Apple TV Plus is here to fight for prestige

Apple TV Plus is only a few days away from launch, and we are excited to see the service. The new Apple product is set to start operating on November 1st, with nine original shows and movies. After launch, five new titles will be added to the list. But if you are anxious, don’t worry. The company will release its titles in theaters weeks before they hit the platform. Just like that, Apple can offer something Netflix, Hulu, or even HBO can’t—traditional prestige.  

Although the Apple TV Plus platform has been in the works for a while, it was only in September when the company revealed some of the service’s details. First, Apple TV Plus offers the most competitive price in the market right now—for only $5, users can access the full range of Apple titles with a seven-day free trial. There is an exception: if the user buys an Apple gadget, he/she will get a free subscription for the first year. It sounds like a treat (and a marketing strategy that will capture dozens of Apple users.) Like HBO, Amazon, and Netflix, the platform won’t have ads. Second, Apple TV Plus has a reported budget of $6 billion, the support of one of the largest Silicon Valley companies, and the savviness that comes from owning the data of millions of people. Just as a comparison, Apple has over $66 billion in cash versus $3.7 billion of Netflix and $4 billion of Disney.

 Apple appears to have a different strategy in terms of production and content. The Cupertino-based company wants to win at theaters, and fight for the Oscars, the traditional Hollywood success standards. Apple plans to distribute its documentaries and movies through boutique theaters 12 weeks before the online release and perhaps with a broader distribution in the future. Netflix’s strategy is different: it’s geared towards producing a lot of content, mainly quality series versus feature movies, and delivering it to its 139 million subscribers. Its focus is the audience, making it easier for users to access it, pay for it and watch it.

 

Apple seems to be aiming for the “traditional” route. Instead of focusing on reaching a wide variety of subscribers, the service may prioritize the theaters, the releases, and with that, the possibility of getting Hollywood awards. For now, as Variety reports, mega-chains like AMC and Regal are not distributing the films, although, through them, Apple could access a larger pool of viewers. With the awards comes the prestige, and then, the talent—it will be easier to get the best directors, producers, and actors. Apple is not releasing its films in theaters because of the number of people that go to the movies. The number in itself is insufficient—in 2015, a CBS News poll revealed that while 84% of Americans watch videos at home, only 4% say they go to movie theaters. Apple TV Plus is looking for something else. As part of the Apple brand, its product will be the same as the iPhone and MacBooks. They are not ordinary objects or platforms; they are exclusive, unique; they make the user different, special, elite. That’s what Apple sells, and that’s what they will sell through Apple TV Plus.

The strategy, at the very least, sounds different from that of other streaming platforms. We have yet to see how this strategy will play out. For the moment, Apple will release three films before the year ends. The documentary The Elephant Queen, directed and written by documentary cinematographer Mark Deeble, on October 18th; Hala, with actor Gabriel Luna from Marvel’s Agents of S.H.I.E.L.D., on November 22nd, and The Banker, starring Samuel L. Jackson, on December 6th. They will all be available on the platform a few weeks after their release, and they are all Oscar-quality pictures. 

As we wrote in August (read Netflix, no longer the streaming leader in the US,) Netflix has started losing its clout within the streaming services. The market is overcrowded, and users don’t want to pay more than a couple of subscriptions. Indeed, the entrance of Apple may not impact Netflix directly—they are going for different kinds of consumers. Apple is for boutique users, those that go to the movies, that watch the Oscars and love high-quality pictures. Netflix is for everyone else. However, with Hulu, Amazon, and HBO already established, and Disney+ about to launch its own service, Netflix needs to beware. Producing quality content is still the key to remain king. The problem is, Apple knows how to do that and has a vast market penetration. According to Statista, 45.2% of smartphone users in the United States use an iPhone device. Apple is different. They know the market, and they will compete for it.

 

When launching November 1st, Apple TV Plus will not endanger Netflix. Its audience, content, and overall strategy are different. But eventually, it might. Netflix must start figuring a way to get more Oscars like the one for the movie Roma and retain great directors, like Martin Scorsese and his Netflix movie The Irishman. (Both of these movies were briefly released in theaters.) We may ignore it, but prestige matters. For Hollywood professionals, awards are more (or as) relevant than tickets sold.

As Frank Bennack, executive vice-chairman of Hearst Corporation, said in a presentation at IESE in New York: “Content is king, but distribution is King Kong.” For now, Netflix is the King Kong of distribution as it connects directly with the user, and it does have the content (although others compete for it.) However, Apple, that also knows the user very well, holds their credit cards, and has a much deeper war chest, may end up winning both.

 

Watch Tim Cook in this video explaining Apple TV Plus in March 2019: