Unauthoritative Pronouncements

By the time I have a moment to write things about Apple TV+ these days someone else has already written it up, or talked about it, and I’ve seen no real need to jump in on the blog. There is one area that I feel like I need to say something about, and that’s the question of how much Apple TV+ will cost. I’ve posted before about how Apple’s service lacks content, so they can’t charge what competitors charge, but at the same time Apple isn’t running a charity for TV production, so money will exchange hands somewhere. They’re also making TV content, which means people need to watch it. TV content is unlike other services Apple provides, like Apple Music, where the content still exists elsewhere through other venues. It’s also unlike Apple’s other services like storage, where the goal is to charge people for space they mostly don’t use.

People have speculated about TV+ being free with the sale of certain hardware — like with the purchase of an iPhone — but while the iPhone sales have been flagging that seems like a terrible way to boost those sales. Back before this year’s CES announcements of Apple content being available on third party TVs (which eventually turned into Apple TV the app being available on third party TVs) there was even speculation that Apple would boost Apple TV hardware sales by making streaming content exclusive to Apple. That seemed like a tremendous way to lose money by making TV content.

People have also imagined Apple TV+ will be included with a bundle of Apple services. That’s something that’s a lot more likely, since it’s more akin to what Amazon Prime does where most people sign up for Amazon Prime for reasons other than the video content, and the video content turns out to be a nice-to-have, but unessential component for most customers. That’s not exactly the situation Apple finds itself in though, because I still have relatives that don’t want to pay Apple for iCloud backups, so that limits possible viewership.

Prior to Disney’s price tag for Disney+ being announced, people even thought that Apple would charge $9.99/mo because Apple charges that for Music. That didn’t seem like it would be possible even then because HBO and Netflix — hell, even CBS All Access — are all far better deals. Apple lacks any established IP to hook anyone in. Even a free trial would be a risky proposal because people would run out of material to watch on the service before a one month trial was even up.

So how does Apple make a profit on this? They could just do any of those things I said above, or a combination of those things above, because they can set money on fire for years and hope their service, and shows catch on, but that seems wrong.

Let’s examine TV the app. It was recently refreshed with a strong emphasis on content you don’t own, and don’t subscribe to being featured prominently so that you will buy content, or subscribe to services. It’s really one of the things I like least about the refresh. The addition of Apple Channels is a good thing (don’t sue me, Martha) for consumers because it prevents them from having to use the bad apps that many content providers make to house their exclusive, branded experiences in. It’s also good for Apple because Apple takes a cut off of the subscription, while also being able to fill TV the app with material. The à la carte sale of shows and movies lets people have access to things they wouldn’t consider paying a monthly fee for.

I don’t think it’s an accident that Apple configured TV the app this way. The one kind of bundling that hasn’t been discussed by Apple tech journalists is content bundling. Either:

• Sell Apple TV+ with a partner Channel, or a set selection of partner Channels. This pays for TV+ with the revenue of the bundled subscription fees. It’s also a way to redirect what consumers are already spending on subscription services. If they subscribe to HBO, CBS, etc. elsewhere, then they’ll unsubscribe and resubscribe through Apple which just reflows where the fees go in cases where Apple is not involved as a middle man.
• Make Apple TV+ free for subscribers of [a set number] of Apple Channels. Same benefits as above, but a different way to frame it.
• Sell Apple TV+ with a set number of movie rentals per month, or with selected rentals from specific partners — like how airlines and movie studios arrange for movies that get screened on an airplane flight. That’s not a long-term thing on the service, like when Netflix buys rights for months, instead it’s a short window to increase the viewership of titles that consumers could purchase. This is far more complicated than making a deal with Channels, but allows for nimble access to certain things and to more freely shape a month-to-month reason to entice people in.

Of the above, the first is the most likely, and the last is the least likely, but any combination is possible. I truly think Apple wants to retrain consumers to spend money subscribing to a variety of services. It’s a hard task, because Netflix has trained people to pay for Netflix and just watch what’s on Netflix.

Tomorrow, at the Apple event, I’m sure they’ll announce something about this, and I’ll be interested to see what path they choose. Hell, they might do something absolutely bananas and buy a studio, or make an exclusive deal for a studio’s catalog. Those scamps.