Apple TV+ — Apple’s forthcoming streaming video service — is reportedly set to launch sometime in November, at a price point of $10 a month, per Bloomberg. The news also follows a report that Apple is committing $6 billion to content spend for the service, per The Financial Times, but that figure was reported to be high, per sources to NBC’s Dylan Byers.
Apple’s strategy — whether it preempts or exactly coincides with the Disney+ launch — could be aimed at piggybacking on household interest in Disney+. For context, Disney+ is also set to launch in November, with a November 12 rollout in the US, Canada, and the Netherlands, followed by a November 19 rollout in Australia and New Zealand.
In November, households will likely define their entertainment service mixes around new rollouts, and since Disney+ will be available on Apple TV devices at launch, Apple could potentially compel Disney+ sign-ups to sign up for Apple TV+ as well.
Also mirroring Disney’s strategy, Apple could launch a bundle of its own services. An Apple media services bundle would likely include all — or an a la carte mix — of Apple TV+ ($10 a month, per sources), Apple Music ($10), Apple Arcade ($5, also set to launch this fall), and Apple News+ ($10). Pricing across the services so far would put such a bundle at less than $35. For its part, Disney recently announced a bundle of its various SVOD services (Disney+, Hulu, and ESPN+) at $13 a month, undercutting the individual offering prices by $5 a month.
If an Apple media bundle that included its various offerings also came at a substantial relative discount, Apple could potentially drive defections from rival services across the landscape, including Spotify, magazine publishers, and forthcoming cloud-gaming rivals like Google’s Stadia, also set to launch in November. It’s likely that an Apple media services package would come with various pricing tiers or permit various exclusions.
Ultimately, Apple’s investment in media services acts as a means to both draw consumers into the Apple device ecosystem and to keep them there. Regardless of how much Apple spends on original video, as Byers noted, its end game is spending enough to bring in talent and create shows that will broaden and deepen the overall appeal of the Apple brand.
In this way, content becomes a marketing vehicle, luring consumers into the Apple ecosystem and entrenching Apple hardware in households as the primary, interoperable hub for accessing content. If the tech giant is successful, content itself becomes both gateway to and synonymous with content access.
The bigger picture: As the landscape increasingly fragments, bundling as a strategy will become an increasingly common theme for media companies and tech giants that can do so.
As media conglomerates and tech giants come to market with compelling direct-to-consumer content offerings, they will increasingly need to make their services as much like bundles as possible. A bundle is simply a higher-value offering — usually offered at a relative discount than if it were split apart and sold individually on the market — that unifies various diverse assets, increasing the likelihood that consumers will find something of interest to them.
That could mean that companies combine various services under a single package — like Disney’s bundle — but it could also mean that companies bring diverse content assets under a single service. For example, despite being a single service, Netflix itself has been interpreted as a consummate “bundle” because it offers subs lots of diversified content — including from a range of media companies — at a low price point.
In the same vein, even the Viacom-CBS tie-up could mean that the companies can enrich their respective SVOD and AVOD services with content that was previously fragmented across a variety of linear TV channels.
Given the eroding value of the traditional bundle, redesigned streaming content bundles will continue to emerge and seek to capitalize on pay-TV’s decline. New content bundles are likely to make the traditional content bundle — via cable or satellite — seem increasingly irrelevant, which could spur further erosion.
In Q2 2019, cord-cutting losses hit a single-quarter record of 1.53 million video customers among the top pay-TV operators, per LRG. Q2 is a seasonally bad quarter for pay-TV services, but Q2 marked the fourth consecutive quarter of record losses. And although losses could slow, they won’t stop: More than a quarter (27%) of US households are expected to cut the cord by 2023, per eMarketer.
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