A couple weeks ago, I watched Apple’s Killers of the Flower Moon was pretty much shut out of the Oscars. This article isn’t about that, really. I mean, it’s old news. It’s about the real question of whether or not Apple will keep throwing money at its streaming service. I hope they do but I can’t imagine they will.
Killers brought in $157 million at the box office on a budget of $200 million. I’m not quite sure how one spends $200 million on a film that doesn’t rely on special effects, but I’m guessing a lot of it went into the stars’ and director’s pockets. Good for them. But the point is most people waited to see the film on streaming. I know I did. And there is where the problem comes in.
Calculating streaming profits is obviously very hard. Your subscribers pay the same no matter if you put new content there or not. So, the only real motivation to putting expensive content on a streaming service is keeping subscribers from leaving. That has to be one messy equation.
In 2024, most streaming companies aren’t willing to throw massive amounts of money at projects and hope they attract subscribers. Yet that seems to still be Apple’s policy. I’m not complaining. It seems like the service gets more valuable every month, with great series and movies coming out alongside an increasing number of older catalog movies. For ten bucks a month you get real 4K programs, too. Take that Netflix and Max!
What’s even more impressive is that over the app’s history a lot of people got it for free or for a discounted price. You can often get 3 free months with the purchase of different Apple devices, and Best Buy occasionally has a promotion where they’ll give you 3 months free for absolutely no reason. If you’re in the Apple ecosystem, you can bundle services so that by paying under $20 a month you get music, storage, and the Apple TV+ app. Again, I’ll put it in bold this time, take that Netflix and Max!
But, I have to wonder how long this will all last before Apple chooses to make money from its platform. They could not possibly be turning a profit now. I don’t need to see the books to say that. Big, theatrical-quality releases and high-quality scripted shows cost a lot of money and there’s no way Apple is making it all back ten bucks at a time. I’m not complaining, I’m just saying it couldn’t possibly last forever.
CNBC tells us that Apple pulled in $383 BILLION last year with nearly $100 BILLION net revenue. CNBC calls that “underperforming.” I’d personally love to underperform at that level, please sign me up. They do this because they’ve become more of a fashion brand than a hardware brand. Don’t get me wrong, I think the products are excellent. But even I can’t deny that there’s not a gigantic difference between a $200 phone and Apple’s flagship, at least not the way I actually use my phone. But just as people pay extra for a Louis Vuitton or Prada logo, they pay extra for the Apple logo. Apple’s managed to put that logo in front of a lot of people, even on competitors’ streaming boxes. Maybe they just look at Apple TV+ as an advertising expense.
Because remember folks, advertising is a very subtle business. At the level Apple plays at, it’s not about advertising the product. It’s about advertising the experience. When you see the Apple logo attached to something premium like a $200 million movie, it makes you think that everything with the Apple logo is a premium product. It makes you more likely to buy $1,500 phones and $5,000 VR headsets. At least that’s the theory, and in Apple’s case it certainly seems to work.
In 2024, streaming looks more dire than ever. Netflix and Max charge more for less. Disney has run out of superheroes and Jedi knights. Paramount is on the chopping block, and Prime Video now charges a monthly fee. Put simply, things ain’t great if you’re a streaming service. That is unless you’re Apple, where shiny high quality content seems to come out all the time for the precious price of under ten bucks a month.
Obviously it’s not going to last forever. It can’t. What goes up, must come down. At some point, someone in some board room is going to say “hey, we can’t keep doing this.” And, they’ll stop doing it. They’ll start charging $30 a month for Apple TV+ or scale it back to one or two movies a year and a bunch of forgettable shows.
But that’s a problem for tomorrow. For now there’s still one shining light left in the streaming universe. It’s not the one I expected, and it’s only a shining light for subscribers not for shareholders. But enjoy it while it lasts. Seriously. Enjoy it now because this may be the last time you hear me blogging about anything in the streaming world costing under ten bucks.
