Grey clouds gather over Apple as Netflix snubs imminent streaming service

Apple is on the verge of announcing something big, but its TV streaming ambitions have been undermined as Netflix dismisses any tie-up with the iLeader.

Speaking at a press event at the streaming giants HQ, CEO Reed Hastings said Netflix would not be partnering with Apple or allowing its content to be hosted on any streaming service it might announce. There are a lot of unknowns about the Apple announcement on March 25, but at least this has been cleared up.

Rumours suggest Apple is going to create a streaming platform which could potentially compete against Netflix, though this is only one facet of the increasingly fragmented content landscape. With Disney and AT&T’s WarnerMedia also set to weigh-in, consumer frustrations are unlikely to be relieved any time soon.

With content becoming increasingly fragmented, a platform which brings everything together could be the winning formula.

“Content aggregation is the holy grail,” said Paolo Pescatore of PP Foresight. “There is too much fragmentation in video/TV; no-one wants to sign up to different services and have numerous apps. It is a disastrous experience.

“Beyond having the right content, the user experience is key. This means getting the content people want in one place, with one bill, universal search and all that jazz. In reality, this is hard to achieve as typically half of a household wants sport and the other half want entertainment, movies and kids shows.

“Netflix has done a great job to date. However, more content and media owners will pull programming off its offering. This represents a significant opportunity for the likes of Apple who has scale and greater resources. There is a role for a small number of players in the future.”

One question which should get a lot of people thinking is what does an effective content aggregator platform look like?

  1. Single bill
  2. Single sign-in/authentication
  3. Integrated content library
  4. Universal search
  5. Consistent customer experience
  6. An excellent recommendation engine
  7. Buy-in from majority of content owners/creators

However, just because it is easy to set out the conditions for an excellent content aggregator platform, doesn’t mean it will a simple task to figure out. The final point, getting the buy-in from the content owner/creator ecosystem, is where anyone with such grand ambitions will find the biggest issue.

The best effort we have seen so far is Sky in the UK. Why? Because it has somehow managed to convince Netflix to let its content be hosted on the Sky discovery platform not its own.

Some might suggest a disproportionate amount of news in the content world is focused on Netflix, but there is good reason for that; Netflix is the best. Few can compete with the current depth and breath of content, the user experience, marketing clout and foresight of Reed Hastings and his team.

Without Netflix on an aggregator platform, there does seem to be a big hole. One of the issues is Netflix does not like handing across the experience associated with its assets to partners. It knows how to keep its subscribers happy so why would it allow a partner to potentially tarnish this reputation.

This is what has made the Sky partnership all the more impressive. Netflix has allowed its assets to be hosted alongside Sky’s on Sky’s discovery platform, marrying two of the best content libraries available to UK consumers in the same place. This is the sort of partnership which ticks all the criteria listed above.

Sky has made an excellent start on the aggregator model, but it needs to continue to add new partnerships, increasing the depth and breadth of its content library to ensure it continues to dominate the premium TV space. Amazon Prime should be a key target.

An interesting development over the next couple of months will be the impact of Disney’s streaming proposition. It will put a dent into Netflix, but how much remains to be seen. Disney does not have the depth or breadth of content Netflix is able to offer, the ‘originals’ and the newly generated local content around the world take it to another level, though Disney will be an excellent partner to have.

We do not want to decide on the Apple streaming proposition until we have had a chance to actually see it but losing Netflix as a potential partner is a significant dent. However, as long as gathers the buy-in from enough partners, creating a proposition which ticks all the criteria we have listed, there is hope for Apple is the services arena.

Qualcomm lands roundhouse in Apple legal battle

The on-going legal battle between Qualcomm and Apple has taken a twist as the US District Court for the Southern District of California has ruled in favour of Qualcomm.

The court has decided Apple’s iPhone 7, 7 Plus, 8, 8 Plus and X infringe two Qualcomm patents, while the iPhone 8, 8 Plus and X devices infringe on a third. As a result, the jury has awarded Qualcomm $31 million in damages.

