Apple Music Vs Amazon Prime Music

The race is on as Apple’s TV on demand service inches toward launch

Apple is investing huge quantities of cash in creating compelling video content around which it hopes to build an exciting and enticing subscription video on demand (SVOD) service that takes on Netflix and Amazon Prime.

Here are some of the reasons its service should work:

What has Apple been doing to build an SVOD service?

Apple has built a substantial crew of film and film-related industry talent to help push the new product idea forward. It has hired key executive talent,  purchased rights to content from some big names, including Steven Spielberg, and is busy figuring out a business strategy, one that’s likely to be supported by innovative technology offerings.

Key executives include people withbackgrounds in Sony, Netflix, WGN, Tribune Studios, Amazon, Hulu and broadcasters from all over the world. Led by Zack Van Amburg and Jamie Erlicht, the team also includes (incomplete list):

  • Layne Eskridge
  • Angélica Guerra
  • Kim Rozenfeld
  • Matt Cherniss
  • Morgan Wandell
  • Tara Sorensen
  • Carol Trussell
  • Philip Matthys
  • Rita Cooper Lee

That’s the team, but what’s the expectation?

Morgan Stanley analyst, Katy Huberty is really positive about the company’s plans, telling clients: “We forecast that an Apple Video streaming service with high-quality but limited breadth could be priced at the low end vs. competitors, or $7.99/month, and reach over 50 million paid subscribers by 2025, compared to 124 million at Netflix subs and Apple’s 650 million-unit iPhone installed base.”

She predicts it could become a $4.4 billion business by 2025. Here report is called Apple, Inc.: The Emerging Power of Apple Services, Part 3: Video a New Growth Driver in 2019.

A NASA image of earth from space>

A NASA image of earth from space will be a screensaver in the next tvOS

Why will Apple’s video service work?

So, what are the ingredients that may make this mission work?

#1: Happy customers

Apple has maybe 650 million active iPhone users in the world and this is expected to increase to maybe 700 million once the company ships new iPhones. These customers share 90%+ customer satisfaction ratings, and they will be interested to give the service a chance – and if the content is compelling enough, they’ll stick with it.

#2: Smart bundling

Apple already owns leading music, TV and movie download service, iTunes. Supplementing these, it also recently acquiredthe Texture news and magazine subscription service and has a powerful force in music streaming thanks to Apple Music. This means it has a chance to bundle music, news and magazines and its new SVOD services at a reasonable price – and build a much larger customer base as a result. Think $7.99 for just movies and $12.99 for movies and music, for example.

Eddy @cue of @Apple on acquisition of Texture. #sxsw pic.twitter.com/GkSs1NCQU4

— KVUE News (@KVUE) March 12, 2018

#3: Added value

If you buy movies from iTunes you’ll already be seeing iTunes Extras. These are often a little disappointing but depend entirely on what the studios provide. Apple has a chance to create its own additional multimedia items for its own content – so that would span exclusive interviews, compelling behind-the-scenes footage, and could also open up new technology chances, group Facebook chats with the cast? AR objects to play with around the home? AR gaming experiences based on (for example) Foundation? Added contextual information, screensavers and more. Apple has technologies to do all of these things, so it has a chance to become the poster child for making good use of them.

#4: Ease-of-use

Apple has decades of experience in online payments. It has a micropayments system that handles hundreds of thousands (or more) of transactions daily. It has payments systems in place worldwide, and the servers to support them. It has the infrastructure and experience to deliver incredibly frictionless payments support – you’ll just sign-up for the service once, and you’ll be able to control future payments using the Subscriptions section on your Apple TV.

You can’t underestimate the value of Apple’s trusted brand and trusted payments infrastructure when it comes to attracting customers to new products (particularly since the customers trust Apple anyway). In part this is why the company was able to build 40 million Apple Music subscribers in two years – in competition with Spotify’s huge share (and free music sharing, of course). Easy-to-use, easy-to-access, easy-to-pay and easy to terminate, people will want to try the service – Apple’s job will be to get them hooked.

I’ve a feeling this recipe means millions of exiting Apple Music subscribers will spend a few dollars more for video content, while the popularity of SVOD will drive millions of less music-focused Apple customers to also sign-up to the service.

