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.