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 With appearances by Oprah Winfrey and Steven Spielberg, the
world's second-most valuable technology company lifted the
curtain on a television and movie subscription service called
Apple TV+ that will stream original television shows and movies.
The star-studded lineup failed to excite investors, who sent
Apple shares down 1.2 percent.
The company's long-expected plunge into the streaming video war
is years behind leaders Netflix Inc and Amazon.com Inc. Apple
left out key details such as pricing, making it difficult to
judge how its service will stack up against competitors.
"While Apple may introduce a bigger roster of original content
than Amazon and Netflix during their respective launches, the
streaming market has arguably already reached a level of
saturation and consumer fatigue in the United States," said
Colin Gillis, an analyst at Chatham Road Partners.
The programming will come through a revamped television-watching
app for users of Apple's 1.4 billion gadgets worldwide, as well
as owners of smart TVs and other devices.
Apple is taking a different approach by offering paid "channels"
from AT&T Inc's HBO, Lions Gate Entertainment's Starz and CBS
Corp's Showtime, alongside its own content.
Its revamped app for subscribing to channels from others will
come out in May, but Apple's own original shows will not arrive
until autumn, with pricing not yet announced. Apple said both
its TV+ shows and the new version of the TV app will be
available in more than 100 countries.
Apple also introduced a credit card, a digital video game
arcade, and added hundreds of magazines to its news app at an
event at its Cupertino, California, headquarters.
The launches come as Apple struggles with falling iPhone sales,
which has prompted the company to turn more of its attention to
services that provide regular subscription revenue.
Hollywood celebrities helped debut the revamped television
offering. Apple has commissioned programming from Jennifer
Aniston, Reese Witherspoon, Winfrey, Spielberg and others.
Winfrey, who announced a global book club and two documentaries,
said she was drawn to Apple in part by its reach. "They're in a
billion pockets, y'all," she said, referring to Apple's
ubiquitous devices.
Alongside its own iPhones, iPads and iMacs, Apple will make the
programming widely available through smart TVs and devices from
Roku Inc and others, departing from the past where it has tended
to keep content exclusively on its own hardware.
PRIVACY TO THE FORE
Throughout the presentation, Apple executives stressed privacy
protections for consumers as they shop and consume content.
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"The most important point for today was advertising and privacy,"
said D.A. Davidson & Co analyst Thomas Forte.
Apple, second only to Microsoft Corp in market value among tech
giants, led off the event with an announcement that its free news
app will now come in a paid-subscription version, called Apple
News+, which curates a range of news articles and will include 300
magazines including National Geographic, People, Popular Science,
Billboard and the New Yorker. Apple said it would cost $9.99 a
month.
Apple then introduced a titanium, laser-etched Apple Card backed by
Goldman Sachs Group Inc and Mastercard Inc that can track spending
across devices and pay daily cash back on purchases. Cook said Apple
Pay will be available in more than 40 countries by the end of the
year.
The company also introduced Apple Arcade, a game subscription
service that will work on phones, tablets and desktop computers and
include games from a range of developers.
Apple said the gaming service will feature more than 100 exclusive
titles from gaming partners such as Annapurna Interactive and that
the service will arrive this autumn.
As with its original content service, Apple did not say how much its
gaming service will cost consumers.
CROWDED FIELD
With its new media push, Apple joins a crowded field where
Amazon.com's Prime Video and Netflix have spent heavily to capture
viewer attention and dollars with award-winning series and films.
Apple's primarily family-friendly content, likely to appeal to young
audiences, also sets the stage for a rivalry with Walt Disney Co.
The big tech war for viewers ignited a consolidation wave among
traditional media companies preparing to join the fray. Disney,
which bought 21st Century Fox, and AT&T, which purchased Time
Warner, plan to launch or test new streaming video services this
year.
Revenue from Apple's services - which include the App Store, iCloud
and content businesses such as Apple Music - grew 24 percent to
$37.1 billion in fiscal 2018. The segment accounted for only about
14 percent of Apple's overall $265.6 billion in revenue, but
investors have pinned their hopes for growth on it.
(Reporting by Stephen Nellis in San Francisco, Lisa Richwine in Los
Angeles and Kenneth Li in New York; Writing by Nick Zieminski;
Editing by Bill Rigby)
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