Is Apple’s Newest Streaming Service a Failure in Disguise?
Don’t let the high-profile names deceive you
Apple is unmistakably one of the leading tech companies in the world. It is considered one of the Big Tech companies alongside Facebook, Amazon, Netflix and Google (FAANG) alongside Microsoft and continues to dominate its competitors, with Apple recently overtaking Samsung as the biggest smartphone vendor in the world with Apple selling 72.9 million units, in comparison to Samsung who sold 70 million units in a recent report carried out by Counterpoint Research.
Most recently, the Cupertino based tech giant has been branching out of consumer electronics and has been developing software-based services to accompany their extensive catalogue of products. An exceptional example is Apple’s music streaming service, Apple Music, launched in 2015. In the five years since the streaming service was released, Apple Music has become one of the leading sources alongside Spotify, which sits at 130 million subscribers, for music and Spotify’s primary rival with the service garnering 68 million subscribers by the end of 2020, according to Statista.
Apple has seen the success of Apple Music as an indicator to expand its market into further online-based subscription services, resulting in the introduction of more entertainment-based subscription services such as Apple Arcade and Apple TV+.
Apple TV+ is a video streaming platform which currently offers only original film and TV content. Apple has managed to attract an audience to its streaming platform by collaborating with popular names within the industry including Oprah, Samuel L. Jackson and Reese Witherspoon.
So, surely with the help of original content libraries and famous names attached to these services (including their own), Apple should be dominating the online entertainment market…Right? The answer — not as well as you might think. This is due to three factors.
Established competitors
In terms of video streaming, Netflix and Amazon Prime Video have been at the top of video streaming for countless years now, attracting both domestic and international audiences globally. Both services could be considered the ‘mainstream’ or ‘flagship’ streaming services of the market with Netflix’s subscriber count coming in at 186 million global subscribers in the first quarter of 2020, placing it at the top of all currently available streaming platforms and Prime Video’s subscriber, a close second with 150 million global subscribers. Both platforms have had a large period to grow as companies due to being established in earlier years when streaming services were considered a ‘thing of the future’ — with Netflix being founded as early as 1997 and Prime Video (formerly known as Lovefilm) founded in 2002.
However, this is no excuse as other newcomers such as Disney’s new streaming platform, Disney+ have been rapidly climbing the subscriber ladder with Disney gaining 50 million subscribers within 5 months of operating (as of April 2020). In comparison, Apple’s subscriber count currently sits at around 33 million, despite launching globally around the same time as Disney+, which gained 10 million subscribers in its first 24 hours of launching in the US. According to Bloomberg, it has recently been revealed that Apple has been acquiring rights to older TV shows to build a back catalogue of content which could have the potential to compete with the likes of Netflix or Prime Video. Comparing a highly-regarded service such as Netflix to a newcomer like Apple TV+, could this be enough to bring the service up to par with a content library as extensive as Netflix’s?
Lack of content
Another issue for the streaming platform is the fact that, in comparison to its competitors, Apple TV+’s catalogue can be considered very ‘slim’ when looking at other streaming platforms such as Netflix and Prime Video, with both platforms hosting original content in addition to having a back catalogue with TV shows and movies originating from varying production studios. The variety in the selection these streaming services offer ensures that each subscriber can find something they enjoy. However, Apple’s problem is the limitations of its content library. Apple’s original plan was to offer only original content for its streaming platform, with reliance on collaborations with well-known actors, filmmakers, producers and directors. Also, regarding third-party content, the tech company currently relies on renting and buying movies and TV shows through their TV and iTunes applications instead of including these in the subscription like other competitors are doing. But, it seems that Apple s looking to change this as stated in my previous point, with starting to introduce a back catalogue. It seems that the firm’s original business model for the service initially failed, indicated by the alleged subscriber count due to Apple’s limited release on data for its services.
Little to no marketing
It seems that Apple is heavily leaning on its subscriber count to expand as a result of promotional offers or inexpensive pricing. In February, an analyst entry from Bernstein’s Toni Sacconaghi pointed out that no more than 10 per cent of Apple consumers willing to start a free 12-month subscription app trial have accepted the consumer tech company’s promotion since it was introduced in November. The offer is available if you purchase a new Apple device such as an iPhone, iPad, iPod, Macbook or Apple TV. Looking at the pricing of Apple devices, we can assume that the company gets compensated for the free year of Apple TV+ and aren’t risking significant losses in revenue. Despite this, it seems very unlikely that many are going to be sprinting to the nearest Apple Store to get a free trial. Additionally, Apple seems to focus on promoting its original shows such as The Morning Show (Steve Carell, Jennifer Anniston, Reese Witherspoon), See (Jason Momoa) and Dickenson (Hailee Steinfeld).
On a personal note, I have tried out Apple TV+ using the one-month free trial and paid £4.99 for a month after to watch the new addition to the platform, Defending Jacob (Chris Evans, Michelle Dockery, Jaden Martell). For the time I had the service, I only watched this show. For the two months I used Apple TV+, nothing else on the platform appealed to me however this is down to personal preference. Previously watching the murder mystery Knives Out released in 2019 also starring Evans and Martell is what attracted me to watch the series in the first place. So, I guess using famous names can be beneficial for an increase in subscribers, but just how long can you milk them until people ultimately get bored?
It would be a lie to say that Apple isn’t successful. This is evident by the cult following the tech giant has gained over the past decade due to their consumer electronics. However, when looking at recent ventures such as Apple TV+, the company hasn't shined through their competitors, whether that's due to being overshadowed by bigger competitors, lack of content or insignificant amounts of promotion. Nevertheless, Apple TV+ could be a huge success and be considered a smart business move if the company was more invested in its success and pinning down problem areas, rather than sidelining it to focus on other projects at the same time, possibly competing with the likes of other platforms such as Disney+ in the near future.