“Today’s unanimous jury verdict is the latest victory in our worldwide patent litigation directed at holding Apple accountable for using our valuable technologies without paying for them,” said Don Rosenberg, General Counsel for Qualcomm.

“The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly. The three patents found to be infringed in this case represent just a small fraction of Qualcomm’s valuable portfolio of tens of thousands of patents. We are gratified that courts all over the world are rejecting Apple’s strategy of refusing to pay for the use of our IP.”

The three patents support different functions on iPhones, all of which has become normalised features of the devices. Patent No. 8,838,949 enables ‘flashless booting’, removing the need for a separate flash memory and allowing smartphones to connect to the internet quicker after being turned on. Patent No. 9,535,490 speeds up internet connections. Finally, Patent No. 8,633,936 enables high performance and rich visual graphics for games, while also increasing battery efficiency.

The $31 million bill will actually mean very little to Apple. Looking at the iLeader’s 2018 full year results, it would take just under 62 minutes Apple to generate revenues to cover the $31 million, though it does set precedent around the world.

Alongside this ruling in San Diego, courts in China and Germany has also ruled Apple has infringed Qualcomm patents, questioning whether Apple is legally allowed to continue sales not only in these countries, but other territories around the world. In Germany, Apple has been barred from selling any iPhone 7 and 8 models, while in China all devices from the iPhone 6 to the iPhone X have also been banned from sale.

The legal battle between two of the digital economy’s heavyweights has been dragging on for some time now, but this round has been undeniably chalked up to Qualcomm.

Apple issues weak response to Spotify’s claims of discrimination

Apple has presented its side of the dispute with Spotify, claiming it is treating the latter the same as other apps and it is reasonable to charge 30% of premium payment to apps.

Shortly after Spotify filed a claim at the EU against Apple for being discriminated by the latter’s App Store rules and practices, Apple released a statement to deny these claims and throw the accusations back at Spotify.

Apple argued for the 30% charge of premium paid to apps on App Store platform with a few justifications. “Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions,” the statement said. Apple also hastened to add that Spotify has left out policy that the revenue share will drop to 15% from the second year on.

On Spotify’s argument that Apple has restricted payment methods to Apple’s own payment system only, Apple retorted that it demands all “digital goods and services that are purchased inside the app using our secure in-app purchase system”.

There are a few layers in the reading of the attrition when each side is only talking its own side’s truth, but there are also bigger questions related to the whole digital economy. There are minor inconsistencies in Apple’s statement, for example it claimed that Spotify has made “substantial revenue that they draw from the App Store’s customers”, only to contradict a few lines below by playing down the App Store’s significance by saying “only a tiny fraction of their subscriptions fall (sic.) under Apple’s revenue-sharing model.” And there is no need for Apple to use the dubious accusation that Spotify is suing music creators. They (Spotify, Google, Pandora, Amazon) are not. They are appealing to overturn a court decision to increase royalty payment by 44%.

There is as much left unsaid as said. For example, Apple failed to address Spotify’s concern that Apple is both operating a platform and distributing its own competing products, in this case Apple Music. This was a point brought up in a conversation The Verge had with Sen. Elizabeth Warren, who did not include in her first list of companies to “break up”. “It’s got to be one or the other,” Warren told The Verge referring to Apple. “Either they run the platform or they play in the store. They don’t get to do both at the same time.” This resonates with Spotify’s accusation that Apple is being both the referee and a player.

It also does not give out the reason why Spotify, or any apps, should not have the option to handle payments within the app with equally safe payment system (e.g. credit cards).

Then there is the broader question whether app stores should be allowed to collect a commission fee for apps distributed on its platform. Technically Apple, and other applications stores like Google’s Play Store, could argue that they are a distribution channel and a retail outlet. Like other channels and retailers, they must charge a fee to sell the products. This side of the business would not be so significant for Apple earlier, as it was mainly using the app ecosystem to sell, and lock consumers in, iPhones. It is getting more meaning for the company now that the iPhone sales are slowing down while “Services” has become a meaningful part of the business. That is also a key reason why both Apple and Google are actively encouraging apps to move to subscription model to generate recurring income for the platforms.

