showtime and Starz, in addition to charging a separate monthly fee for its original programming, contradicting previous rumours that it would be free for Apple device owners.
Finally, the elephant in the room: how much money is Apple expected to make? Currently, the company takes a 15 percent cut on every customer who signs up for streaming apps like HBO Now through the App Store, but CNBC is reporting that Apple is pushing for a 30 percent cut for every sign-up through the new TV app.
Apple is also rumoured to announce a revamped Apple News app with an added premium tier that provides access to content from participating newspapers and magazines for US$ 9.99 per month. The "Netflix for news", as it's been dubbed and based on Texture, the magazine subscription app that it acquired last year, has already courted trouble over the proposed revenue sharing terms, with some publishers balking at Apple's plans to collect 50 percent of the monthly subscription (far more than the 30 percent cut it gets from iTunes purchases) for themselves with the other half being split among publishers according to how many people read their stories. The Wall Street Journal is said to have signed on, but The New York Times and The Washington Post have opted out.
Apple may have persuaded publishers to come on board by highlighting the fact that Apple News comes pre-installed on every iPhone, iPad and MacBook sold to customers, but let's also not forget that the app, as of now, is only available in the U.S., U.K. and Australia, with Canada expansion planned with the release of iOS 12.2. The Apple TV app's availability is no different, limited only to certain markets like the U.S., Australia, Brazil, Canada, France, Germany, Mexico, Norway, Sweden and the U.K.
As sales of its marquee product, the iPhone, have begun to show signs of a slowdown, Apple has been increasingly looking at other avenues to offset declining profit margins and bring in a steady stream of subscription-based revenue from a suite of services: App Store, iCloud, Apple Pay, Apple Music, and now Apple TV and Apple News. But it remains to be seen how many partners will agree to relinquish control and bring their content to a different distribution platform.
When Facebook announced its pivot to video in 2017, publishers scrambled to adapt to the company's algorithm, only for the company to tweak its algorithm again to favour content from family and friends over brands and publishers. It therefore bears noting here that Apple, like Facebook, is not in the business to help the cause of journalism, but rather itself. It will be interesting to see if these grand experiments by tech companies at publishers' expense will bear fruition, and most importantly, if Apple can deliver a truly compelling service. Tune in tomorrow.
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