Netflix with Fruit. Apple Goes OTT?

Posted by Miles Weaver

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A recent article in the Wall St Journal infers that Apple is getting still closer to moving forward with its rumored OTT service this year. The service will allegedly feature ABC, CBS and Fox, as well as select other cable channel like ESPN and FX for between $30-$40 per month, and it would be available across the Apple ecosystem.

Let me say categorically that I’m extremely sceptical about this. The Apple games console? Never happened. The Apple TV set?  We’ve been talking about that for half a decade, and despite Apple having hired prominent executives from TV hardware companies, nothing has come of it. Frankly, as with all things Apple, I’ll believe it when I see it. At the moment, Apple has nothing in the vein of subscriptions, and offering OTT could cannibalise parts of the iTunes market. Again, that’s not to say it isn’t happening – we’re pretty sure they’re moving forward with repurposing the Beats subscription service into a likely iTunes subscription, but TV is a different beast; Apple isn’t as dominant in video as hey once were in music.

Also weighing against validity of the rumour is the content line-up they have. CBS have just launched their own OTT subscription, why damage that by giving Apple a cut? Also, $30-$40 per month is massively in excess of what anyone else is charging for such a service. So much so that, given the content they’re offering, I couldn’t see why anyone would go for it. Add in the mix that they’d be missing all the NBCU content, $30 looks hard to swallow.

If these rumours are true, it looks to me like Apple has another Ping on its hands – a service that they think can buck long established trends just because it’s Apple. This time they would not only be delivering a substandard service though, they’d be costing users money to get in on it. That’s a bad deal for users and could be damaging to Apple’s recently resurgent brand.

This isn’t to say that Apple couldn’t have a game changing effect on the OTT space though. Should Apple choose to build its own Netflix equivalent, they would likely be doing so into a media browser that is already the established centre for entertainment in the minds of millions of users. The iTunes brand would be immensely powerful in gaining acceptance of the new service, and Apple’s deepest of pockets could crush Netflix whenever they wanted to when it came to purchasing rights to content.

Of course, I’m missing one key detail out of all of this, and that’s HBO. HBO Now, as a standalone service, is going to be exclusive to Apple for a limited time. It would be surprising if a similarly mutually agreeable deal had been struck if Apple are actually thinking of going into the OTT space. While $40 for 25 channels is not a particularly good deal, if one of them were HBO, then the offering becomes decidedly more appealing.

I’m still taking all this with the pinch of salt though. The rumor mill around Apple is one of the most powerful and persuasive in the world, and we’ve been strung along so many times with talk of TVs and set top boxes and consoles that it’s hard to even consider getting one’s hopes up only for them to never be met.

Also, Apple’s track record of brilliant launches is largely for hardware (and even that was seriously damaged by the rather bleak 4S-5S wilderness years), they have not been so successful with software – iTunes, even now, looks dated when compared to almost any other music service, the Apple TV UI is still under-loved and miserably designed, while the less said about Apple Maps the better. They can often create genius, but when trying to crack an established space, Apple is far from a sure-fire bet.

 

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Miles Weaver PikselMiles Weaver is Piksel’s Innovation Lead, overseeing the strategy, development and management of concepts stemming from Piksel’s Innovation Programme. Miles is an avid commentator on the digital TV revolution speaking regularly at industry events and being published in The Guardian and Read/Write. Connect with him at @MrMilesWeaver

 

 
 
 
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Topics: Insights, Netflix, Apple, OTT, News, Apple TV