Apple Takes On Media Giants, Banks In Services Push

Apple’s announcement of a major foray into services may pose a significant challenge for dominant players in industries ranging from media to banking, industry watchers have said.

The move is part of a broader shift toward services, as Apple looks to reduce its dependence on the iPhone, whose sales have begun to slow.

At a keynote event held at its Apple Park headquarters in Cupertino, Apple brought in the likes of Steven Spielberg and Oprah Winfrey to introduce a new streaming television service called Apple TV+.

Unlike its previous television efforts, the new service is intended to operate on non-Apple devices, including smart televisions, Roku and Amazon’s Fire TV.

Multiple services

Apple also said it plans to launch a credit card, a paid games offering and an expanded news app.

While few details were available on some of the services, notably the television offering, analysts said Apple has the potential to become a significant player due to its massive base of 1.4bn active devices, including 900 million iPhones worldwide.

“In essence Apple is seeking to become a Netflix of everything in services; music, news and magazines, video and games,” PP Foresight analyst Paolo Pescatore told the Financial Times.

Some analysts predicted Apple will eventually launch an all-in-one subscription service, along the lines of Amazon Prime, giving users access to a range of services for a flat monthly fee.

For the moment, however, the company focused on outlining a number of separate offerings.

Apple TV+

Apple TV+, which was introduced by chief executive Tim Cook, was the highest-profile service at the event, and also the one about which the fewest details were disclosed.

It puts Apple into direct competition with Amazon and Netflix, but unlike those services, it will only provide access to exclusive new content commissioned by Apple itself.

The service is to be provided through Apple’s existing Apple TV app, which is preinstalled on newer iOS devices and the Apple TV device.

Apple said the app will come to Mac computers this autumn, with plans to bring it to smart televisions from Samsung this spring, and TVs from Vizio, Sony, LG and others later on.

Roku and Amazon’s Fire TV are also planned to be supported at some future date.  Apple didn’t indicate plans to support Android or Windows.

Distribution

“Distribution is as important as content,” analyst Pescatore said on Twitter. “Good to see Apple supporting other devices.”

Apple already offers a catalogue of licensed television programming and films via its iTunes Store, and users can access that purchased or rented programming through the existing Apple TV app.

The company said Apple TV+ would allow users to sign up for third-party services such as HBO, CBS and Starz within the service, and said it would be handling those third-party streams itself, for optimum picture quality, as well as allowing users to download third-party content for offline viewing.

Apple didn’t indicate how much it plans to charge for the streaming service, which is set to launch in 100 countries this autumn, but said it would be releasing new content every month.

Apple is thought to be investing about $1bn (£760m) to $2bn in content thus far, significantly short of the $15bn spent by Netflix.

News service

Apple also announced a subscription service for games and a $10-a-month news app, Apple News+, which includes magazines from Condé Nast and major US newspapers such as The Los Angeles Times and The Wall Street Journal – although reports indicated the WSJ plans to provide access only to “curated” general news content, rather than its business reporting.

The Apple Card credit card, developed with Goldman Sachs, is to be released in the US this summer.  Apple didn’t indicate plans to roll it out internationally.

The company is already a major player in payments via Apple Pay, which it said was on track to surpass 10 billion transactions this year.

Apple emphasised the privacy features of its services, saying Goldman would not sell any customer data for advertising or marketing purposes; likewise, the Apple Arcade gaming service will show no adverts, and Apple News+ will not track users or allow advertisers to do so.

Privacy features

“The most important point for today was advertising and privacy,” Thomas Forte, an alayst with D.A. Davidson & Co, told Reuters.

Analysts said that while Apple’s announcements show an impressive commitment, Apple faces a major challenge in transforming its ubiquitous devices into portals for paid content.

Chatham Road Partners analyst Colin Gillis noted that the streaming market has arguably already reached a saturation point in the US, while others noted that a number of major media companies had declined to participate in Apple’s efforts.

Netflix and Disney are not taking part in Apple TV+, for instance, while The Washington Post (owned by Amazon chief executive Jeff Bezos), The New York Times and others are notable gaps in  Apple’s News+ offering.

New York Times chief executive Mark Thompson last week summed up the paper’s wariness toward Apple, saying: “If I was an American broadcast network, I would have thought twice about giving all of my library to Netflix.”