Apple will have to have hit shows, target iPhone users with its TV service

Given that pay-TV customers historically spent more than $100 a month on TV subscriptions, getting users to pay for one more service might not be too much of a stretch.

“It’s fair to say the market is primed for consumers to subscribe to multiple services and they do already,” Fadaghi says.

Apple could also bundle its SVOD with other services it has in the market, such as music and games, Fadaghi says, to help it come up with offering that’s of interest to customers.

Given it’s so late to market, one possibility is that Apple will try to bundle its service with competing SVOD services such as Netflix, creating a one-stop shop for that lets iPhone users sign up for just one subscription, and get everything, says Alex Kidman, the tech and telco editor at Finder.com.au, a service comparison website.

Video subscriptions are still growing strong, but as Amazon has discovered, it’s not easy when you’re late to the market. AFR Graphics

Great deals needed

But it would have to offer great deals to its competitors to have any chance of getting them on board, he says.

Apple charges an “Apple tax”, of between 15 and 30 per cent, to any subscription service that customers sign up for using the app store on their iPhones or iPads.

It’s costly enough that Stan has made a practice of getting iPhone users to leave the app store, and sign up using a web browser, to avoid it. (Officials from Stan, which is owned by this paper’s proprietor, Nine, were unavailable for comment.)

And late last year, Netflix, the single highest-grossing app on iPhones, said it was doing the same thing, saving itself more than $US120 million ($168.7 million) in fees it was paying to Apple each year, just to have its subscriptions enabled through the Apple app store, according to figures from Sensor Tower.

Absent an “unlikely” bundling deal that would see Netflix and other competitors signing up for the Apple tax all over again, Apple will need to have a “Game of Thrones-style” hit if it’s to gain any traction with its SVOD service, Kidman says.

The world’s richest company is reported to have already signed up more than $US1 billion worth of original content, including a series based on the 1981 Terry Gilliam movie Time Bandits, and another series based on the soon-to-be-published memoirs of a former CIA operative, Amaryllis Fox.

It’s also reported to have signed actress Jennifer Garner and the filmmaker J.J. Abrams to produce a short series based on the memoir My Glory Was I Had Such Friends, about a woman waiting for a heart transplant.

Will it be enough to get customers interested?

“They would have to have a really good platform with great quality content before I would think about signing up,” says McGlashan.

Apple officials declined to comment for this story.

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