[ad_1]
Apple (AAPL) is pushing to transform its service businesses into a $ 50 billion revenue stream that could lead to interesting twists.
On Wednesday, The Information reported that Apple is considering launching a unique subscription offering that would encompass its original TV shows, music service and magazine articles. "No details were given on the amount charged by Apple for such a service, but it would not be surprising to see that it costs more than the $ 10 per month currently charged for the individual plan. Apple Music
. Reported that "Apple" is targeting somewhere between March 2019 and the summer of this year to roll out its list of new programs "it is possible that a bouquet "Subscription to the music / video / magazine arrives in about a year."
A fundamental reason why Apple would choose to launch such a bundle: It is far from clear at this point that "it's a good thing." a standalone subscription for the company's original shows and films would be a large-scale success, especially in the short term.Although the list of upcoming originals of Apple does not include the productions of 39, Oprah, Jennifer Aniston and Mr. Night Shyamalan, as well as a production of the creators of S esame Street Sesame Workshop, the size of the 2019 video services library of Apple will probably be pale compared to what Netflix (NFLX) Amazon.com (AMZN) and Hulu are able to offer their subscribers.
On the other hand, the bundling of video content with Apple Music – perhaps for a small premium at current Apple Music prices – would give Apple a valuable way to differentiate its music service compared to Spotify (SPOT) which currently has more than 75 million subscribers to the 40 million Apple Music, as well as smaller rivals that bundle video offerings YouTube's YouTube (GOOGL) service, including The $ 12 per month Premium YouTube service, allows you to watch originals and view ad-free videos on YouTube, or discount their Music Services (Amazon, which charges only $ 79 a year or $ 6.58 a month to Prime members for its Music Unlimited service)
Magazines could also help a little, according to Apple's selection. , it should be noted, includes both books and mags Azines in his library Prime Reading, which comes with regular premium subscriptions.
Long before The Information Report was published, at least some people argued that Apple should deploy more comprehensive subscription services for its giant installed base. However, the subscription plans that they often envisioned were not limited to content, but also covered non-content material and / or services.
In May, Matthew Ball, the former strategy director of Amazon Studios, pleaded the launch of subscription services that could cover not only music and video content, but also d & # 39; Other services such as iCloud storage and AppleCare support, as well as the right to upgrade to a new version of one or more devices following the passage of a given time (for example, an upgrade). level of the iPhone every two years).
"This model offers benefits in all of Apple's business," Ball said. "The adoption and use of the services would probably increase … just like the device retention rates (the cost of switching to a competing device increases and you no longer undergo the decision-making process." purchase of a new device). would also facilitate the addition of additional iOS devices to an iOS home … and prevent homes "for most Apple" to use one or two devices from the company's competitors.
The launch of such subscription plans would also align with a general consumer and business trend – a trend that spans everything from content to software to hardware and transportation. – to the substitution of the physical property for subscription or pay-as-you-go services. And it should be noted here that in industries where this trend actually really took off, such as music and business software, it served to increase the total amount of revenue generated by the company. ;industry.
Tim Cook said In early 2017, Apple, which had a business turnover of $ 25.8 billion in 2016, wanted to double its sales in Services by 2020 Through the App Store, Apple Music and (to a lesser extent) iCloud's business growth As well as rising revenue-sharing revenue from ads research Google, Apple has already made good progress towards this goal. The service business figure reached $ 30 billion in 2017 (completed in September 2017) and the consensus is to increase to $ 36.8 billion for fiscal year 2018.
The launch of A more comprehensive content subscription service in 2019 services are pushing a fresh shot into the arm. And creating subscription plans that couple services with hardware upgrades would do a lot more.
The latter of course would serve to cannibalize some of the traditional hardware sales of Apple, and would cause a shortfall in the short-term hardware sales are replaced by monthly subscription payments. However, if this transition ends up resembling that of Microsoft and Adobe, Apple's investors will not complain about the long-term effects of the move.
[ad_2]
Source link