The post STREAMING SATURDAY: Will Apple TV+ be able to survive? appeared first on The Solid Signal Blog.
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Killers brought in $157 million at the box office on a budget of $200 million. I’m not quite sure how one spends $200 million on a film that doesn’t rely on special effects, but I’m guessing a lot of it went into the stars’ and director’s pockets. Good for them. But the point is most people waited to see the film on streaming. I know I did. And there is where the problem comes in.
Calculating streaming profits is obviously very hard. Your subscribers pay the same no matter if you put new content there or not. So, the only real motivation to putting expensive content on a streaming service is keeping subscribers from leaving. That has to be one messy equation.
Apple TV+ may be the last great streaming platform… for now
In 2024, most streaming companies aren’t willing to throw massive amounts of money at projects and hope they attract subscribers. Yet that seems to still be Apple’s policy. I’m not complaining. It seems like the service gets more valuable every month, with great series and movies coming out alongside an increasing number of older catalog movies. For ten bucks a month you get real 4K programs, too. Take that Netflix and Max!
What’s even more impressive is that over the app’s history a lot of people got it for free or for a discounted price. You can often get 3 free months with the purchase of different Apple devices, and Best Buy occasionally has a promotion where they’ll give you 3 months free for absolutely no reason. If you’re in the Apple ecosystem, you can bundle services so that by paying under $20 a month you get music, storage, and the Apple TV+ app. Again, I’ll put it in bold this time, take that Netflix and Max!
But, I have to wonder how long this will all last before Apple chooses to make money from its platform. They could not possibly be turning a profit now. I don’t need to see the books to say that. Big, theatrical-quality releases and high-quality scripted shows cost a lot of money and there’s no way Apple is making it all back ten bucks at a time. I’m not complaining, I’m just saying it couldn’t possibly last forever.
Does Apple even care if their service makes money?
CNBC tells us that Apple pulled in $383 BILLION last year with nearly $100 BILLION net revenue. CNBC calls that “underperforming.” I’d personally love to underperform at that level, please sign me up. They do this because they’ve become more of a fashion brand than a hardware brand. Don’t get me wrong, I think the products are excellent. But even I can’t deny that there’s not a gigantic difference between a $200 phone and Apple’s flagship, at least not the way I actually use my phone. But just as people pay extra for a Louis Vuitton or Prada logo, they pay extra for the Apple logo. Apple’s managed to put that logo in front of a lot of people, even on competitors’ streaming boxes. Maybe they just look at Apple TV+ as an advertising expense.
Because remember folks, advertising is a very subtle business. At the level Apple plays at, it’s not about advertising the product. It’s about advertising the experience. When you see the Apple logo attached to something premium like a $200 million movie, it makes you think that everything with the Apple logo is a premium product. It makes you more likely to buy $1,500 phones and $5,000 VR headsets. At least that’s the theory, and in Apple’s case it certainly seems to work.
Let’s hope the good times continue
In 2024, streaming looks more dire than ever. Netflix and Max charge more for less. Disney has run out of superheroes and Jedi knights. Paramount is on the chopping block, and Prime Video now charges a monthly fee. Put simply, things ain’t great if you’re a streaming service. That is unless you’re Apple, where shiny high quality content seems to come out all the time for the precious price of under ten bucks a month.
Obviously it’s not going to last forever. It can’t. What goes up, must come down. At some point, someone in some board room is going to say “hey, we can’t keep doing this.” And, they’ll stop doing it. They’ll start charging $30 a month for Apple TV+ or scale it back to one or two movies a year and a bunch of forgettable shows.
But that’s a problem for tomorrow. For now there’s still one shining light left in the streaming universe. It’s not the one I expected, and it’s only a shining light for subscribers not for shareholders. But enjoy it while it lasts. Seriously. Enjoy it now because this may be the last time you hear me blogging about anything in the streaming world costing under ten bucks.
The post STREAMING SATURDAY: Will Apple TV+ be able to survive? appeared first on The Solid Signal Blog.
Continue reading...
