What's going on?
On Monday, Apple unveiled its hotly anticipated plans for video and news… and no, it’s not taking shots at Netflix – not directly, anyway (tweet this).
What does this mean?
Apple is investing some $2 billion a year in original programming involving some big names – but that’s not a patch on Netflix’s expected $15 billion 2019 content spend. Instead Apple’s focus is helping Netflix competitors – like Hulu, Amazon (via Prime Video), and cable channel HBO – sell bespoke bundled subscriptions to cord-cutting millennials while taking a cut for its troubles.
When it comes to news, Netflix comparisons may be justified: Apple also announced a magazine subscription service, seemingly built upon its 2018 purchase of Texture. For a $10 monthly fee, customers can access articles from 300-odd publications.
Why should I care?
For you personally: Services may bear fruit.
There are currently 1.4 billion active Apple devices in the world – and, as a Finimizer, there’s a one-in-two chance you’re using one of the near-billion iPhones out there. But Apple’s not selling as many phones as it used to, and only a quarter of its device owners pay for additional services. By adding more strings to its highly profitable services bow, Apple is likely hoping to encourage more people to stump up (and keep them from defecting to cheaper rivals). The company has proven it can make a splash in crowded pools: Apple Music overtook Spotify in US subscribers last summer. And by teaming up with Goldman Sachs on a new iPhone-native credit card, it’s also hoping to get finance wet.
For markets: Media rivals at the ready.
Apple’s stock fell slightly – investors may be mulling how big an impact the largely expected new services will have. But traditional media companies aren’t standing still: on Monday, Viacom’s stock rose 6% after it announced a fresh deal with AT&T, the US’s second-biggest pay-TV provider, to keep its shows being broadcast.