But there has never been any justification why the fee should be as high as 30%, and Apple and Google have been well synchronised with their charge level (as well as dropping the fee from second year onward to 15%). This has become a significant additional cost for the app developers. Some with deeper pockets could absorb the cost and keep the retail price similar to other platforms (e.g. The Economist magazine). Those businesses operating on low margin or on a loss have to move the additional cost to users who opt to pay for the premium inside the app (e.g. Spotify). Other businesses simply choose to disable the option to upgrade to premium inside their iOS app to avoid the fee (e.g. the Financial Times newspaper).

Apple used Spotify’s partnerships with carriers as a supporting argument for the charge, saying “a significant portion of Spotify’s customers come through partnerships with mobile carriers. (This) requires Spotify to pay a similar distribution fee to retailers and carriers.” This may or may not true as each carrier deal with OTT services is different. Even if this is accurate, mobile carriers most likely are following the Apple’s and Google’s benchmark rather than the other way round.

Spotify accuses Apple of discriminating against it in the App Store

Music streaming service Spotify has declared war on Apple over alleged discriminatory treatment of its app and commercial terms.

In a blog post CEO Daniel Ek announced Spotify has filed a complaint against Apple with the European Commission. He claims “Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience – essentially acting as both a player and referee to deliberately disadvantage other app developers.”

The main issue seems to be the commercial terms Apple offers Spotify, specifically taking a cut of the fees people pay for its premium services. While this is Apple’s prerogative, that behaviour is complicated by the fact that Apple operates its own competing streaming service, Apple Music, and allegedly punishes Spotify if it attempts to use an alternative payment system.

“We aren’t seeking special treatment,” wrote Ek. “We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren’t subject to the Apple tax and therefore don’t have the same restrictions. What we are asking for is the following:

  • First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions—including Apple Music.
  • Second, consumers should have a real choice of payment systems, and not be “locked in” or forced to use systems with discriminatory tariffs such as Apple’s.
  • Finally, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.”

Spotify’s timing is pretty good, since regulatory and political sentiment is quite hostile to US tech giants at the moment and Apple is expected to launch a TV streaming service later this month. Spotify has created an emotively-named website – timetoplayfair.com – to further detail its case. Apple will presumably insist rules are rules, but the case against it seems reasonably strong it’s quite possible it y eventually back down on this one.

 

Almost half of UK value streaming video over pay TV

A report by EY showed 44% of UK households think they get better value from streaming services than from any pay TV operators.

This is one of the key findings from “Zooming in on household viewing habits”, a follow-up deep-dive on the annual survey EY conducted last September, which covered 2,500 UK families. This message from the UK consumers was also corroborated by a separate, US-focused research by Deloitte, where nearly half of all pay TV subscribers said they were dissatisfied with their service, and 70% felt they were getting too little value for their money.

One of the key themes coming out of the deep-dive into the UK family’s media consumption habits is the ascendency of the consumption of content over the Internet, at the expense of pay TVs. Despite that cord-cutting has not yet hit the UK hard, 54% of all families are already spending more time on the Internet than in front of the traditional TV, including two-thirds of young users primarily watch content on streaming platforms.

“It’s no surprise the UK is becoming a nation of streamers, but our research shows just how enthusiastically households have embraced it. Over the next 12-18 months we will see the launch of new streaming services to further sate the UK’s appetite for content,” said Martyn Whistler, Global Lead Media and Entertainment Analyst at EY. “However, reports of the demise of traditional TV seem a little premature. Our research shows their popularity is undiminished, with viewers watching them more now than in previous years.”

