Ad-free TV and news: breaking down Apple’s subscription announcements
Apple chief executive officer Tim Cook took the stage in Cupertino, California today (25 March) to announce a slate of new offerings from the tech giant.
Oprah Winfrey delivered the last presentation of the day to announce her partnership with Apple TV+
The company introduced a new Apple TV app that will aggregate streaming channels all in one place, including an array of original programming from its streaming service, Apple TV+.
It also introduced Apple News+, a premium news subscription service built into its existing, free Apple News app.
Apple, too, showcased a subscription video game service within the App Store called Apple Arcade, which Cook said will not collect users' data without their consent. Coming this fall, it will make more than 100 video games available on mobile, desktop and Apple TV.
The tech company showed off its new credit card, Apple Card, which will be available on iPhones in the Wallet app, and as a physical, platinum card. Apple has partnered with Goldman Sachs and Mastercard for its credit card, which will be available this summer.
Cook and his fellow Apple executives stressed during the presentation that data from each of the services will not be shared with third parties, and they won’t make room for any ads. Apple already has a privacy-first mantra, and its Intelligent Tracking Prevention within Safari has been a thorn in marketers’ side since 2017.
Ari Paparo, chief executive officer of adtech company Beeswax, said Apple’s privacy-first stance misses the boat.
“The reality is that anonymous cookies form the backbone of the digital advertising business and help pay for the journalism and content consumers love. These cookies contain no personal information and cannot be associated with real people or their private information.
"Unfortunately, adtech companies are an easy scapegoat to help companies like Apple try to seem more customer centric in competition with Google and others, as well as for ill-informed regulators to try to tackle this complex issue,” said Paparo.
While the ad world may not have a place within Apple’s new offerings, publishers and content creators have new homes to reach a global audience. Oprah Winfrey, while on stage announcing her partnership with Apple on two documentaries and the relaunch of her book club, said: “They’re in a billion pockets, y’all … The whole world’s got them in their hands.”
Apple's much-anticipated OTT product, Apple TV+, will live within a revamped version of the Apple TV app that will house channels such as Hulu, ESPN, Showtime and HBO and exist within smart TVs and on Mac computers later this year.
Apple didn’t share the cost of the new OTT service, but it will be available in over 100 countries.
Forrester analyst Jim Nail said Apple’s advantage for its TV service is the company's reach of 1.4bn devices.
“They are leveraging that power to drive the new streaming service: pretty much everyone, except Netflix, wants to have access to that breadth of distribution,” said Nail.
Nail added that Apple still faces stiff competition from Netflix, as its ambition to bring the world together through storytelling is much too big, so the company is forced to differentiate itself in other ways.
“As a result, Apple is distancing itself from the rest of big tech that has become associated with privacy violations, exploitation of consumer data, and the perception of sowing all sorts of divisions in society,” said Nail.
The OTT landscape is already crowded. Dallas Lawrence, chief brand officer of ad exchange OpenX, said original content isn’t king, no matter how much Apple spends on it. Instead, the tech company should focus on sticking to the 15/10 rule: consumers are generally willing to pay for 15 channels at $10 each.
“If Apple can crack the skinny bundle code and deliver a unique and holistic OTT ecosystem for consumers, they could very well become the primary disruptive force in streaming video,” said Lawrence.
Apple’s premium news subscription service will offer more than 300 magazine titles for $9.99 a month.
Apple also will include content – though not all content – from newspapers such as The Los Angeles Times and The Wall Street Journal, along with other sports, news and entertainment publications.
This is seemingly the next step for Texture, a subscription news app Apple acquired last year, and has been pitching it as a new home for publishers. However, titles The New York Times and The Washington Post aren’t participating due to reported differences over revenue sharing.
Gartner analyst Charlie Golvin said this news service – and the new OTT offering – are nothing new, but the tech company is delivering the products "in the standard Apple way" of giving consumers a better experience with existing products.
The news feature launches in the US and Canada, and will be made available in Australia and the UK later this year.
Cook said what users read won't follow them across the web, and that ads won't be on the platform.
"From an advertiser standpoint, it's just one more step of isolation, one more insulator between you and the target audience you're trying to reach," said Golvin.
Apple's chief executive said he believes in the power of journalism and “the good it does for the public.”
Kris Hull, Kantar’s senior vice-president, North America brand guidance leader, insights division, said for Apple News+ to succeed, it needs to have a substantial array of content.
“The portfolio of properties matters. If Apple can work out revenue sharing terms to have a broad base of content from across the news and political spectrums, it puts itself in a very strong position.
“It can also position itself as a defense of sorts against the media echo chambers that often exist now, where people only read content that is consistent with their worldview. Like its music genius in iTunes that helped expand user’s libraries, perhaps a news genius can expand the media people are exposed to,” said Hull.
All of Apple’s recently announced products are going global – Apple Card will be available in more than 40 countries, and Apple Arcade will be available in over 150 countries.
Golvin said Apple Card may be the secret money-maker of the bunch, as Apple won't have to invest billions in payment services like it would in TV, while raking in a small percentage of a "gargantuan" amount of transactions.
Hull questioned whether Apple’s brand has enough “elasticity” to effectively expand into these new spaces, but he believes Apple's loyal users will help.
Allen Adamson, former North American chairman of Landor and a marketing professor at NYU, said this global expansion gives Apple “the potential power to pull them ahead” of a crowded US marketplace as the company moves into new markets.
He added that it’s impossible for Apple to consistently count on technology breakthroughs, so a larger focus on content is a natural next step for a brand founded by a creative mind like Steve Jobs.
“Now [Apple is] making a major shift to go well beyond software into content creation and creativity. I think they will be more successful than those who have tried it before.
“Ultimately, Apple has a much better chance of pulling this off because creativity is so core to their company DNA,” said Adamson.