Far wealthier in real cash terms than its tech or legacy competitors, Apple’s TV strategy, which has eschewed the acquisition of existing content in favour of developing a curated slate of high quality content, should be seen in the context of building added value to the less frequent buyers of its products, according to a new analysis.
Why it matters
Given the scale and prestige of the brand, Apple can afford to play the long game with its Apple TV+ streaming service. Strengthening the bundle of services that make up the Apple One bundle – including TV+, Music, Arcade, iCloud+, News+, and Fitness+ – contributes to pushing the iPhone maker’s services business in the direction of $20 billion per quarter. This stands in sharp contrast to the content arms race that has come to characterise the streaming wars.
What’s going on
Apple TV+ is a strange beast that enjoys an install base of 1.6 billion devices, a cool billion of which are iPhones.
Despite a slate of award-winning hit shows, estimates suggest that the service has an uncommonly high churn rate versus the competition.
A different game
A new analysis by Observer suggests Apple TV+ needs to be understood as the software flipside of Amazon’s Fire TV hardware product: with high device penetration and availability across Roku, Amazon, Google, and Sony devices, it is there to both add value to existing users, strengthening a data set that will inform future development.
Hit shows like Ted Lasso might generate chatter, but doubts remain as to whether they keep customers coming back – a necessity that drives competitors to acquire catalogues of existing material that are proven hits.
Growth now is to be found in its services division as people expect their iPhones to last them longer than 12 months. The bet now is on the strength of a total ecosystem based, in part, on unmissable TV.