Although this could spell even more bad news for the pay TV operators, when the consumers do watch broadcast TV, 51% of households mainly just watch the five traditional “free” channels (if you did not count the £150 TV licence as “pay”), up from 46% in 2017.

In general consumers are much more tolerant towards pay TV carrying ads than streaming services do. But, still, more consumers are also willing to pay for the content they like. For example, Netflix ranked number one on the table of apps by consumer spending, according to App Annie. And the Deloitte report showed that in the US, a consumer would subscribe to up to three on-demand streaming services at the same time. The willingness to pay has even extended to catch-up watching, especially to get rid of the ads, according to the report. 18% surveyed would be happy to pay more to stream ad-free catch-up TV, up from 16% in 2017.

Another trends that stood out in the report is the diversification of content consumption platforms and its problems. A third families stream video on multiple screens, while 62% of the 18-24-year olds do so. Meanwhile, a quarter of all households have found it hard to track the availability of their favourite content across different services, apps and platforms. This number went up to 39% among the 18-24-year olds, which should be more tech-savvy.

These trends combined can have some implications for how content is produced, distributed, and monetised. For example, if consumers will most likely binge watch content on streaming services (e.g. the average Netflix user would stream two hours a day), the idea of “episode”, which has worked on broadcast TV, will be less relevant. Or should a long series be released all at once on a streaming platform, or making it available episode by episode as the conventional TV broadcasting does? How should pay TV services improve not only its users’ account management, but also the content’s ID management, to provide more pleasant experience for cross-platform and cross-device users?

As Praveen Shankar, EY’s Head of Technology, Media and Telecommunications for the UK & Ireland, put it: “Our survey demonstrates that audiences are struggling to keep track of their favourite content across various platforms and they are confused by the choices available to them. Technology, Media and Telecoms (TMT) companies need to move away from programme guides and big budget marketing and build artificial intelligence (AI) enabled recommendation engines to push content. This will improve user experience, reduce costs and maximise assets.”

On-demand video streaming has surely gained more impetus again in the last few days. CanalPlus has just launched its own streaming service Canal+ Séries, and Apple is widely expected to unveil a version of video on-demand service on 25 March at an event on its own campus.

Reports of Google China’s death are greatly exaggerated

Google engineers have found that the search giant has continued with its work on the controversial search engine customised for China.

It looks that our conclusion that Google has “terminated” its China project may have been premature. After the management bowed to pressure from both inside and outside of the company to stop the customised search engine for China, codenamed “Dragonfly”, some engineers have told The Intercept that they have seen new codes being added to the products meant for this project.

Despite that the engineers on Dragonfly have been promised to be reassigned to other tasks, and many of them are, Google engineers said they noticed around 100 engineers are still under the cost centre created for the Dragonfly project. Moreover, about 500 changes were made to the code repositories in December, and over 400 changes between January and February of this year. The codes have been developed for the mobile search apps that would be launched for Android and iOS users in China.

There is the possibility that these may be residuals from the suspended project. One source told The Intercept that the code changes could possibly be attributed to employees who have continued this year to wrap up aspects of the work they were doing to develop the Chinese search platform. But it is also worth noting that the Google leadership never formally rang the dead knell of Dragonfly.

The project, first surfaced last November, has angered quite a few Google employees that they voiced their concern to the management. This was also a focal point of Sundar Pichai’s Congressional testimony in December. At that time, multiple Congress members questioned Pichai on this point, including Sheila Jackson Lee (D-TX), Tom Marino (R-PA), David Cicilline (D-RI), Andy Biggs (R-AZ), and Keith Rothfus (R-PA), according to the transcript. Pichai’s answers were carefully worded, when he repeated stated “right now there are no plans for us to launch a search product in China”. When challenged by Tom Marino, the Congressman from Pennsylvania, on the company’s future plan for China, Pichai dodged the question by saying “I’m happy to consult back and be transparent should we plan something there.”

