There is a tired narrative that exists about Apple. You likely know it well. Following the untimely death of Steve Jobs the company has struggled to be an innovator, behaving instead as an efficient operation providing incremental improvements that are just good enough to keep customers inside its ecosystem. The new iPhone might not be amazing, but your old iPhone is 3 years old and lacking. After all, what are you going to do, get an Android?
This narrative is tired but, as the Apple event this week showcased, it’s also true. In a continuation of the company’s pivot to services, Apple announced they’d be offering a streaming service, a news service, a gaming service and, oddly enough, a physical credit card to accompany its virtual payment service. The event was notable for its star power (Oprah!) and for its lack of original ideas.
And yet, because it’s Apple, this event did matter. The past few days have given us several prominent viewpoints about what the organization announced and what it means for the industry. I’d like to explore those and attempt to determine which is the most accurate.
Nothing to see here
Formerly popular only among Android users looking to snivel at the common folk and their obsession with a new iPhone that “has features the Pixel has had for years!!!”, the viewpoint that Apple isn’t actually announcing much of anything has been more widely embraced of late. It may have reached its peak with this event. Apple did not provide a release date or a price for Apple TV+, nor did they provide much detail about any of their original content.
As we mentioned up top, there were plenty of celebrities on hand. Oprah, Steven Spielberg, Reese Witherspoon, Jason Momoa, and more. Apple provided some information about the new projects they’d be featured in, but not much. They announced that you’d be able to view premium content from other providers through their TV app, but didn’t explain pricing or how bundling might work. The event was splashy and heavy on hype, but cripplingly light on substance and details.
The amalgamation of features
Apple is ubiquitous, and as a result has the opportunity to bring ideas popular among niche groups to the masses. Bluetooth headphones were around for years, but it wasn’t until Air Pods that they became the norm. After Monday’s event, many see Apple TV+ essentially serving as a gateway into streaming all your favorite content from one place. Perhaps boomers, who continue to be among the top consumers of video content, aren’t willing to learn how Roku works. But Apple? Apple products they understand. With the Apple TV app integrated into smart televisions, and Apple TV+ just a click away, a larger swath of the population will be given access to a brave new world.
The most notable indication of this possibility is Apple’s announcement of “channels”, the ability to subscribe to premium content like HBO through Apple TV. You may recognize this as being similar to/exactly like a feature on Amazon Prime Video’s service. That service is called…hmm…*checks notes*….ah yes, “channels”.
But it isn’t just channels. Apple will have original content. They’ll have voice commands through Siri. They’ll allow you to access your content across devices. They’ve taken much of what consumers love about other services and dropped their logo on it.
Since there were so few details, this ended up being the contrarian point of view. Still, there were plenty in the media and the industry who chose to see the event as the first step down a path where Apple becomes the dominant provider of media services. With some imagination, what seems a little bit absurd on its face becomes enticing.
You already have an iPhone, now imagine Apple News+ providing you premium content to read on that phone. News publishers start pushing exclusive video to News+, and Apple TV allows you to access that and other top of the line video on your television. Even if you’re traveling it’s available wherever you are, on any device, since it’s integrated with the OS and cloud that — again — you’re already using. Apple TV+ is worth the extra money, particularly when it’s bundled with the discount you receive from subscribing to Apple Music, News+, and iCloud. You’re using Apple Pay and Apple Card to pay for all of this, so you’re getting an instant 3% cash back. As eSports rises to prominence, a year of Apple Arcade is beginning to look like an attractive gift to the interested parties in your life. Plus, you can play all those Apple Arcade games on your TV, through the Apple TV app.
This scenario isn’t out of the realm of possibility. It also isn’t close to anything resembling certainty. Which brings us to the most accurate narrative.
We just don’t know
The disappointing truth is that it’s currently impossible to know whether or not this service will be any good, much less if it will shift the paradigm. Forget about integrations with other Apple services, we don’t even know how much Apple TV+ will cost on its own. The original content hasn’t been reviewed. There isn’t even a release date for the service. Without such details, how can we possibly say whether or not this service will be worthwhile, or how many consumers might be interested?
Why should you care?
Apple is attempting to future-proof itself by investing in emerging spaces. Beyond the broad strokes they’ve presented, we can’t really be certain what Apple means for this new line of products to become, or how they imagine them working in concert. It’s been hypothesized that this event was meant more for Wall Street than consumers or the media, a commitment to keep that sweet, sweet recurring revenue coming in the door in whatever way possible.
While it’s possible Apple is playing this evolution close to the chest, keen on revealing key details closer to launch, it’s more likely that they’re not sure what to do. They’re throwing it all out there with the hope that something sticks. It’s not a great business strategy, but for a company with a quarter of a trillion dollars in cash on hand, it isn’t the worst one either.
Recommended Reading: Apple Announcement Edition
I drew the above information from the works below. These are some of the best pieces on what’s happening and what it means, if you have time I’d encourage you give them a read.
How Apple Is Expanding Its Media Business
Not much here beyond a strong, simple breakdown with some interesting data worked in.
We still don’t know what’s in Apple’s streaming service, how much it will cost, or why we should pay for it
Peter Kafka wasn’t particularly happy that Apple brought him out to its headquarters and subsequently failed to answer most of the important questions about their new offerings. Still, he’s insightful and uses the information that was presented to imagine some potential ways forward.
Apple’s subscription news and video services cater to media’s middle class
While Apple’s cut of the revenue generated by News — and presumably by TV+ once it launches — can be quite high, that doesn’t mean that it’s inherently not worth it for publishers to participate. Some stand to gain enormous audiences, even if it means sacrificing direct relationships with customers and a large portion of their revenue. While the Times might not have much to gain from participating in Apple News+, other, less popular publishers almost certainly do.
Apple TV will die so TV+ can live
Since the new Apple TV app and Apple TV+ will be available on Roku, Amazon Fire, and smart TVs, it’s true that Apple could elect to discontinue the hardware product known as Apple TV. Whether or not that will happen is up in the air, but it’s an expensive product with a declining market share. Don’t be surprised if it fades away.
Apple’s Services Event
Stratechery’s content is typically behind a paywall, but Ben Thompson surfaced this very thorough breakdown of the Apple event and its business implications.