In a remarkable display of innovation, Apple just invented the credit card. And Game Pass. And HBO. And magazine editors. But what the company’s big services showcase lacked in new ideas, it more than made up for in hubris. Apple’s grand plan is simple: now the great unbundling of services has begun, it’s finally time for the great rebundling of services to start in earnest.
In the coming months you could conceivably pay Apple upwards of $40 a month for magazine subscriptions, gaming, TV and music. That’s on top of paying it $1,000 every couple of years for a new device that enables you to gain access to a closed ecosystem of premium services. It’s a doozy of a deal. If your name is Tim Apple. Short of becoming a mobile network, this is Apple signalling its intent to own a substantial chunk of the whole ecosystem.
Consider this: there are 900 million iPhones in use around the world – even if only a fraction of those iPhone owners start subscribing to one or more of Apple’s services, the numbers quickly become substantial. And if success doesn’t come quickly, the iPhone-maker undoubtedly has the cash reserves to suffocate competitors out of the market.
Just look at Apple Music. Launched just over three years ago, it’s been quietly gaining on Spotify ever since. And while its Swedish rival still has 36 per cent of the global market, Apple Music is now on 19 per cent. Crucially, Apple has reportedly overtaken Spotify when it comes to paying subscribers. And as Spotify’s recent cry of foul play illustrates, Apple’s tight level of control over its platform makes it difficult to compete when the Cupertino-based firm decides to take you on.
But achieving that level of success elsewhere is going to be a major challenge. As such, where Apple used to out-innovate its competitors with hardware, it will now attempt to out-spend them with services.
On the face of it, nowhere is that more evident than with Apple TV+, which remains scant on detail but high on celebrity endorsements. Even Steven Spielberg, who has beef with rival streaming service Netflix, is getting involved. Then there’s J.J. Abrams, M. Night Shyamalan, Ron Howard, Sofia Coppola, Reese Witherspoon, Jennifer Aniston, Oprah Winfrey and, last but not least, Big Bird. It’s a dazzling array of talent, but Apple’s showcase did little to allay fears that it’s only capable of delivering a very clean, family-friendly brand of entertainment.
The company insists this isn’t “just another streaming service”, but has provided scant evidence to suggest otherwise. In fact, it’s provided scant evidence to suggest much at all. We still don’t know how much it will cost or how many original shows it will have, two key questions that many expected to be answered. At present, Apple TV+ looks more like a non-essential add-on to the main Apple TV app than a fully fledged Netflix competitor. While Netflix is in effect a whole TV network, Apple TV+ is seemingly more of a premium subscription TV channel. It’s a nice bonus, complete with an Oprah book club.
Which might help to explain why the big names aren’t yet being backed up by the big bucks. In 2019, Netflix is expected to spend $15 billion on content. Apple will spend $2bn. For that outlay, to date, Apple has little more to show than a fleeting montage trailer of original shows and an awkward live skit between Steve Carell and Jennifer Anniston. It was all very wholesome, it was all very establishment and it was all very Apple.
Tweaks elsewhere in Apple TV – such as allowing people to subscribe to individual cable TV channels through the app – also raise more questions about how its own premium TV offering will work alongside an increasingly muddled smorgasbord of content. Apple’s attempt to get a grip on the lucrative TV subscription market is in part a reflection of that market: prohibitively complex and, for many, prohibitively expensive. A company with a reputation for excellent design ought to be making this process simpler, instead it appears as though Apple simply wants you to pay a different company (namely Apple) for the same old subscriptions.
Apple’s bet here is that its TV app can tidy things up (and persuade people to upgrade to Apple TV+). As such, Apple TV will soon be available on Roku, Amazon Fire TV and smart TVs from Samsung, Sony, LG and Vizio. Apple will hope it becomes a one-stop-shop for all your couch potato needs – and take a cut of all those lucrative subscriptions to boot. The one problem? Netflix, Hulu and Amazon Prime Video aren’t bundled up in Apple’s Everything App. It’s like a really noisy party full of all the people you don’t really like anymore. Outside Apple’s walled garden, Netflix et al. still fancy their chances.
Elsewhere, success for Apple appears more straightforward. “We believe in the power of journalism and the impact it can have on our lives,” said CEO Tim Cook as he introduced Apple News+, a premium newspaper and magazine subscription service. Moments earlier, the company explained the 300-odd publications made available through News+ for less than $120 a year would, without its bargain bundle, cost in the region of $8,000. As one weary publishing executive put it last month, “It’s the absolute dollars paid out that matters, not the percentage.” Simply put, Apple has scale and publishers are desperate for even a measly share.
And if there’s a feeling we’ve been here before that’s because we have. Apple News+ is a curious repackaging of Apple’s failed Texture service, which itself was a riff on the great pivot to iPad magazines that was powered by Newsstand (launched in 2011, shuttered in 2015). The difference here? Apple takes a 50 per cent cut of the revenue. And, to the surprise of many, the service – which will launch in the US and Canada before expanding to Australia and the UK this autumn – will also include The Los Angeles Times and The Wall Street Journal. Other major newspapers will likely follow.
Leaving Apple Card aside (a strange riff on Monzo, but powered by Goldman Sachs), Apple’s grand launch into the world of services is a mixed bag. Apple Card, in the US, has the potential to be as much of a success as its titanium card will become a tedious status symbol. Then there’s Apple Arcade, which was made to look small fry in the wake of Google’s potentially industry-altering Stadia service. Apple News+ shows promise, even if its bargain-basement pricing will send shivers through the publishing industry.
Which leaves the headline-grabbing Apple TV+. Despite all the hype, its grand intervention into the world of TV looks a lot like... old TV. Apple is doing the same thing as everyone else in this increasingly crowded industry: it’s spending money to sign up big talent to make traditional, wholesome TV shows.
But what Apple News+, Apple Arcade and Apple TV+ lack in imagination they more than make up for in convenience. As it has shown with Apple Music, when it puts money and promotional power behind a service preinstalled on more than a billion devices, Apple invariably gets a few people to sign up. Amongst all the hyperbole, perhaps Oprah said it best: “They’re in a billion pockets, y’all”. But as Apple shifts from innovation to writing cheques, it isn’t at all clear if convenience alone will be enough for it to become the next great bundler.
This article was originally published by WIRED UK
