Apple is not so much building a Netflix killer, as it is building an Amazon-style everything store of content for its 1.4 billion device users. The more content its device users get through Apple, the more it makes in commissions. And the more likely those users are to stay locked into the iOS ecosystem and buy another Apple device, when the time comes.
Apple is spending $US1 billion ($1.4 billion) on original TV shows and movies, including projects from the likes of Steven Spielberg and Oprah Winfrey. But that is dwarfed by Netflix’s $US15 billion content spend, a clear sign Apple has totally different goals.
As interesting as the new shows sound, they appear to be loss leaders designed primarly to get (or keep) Apple device customers using its ‘TV” app. In turn, Apple is positioning the TV app to be a central, curated hub, the main portal through which users access video; some of it Apple’s, most of it from other producers.
That explains why Apple has made the TV app available to owners of smart TVs made by rivals sich as Samsung and Sony – products that make Apple’s own puck shaped set top box (the Apple TV) redundant.
The risk for Apple was iPhone users with these smart TVs, which are increasingly prevalent, could be persuaded to access video through other platforms, such as Amazon. If the new shows Apple is developing are any good – that risk will be diminished.
Tellingly, Netflix is not participating in Apple TV+. It is also no longer selling subscriptions through Apple’s App Store – a protest at the 30 per cent cut Apple takes from all subscription apps sold through the platform.
That is a sign of the dynamics at play here. And in betting that its brand and direct relationship with customers is strong enough to bypass Apple and the commissions it demands, Netflix is not alone.
Apple’s push into subscription news notably did not include the venerable New York Times, which has a cherished brand, and a booming subcription business. It also does not include the storied Washington Post (though a cynic might say that has something to do with it being owned by Jeff Bezos, the Amazon CEO).
The service, which will launch initially in the US, will be magazine-focused, giving consumers access to over 300 titles through a single subscription.
Apple has encountered resistance in the past from content producers including record labels (who didnt want to make individual songs, rather than full albums, available for download on iTunes) and book publishers. It won those battles, but journalism, with its public interest role, is a different beast.
Intruigingly, though, the Wall Street Journal is participating in Apple News+.
That is highly significant, because the Journal is owned by Rupert Murdoch’s News Corp. And News Corp doesn’t tend to enjoy products where its relationship with a customer is intermediated by big tech companies.
If you haven’t noticed, News Corp has been waging war against Facebook and Google around the world. In Australia, as part of an enquiry by the competition regulator into digital platforms impact on media. has called for Google to be broken up.
How this plays out in Australia remains to seen. Talks between Apple and local publishers are expected to ramp up in coming weeks.
Now its ambitions in media are becoming clearer. Apple wants to de-clutter the content landscape for its device users – and earn a lot in commissions from doing so.
The writer travelled to California as a guest of Apple.
John McDuling is a business, media and technology writer for The Sydney Morning Herald and The Age.