On learning that Google has not entirely killed off Dragonfly, Anna Bacciarelli of Amnesty International told The Intercept, “it’s not only failing on its human rights responsibilities but ignoring the hundreds of Google employees, more than 70 human rights organizations, and hundreds of thousands of campaign supporters around the world who have all called on the company to respect human rights and drop Dragonfly.”

While Sergei Brin, who was behind Google’s decision to pull out of China in 2010, was ready to stand up to censorship and dictatorship, which he had known too well from his childhood in the former Soviet Union, Pichai has adopted a more mercantile approach towards questionable markets since he took over the helm at Google in 2015. In a more recent case, Google (and Apple) has refused to take down the app Absher from their app stores in Saudi Arabia, with Goolge claiming that the app does not violate its policies. The app allows men to control where women travel and offers alerts if and when they leave the country.

This has clearly irritated the lawmakers. 14 House members wrote to Tim Cook and Sundar Pichai, “Twenty first century innovations should not perpetuate sixteenth century tyranny. Keeping this application in your stores allows your companies and your American employees to be accomplices in the oppression of Saudi Arabian women and migrant workers.”

Apple will struggle with 5G for years – analyst

Not only will Apple lag its competitors by at least a year in launching a 5G phone, it might still suck anyway according to a semiconductor analyst.

Bloomberg apparently got hold of a research note from Matthew Ramsay, who heads up the TMT semiconductor business at Cowen. He seems to reckon Apple has boxed itself into a corner by ditching Qualcomm as a 5G modem supplier and is now seriously short of good options in that area. He also expressed surprised that Apple has allowed this situation to develop.

Ramsay detailed four main options for Apple for 5G, but he doesn’t think any of them are great. The first is what is generally assumed: that Apple will launch 18 months behind the competition with an Intel 5G modem that is expected to be inferior and not even support mmWave. The recent MWC show saw the first 5G phones launched but Apple tends to announce new iPhones in September, hence the big lag.

Rubbish option number two is to see if anyone else can help Apple out on the modem side of things. But Huawei is off the table due to all the aggro it’s getting from the US and Samsung would be likely to ruthlessly exploit its overwhelmingly strong bargaining position, since it’s another of the long list of companies Apple is on frosty terms with. Other than that there’s Taiwanese MediaTek, but Ramsay seems to think it’s even further behind than Intel.

A third, highly implausible, option would be for Apple and Qualcomm to kiss and make up. Not only does there seem to have been too many things said that can’t be unsaid in their bitter legal dispute, but that would be an utter humiliation for Apple and surely Qualcomm wouldn’t be able to resist imposing punitive terms. Having said that, sometimes pragmatism and enlightened self-interest prevail, but we would be amazed if they did in this case.

The last option would be for Apple to buy Intel’s modem business from it in order to accelerate the development process. This would be expensive but Apple can certainly afford it. There is, however, no guarantee Apple would improve on Intel’s efforts since modems are hardly a core competence. It’s even less likely that Apple would be able to make a material improvement in the next year or two.

A fifth option not posited by Ramsay would be for an even longer delay in bringing a 5G phone to market. Apple is brilliant at marketing and could easily throw resources at belittling 5G in the short term to downplay the significance of its absence from that market. That argument would certainly find some sympathy from us in the short term, but it would surely start to wear thin before long.

USB4 specification unveiled, featuring Intel Thunderbolt 3

The next generation USB standard will be based on Intel’s Thunderbolt protocols, as well as be backward compatible with earlier generations of USB.

Intel earlier announced that its upcoming 10nm processor will be the first to integrate Thunderbolt 3, and it has already been supported by both Windows 10 and macOS. According to the latest announcements from both Intel and the industry association and standardisation body USB Promoter Group, Intel has made the Thunderbolt 3 specifications available for royalty free use by the industry.

“Releasing the Thunderbolt protocol specification is a significant milestone for making today’s simplest and most versatile port available to everyone,” said Jason Ziller, General Manager, Client Connectivity Division at Intel. “By collaborating with the USB Promoter Group, we’re opening the doors for innovation across a wide range of devices and increasing compatibility to deliver better experiences to consumers.”

The USB community is obviously happy to see that the move from Intel will likely avoid the branching of the next generation USB standards. “The primary goal of USB is to deliver the best user experience combining data, display and power delivery over a user-friendly and robust cable and connector solution,” said Brad Saunders, USB Promoter Group Chairman.

The key advantages of USB 4 include:

  • High speed: up to 40 Gbps operation, which will double the 20 Gbps speed of USB 3.2 and Thunderbolt 2, or more than 80 times faster than the USB 2.0 speed of 480 Mbps;
  • Multi-channel data communication: enabling multiple simultaneous data and display protocols
  • Backward compatibility: USB4 will be compatible with USB 3.2, USB 2.0, and Thunderbolt 3

“The USB 4 solution specifically tailors bus operation to further enhance this experience by optimizing the blend of data and display over a single connection and enabling the further doubling of performance,” added USB Promoter Group’s Saunders.

After making the Thunderbolt specs public, Intel’s role will expand to industry wide testing, auditing and certification.

The USB4 interface is likely to continue with the USB Type-C standard, which will save more real estate for computer OEMs, if they can replace most of the legacy ports. When it comes to mobile devices, the co-existence of different standards of USB connections for charging and for data transmission has been a source of consumer frustration as well as a key contributor to electronics wastes. Apple has also been notorious for going its own way with cable standards, though recently there has been rumour that the next iPhone might ditch Lightning for USB Type-C connection.

The USB4 specifications will be published around mid-2019, according to the USB Promoter Group announcement.

Apple and Goldman Sachs may soon issue a credit card together

The Wall Street Journal reports that the iPhone maker from Silicon Valley and the Wall Street stalwart are mulling over the idea of jointly issuing a credit card to Apple users.

Quoting people familiar with the situation, the paper claimed that Apple and Goldman Sachs may start a trial of the card on their own staff in the coming weeks before it is launched later in the spring. A similar partnership was earlier reported in May 2018 by the same paper.

If this does happen, it will not be the first time Apple takes part in card issuing. The company has already partnered Barclays to issue Barclaycard with Apple Rewards, by which users can earn points from purchases made at Apple or elsewhere, which can then be converted to Apple Stores or iTunes Store coupons.

Nor is Apple the only internet company to issue bank cards. Amazon, for example, has partnered with multiple banks (including RBS and NatWest in the UK) to issue different kinds of credit, debit, cash-back and other types of cards with different benefits.

Where the Goldman Sacks card will be different, according to the WSJ article, is its tighter integration with features offered by the Apple Wallet app on the iPhone and the iPod Touch.

By now, users of Apple Wallet can store in the app “credit, debit, and prepaid cards, store cards, boarding passes, movie tickets, coupons, rewards cards, student ID cards” etc. Then users can use “passes on your iPhone to check in for flights, get and redeem rewards, get in to movies, or redeem coupons. Passes can include useful information like the balance on your coffee card, your coupon’s expiration date, your seat number for a concert”, and so on.

The speculated card is said to work with these Wallet functions as well as with upcoming features. For example, Wallet may keep spending limits, track rewards, encourage users to pay down their credit card debt, and manage balances. These will not be fundamentally new ideas. Apple Watch is already attempting to improve the user’s physical wellness, and the recent update on iOS has added notification of user’s screen time.

This may bring addition benefit to Apple, at a time when its Products business is slowing down while Services is growing to be more important. As a concrete example, Apple could get higher commission fee from transactions on its own cards then on those made through Apple Pay linked to cards issued by other institutions.

For Goldman Sachs, on the other hand, the main driver would be the iOS users. Traditionally an investment and wholesale bank, Goldman Sachs only recently opened an online retail banking business in the shape of Marcus by Goldman Sachs. A joint credit card would be a good channel to access the iPhone users, which are believed to be higher spenders among smartphone users. Eventually, WSJ claimed, the card may expand to offer personal loans, wealth management services, and other financial products, which would be closer to Goldman Sachs’ heart.