This suggests adoption could very much exceed Huberty’s 50 million by 2025 estimate.

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#5: Content

Getting people hooked means Apple’s success also depends on how popular its content happens to be. I’ve argued before that if the content is too buttoned-down and sanitized it will not catch the audience sweet spot – the very best content is risky, exciting, challenging. Here’s a list of everything Apple plans to show us gathered from multiple reports (links to source where I remembered them):

  • A TV series based on Isaac Asimov’s Foundation (exciting!)
  • Steven Spielberg’s “Amazing Stories” anthology
  • A sci-fi series from Ronald D. Moore (Battlestar Galactica)
  • A documentary about climate change, possibly called ‘Losing Earth’
  • A series based on cult hit movie, Time Bandits.
  • A multi-year deal with Oprah Winfrey, details scarce.
  • A series called See, written by the author of Peaky Blinders and directed by the director of Hunger Games.
  • A drama from Oscar winner Damian Chazelle
  • A series about Emily Dickinson
  • A series by LaLaLand and Whiplash writer, Damien Chazelle

[Also read: What Steve Jobs said about the future of television]

  • A series based on child journalist, Hilde Lysiak (this will be a sleeper hit, I’m feeling)
  • A series based on best-selling novel, “Pachinko”
  • A series based on novel, Shantaram
  • A Jennifer Anniston and Reese Witherspoon drama
  • A comedy originally meant to star Kristen Wiig, which hit a snag
  • A Reese Witherspoon-connected drama
  • An English-language version of French series, “Calls”
  • Potentially, an animated show from Oscar-nominated, Cartoon Studio
  • A series about U.S. immigrants (does this include Native American feeling about them?) called Little America
  • A documentary series (“Home”) that sounds like it’s about rich people’s homes
  • A thriller series from M. Night Shyamalan
  • A film drama concerning the life of Golden State Warriors player, Kevin Durant
  • Comedy from the co-creators of “Always Sunny in Philadelphia” Rob McElhenney and Charlie Day
  • Dr Dre’s Vital Signs
  • Cartoons from Loren Bouchard (“Bob’s Burgers”.)
  • Kids TV from Sesame Street’s Sesame Workshop.
  • A series called Little Voices
  • Planet of the Apps?
  • Carpool Karaoke?
  • Animated musical comedy, Central Park

What this might mean

That’s a lot of content, likely to be published over time and almost certainly not including all the shows and series Apple has planned or purchased, given its incredibly secretive nature.

It does seem worth pointing out that this collection spans sports, biographical, sci-fi, kids, documentary, music-related, human interest and family entertainment products, along with international content. This means Apple is actively engaged in delivering a complete catalog, rather than focusing on sci-fi, though Apple may play to the strengths it identifies as its offer matures.

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I imagine the company may even be thinking about some form of news channel, given it already hires editors to manage that service.

The Mac and iPhone how-to channel should also be popular, if the company ever puts it together. It could call the show ‘Genius Tips’, filming customers, internal developers and retail staff sharing their favorite tips and answering advice questions. This would be hugely popular.

Tomorrow’s world

The thing is, for all the shows listed I do feel Apple may be missing a trick: The impact its technologies have had across multiple facets of human existence is a story in itself, and it seems to me there’s a huge opportunity to make shows about this transformation. How has iOS transformed farming? How do you use an iPad in the air? What about the impact of satellite networks and mobile access on shipping? I see that as a magazine show, a la ‘Tomorrow’s World’. Obviously, my constant grinding poverty means I’m available to help put it together. Does anyone out there need some writing done? (Answers on a postcard, please).

Signing off: I’m excited to see what Apple’s SVOD service ends up delivering, and while I’m a little saddened the service may only be available in the States (at first), it does strike me that ownership of the content will give Apple a huge opportunity to deliver compelling services in some of the countries it wants to build business in – how popular is Bollywood?

I can’t help but also wonder at what point enough people will be using Apple’s video-on-demand services that it makes sense to sell an insanely great TV to that audience.

Source : http://www.applemust.com/5-reasons-apples-video-service-will-be-worth-billions/

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