"It just feels like it's not a lot of bang for its buck," former ABC Daytime President Brian Frons says
Apple chief Tim Cook grabbed everyone's attention inside the Steve Jobs Theater in Cupertino, California, on Tuesday when he revealed the company's upcoming streaming service, Apple TV+, will cost $4.99 per month.
You could almost see the math calculating in everyone's head, a la Alan in "The Hangover": That's cheaper than Netflix, Hulu, HBO Now, Amazon Prime Video and the soon-to-be-launched Disney+.
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And Apple, always looking for ways to interconnect its products, will offer customers a one-year free trial of the service when they purchase one of several Apple devices.
But is Apple TV+ a good deal or merely relatively affordable compared to its competitors? Early returns are mixed.
"It feels like a niche service when you compare the opening offer to Disney, WarnerMedia or even Hulu," former ABC Daytime President and current UCLA lecturer Brian Frons told TheWrap. "It just feels like it's not a lot of bang for its buck. At the moment, there is no strong (intellectual property) that makes you say 'I have to go sign up for this.'"
The competitive price, according to Ampere Analysis analyst Richard Broughton, reflects Apple's recognition of two key challenges: It's entering a streaming landscape against competitors stacked with content, and it's had a much tougher time convincing iPhone users to upgrade their devices in recent years.
"The price point is very sensible," Ampere Analysis analyst Richard Broughton said. "Apple is moving into an extremely crowded market, with an untested content offer. A low entry price, undercutting other premium (streaming) services, is a sensible move to drive early traction from users not thinking of upgrading devices in the near future and people outside the Apple stable."
There are few details about Apple TV+ original shows. The service plans to debut on Nov. 1 with one documentary film and eight original series, including "The Morning Show," a glitzy drama starring Reese Witherspoon, Steve Carrell and Jennifer Aniston in her return to TV. Cook also offered a preview of "See," Jason Momoa's new show set in a world where the few remaining humans to survive a deadly virus are left blind.
For most of the shows, Apple will release three episodes right when the service launches, then drop additional episodes on a weekly basis moving forward. More of the series previously ordered by Apple will also hit Apple TV+ in the months to follow.
Apple TV+ will sink or swim based on how well these original shows appeal to viewers.
That could be tricky, with "no known content" driving eyeballs to the service, according to Bruce Leichtman, president of Leichtman Research Group. He compared Apple's strategy to other streamers like Netflix and Amazon's Prime Video, which surround their originals shows with a library of well-known shows and movies.
"This allowed originals like 'House of Cards,' 'The Marvelous Mrs. Maisel' and 'The Handmaid's Tale' to gain traction as part of a larger offering," Leichtman explained. "Without the known content in the subscription, sampling of the unknown would have been much slower, no matter how compelling the new shows were."
The lack of proven content will "likely keep Apple TV+ as a niche service for the time being," he added.
On the other hand, Disney+, when it launches in mid-November, will combine a catalog of Disney classics ("Snow White"), modern favorites ("Frozen"), Marvel films ("Black Panther," "Avengers: Endgame) and dozens of Disney and 20th Century Fox-produced TV series ("Boy Meets World," "The Simpsons"); the service also has new offerings like "High School Musical: The Musical: The Series," Jon Favreau's "Star Wars" show, "The Mandalorian" and the live-action "Lady and the Tramp" movie lined up.
Paul Hardart, a former Warner Bros. executive and current head of the Entertainment, Media and Technology Program at NYU, said he was "surprised" at the service's lack of IP. Apple, he pointed out, could have pulled a similar move as Amazon, which paid $250 million for the rights to its "Lord of the Rings" prequel. That's chump change for Apple, which is sitting on more than $200 billion in cash.
"The shows they have look interesting," Hardart said, "but it's not based on some existing IP, which makes it a harder sell to get people to try it."
Moving forward, Apple would be wise to aggressively pursue the rights to hit movies once their theatrical runs end, Hardart said, as a way to augment its content.
Frons went a step further, suggesting Apple made a mistake by not addressing its dearth of content by simply using its cash hoard to acquire a studio. "Until one of those series hits, I think it'll be a slow road to growth," Frons said. "Everybody is going to look at this and say, 'Boy, they could've used more product.' Maybe they should've bought Sony or Lionsgate or something that expands the offer."
Still, Apple TV+ isn't necessarily poised to be the next Newton, its failed digital notepad from the '90s.
For one thing, Apple now has a remarkable 1.4 billion active devices; even having a fraction of the customers who are using those devices check out Apple TV+ would translate to tens of millions of viewers. Apple will also make the service available outside its ecosystem on platforms like Roku and Amazon Fire TV.
Apple is doing its best to appeal and cast a wide net, Hardart said, by betting on bankable, world-famous stars like Aniston and Oprah Winfrey. A handful of kids shows, too, including a series from Sesame Workshop, the creators of "Sesame Street," also fit into this strategy.
Lastly, Apple could eventually look to offer a bundle package that includes other services, such as Apple Music.
All of that combined might not be enough to topple Netflix and its 150 million global subscribers, or even compete with Disney+.
But if Apple can get a healthy amount of its true believers to pay for yet another subscription, it'll be viewed as a success by the company and by Wall Street.
"I'm not sure they're necessarily trying to compete with Netflix and Disney+," Hardart said, "I think they're just trying to deepen their relationship with their existing customers."