Apple expected to launch half-baked streaming platform

Rumours are swirling around the Apple content business once again, this time pinning an April launch date on a streaming product which would offer third-party bundles in-app.

The aggregator platform for content is one which is becoming increasingly popular as the industry starts to realise how difficult it is to be a content creator. Apple has tried over the years, with only a sprinkling of success, but it seems it is hedging this new position by bundling other premium subscription services into the same content platform.

According to CNBC, Apple will create a video content platform to host its own content, which will be free to those who own Apple devices and offer the option for users to tie in premium subscriptions from third-parties. This sounds like an excellent idea, the fragmentation of content across different platforms is a frustration for users, though the absence of some might be a significant stumbling block.

As it stands, Apple has been unable to negotiate a relationship with HBO, though this is still a possibility, while the report also claims Hulu and Netflix will not be on the platform. For such an idea, and it is a good one which will appeal to consumers, all the various options need to be available. As it stands, with some of the most popular streaming services absent the appeal of the platform is severely dented.

“Any move is long overdue and comes at a challenging time for any new player,” said independent analyst Paolo Pescatore. “We’ve seen an explosion in OTT SVOD services.

“For the service to be successful it will need stand heads and shoulders over rivals, great content, great UX, a one stop shop destination. Unfortunately the market is hugely fragmented and consumers do not want to sign up to numerous services. There is an opportunity to unite all of these services. Whoever gets this right will be in pole position. If Apple has serious aspirations to compete in this landscape it needs to make a significant acquisition.”

But what could be the issue? Rumours are pointing towards the terms and conditions set forward by Apple; they might be asking for too much.

Looking at the App Store, Apple has traditionally asked for a 30% slice of any subscriptions bought through the platform, a number which decreases to 15% in the second year. It also demands 30% of in-app purchases, leading some developers to take users off-app to complete any transactions, creating a loophole in the terms and conditions. It seems these terms ate being extended to the aggregator platform and might be the reason Apple is finding difficulty in negotiating with partners.

Anonymous sources quoted by CNBC are suggesting HBO is resisting so far as Amazon Prime offered better terms than Apple. Sticking to its guns might sound like an attractive move to the management team and investors, but unless Apple gets a decent level of premium content on the platform to supplement its own mediocre library the platform will not be a success.

“Apple’s strength has always been seamless integration between hardware, software, services and now, presumably, content,” said Ed Barton, Chief Analyst at Ovum. “It has a lot of strengths to leverage in launching a video service. It’s problem is launching a video service in 2019 is about as hard as it has ever been, the competition is insanely strong and very well established in audience viewing habits.

“More well funded competitors are launching this year and making enough shows to attract and retain audiences is getting harder and more expensive. I don’t doubt Apple can launch a great video service, whether apple can sustain a great video service over the longer term in the brutally competitive environment for premium video is the question.”

Another strand of the software and services push will take Apple into the world of magazine subscriptions. Similar to the plans above, premium magazine subscriptions will be offered to users through the iOS news app, though considering the strife traditional content providers are in, Apple might be able to throw its weight around a bit more.

This is perhaps the problem Apple is facing; it thinks it is more powerful and influential than it actually is. Of course, Apple is one of the most respected and dominant brands on the planet when it comes to consumer hardware, though the software world is a completely different dynamic. It cannot bully companies like Hulu, Netflix and HBO into its own terms and conditions, as these are companies which are successful in the content world in their own right. Apple is trying to break into a new space, not necessarily the other way around.

That said, Apple does have a very strong relationship with its hordes of loyal customers. It can add value to any business it partners with, but perhaps it needs to realise it is only one hand amongst hundreds which is trying to lure customers onto its platform. What is clear right now, is that without enough headline grabbing content on the platform, the idea will certainly fall flat.