New Apple TV+ Set To Struggle In OZ
Apple who are seen as a ruthless competitor, not to mention an enthusiastic user of international tax havens like Ireland that were used to strip billions from the hands of Australian tax collectors is facing a new challenge in Australia, with their all new all singing Apple TV+ video service, along with a new media subscription service which will strip 50% of the revenue that a media Company could potentially earn going direct set to struggle.
Their iPhone sales are dropping and brands such as Samsung and Huawei are going to make sure they drop further as they deliver superior technology devices.
In Australia content is going to be a problem for Apple because the new service is split into two parts and 50% of their offering is already locked up.
The first part is a “subscription video on demand” (SVOD) service similar to Netflix.
Apple said that they have cut deals worth more than $US1 billion that will see the likes of Jennifer Aniston, Reese Witherspoon, J.J. Abrams, M. Night Shyamalan along with Oprah Winfrey, and Steven Spielberg, deliver new shows for the service, however Apple CEO Tim Cook has asked them to go light on sex and violence and to always promote environmental issues. His demands have already upset script writers working on the shows.
But it’s the second part that could nobble Apple’s ambitions in Australia because in the USA they will be flogging services such as HBO, SHOWTIME and Starz, for an additional monthly fee via what is called
“direct to consumer” (DTC). This won’t work in Australia because organisations such as Foxtel has the rights to HBO content.
SHOWTIME and Starz, the second and third biggest names have already got long term deals with the Nine Entertainment owned Stan. This will make life difficult for Apple in Australia where retailers are dropping the sale of the US Companies hardware products and sales of their iPhones are slipping by double digits.
To add one of these services to an Apple TV+ package is an additional cost and if US prices are anything to go by consumers are going to be better off staying with Netflix and Foxtel.
With no new unique Apple hardware on the horizon Apple is set to struggle in Australia if they cannot make content work. In addition, media Companies could be hit as Apple offer access to overseas publications via their new media subscription service that will impact publications from the likes of Bauer, Pacific Magazines and News Corporation who could see 50% of their revenue handed over to Apple.
Monday’s big media event was seen as lacking key details, and even the post positive analysts say it will take a few years for the products to have a material impact on revenue or earnings.
The big Apple plan is to build out its service offerings which currently represent 15 percent of its revenue from services in 2018, while more than 60 percent came from its iPhone, according to data compiled by Bloomberg.
But the big problem is that organisations such as Disney want to go direct and their multibillion-dollar investment in 20th Century Fox is all about streaming and locking in Apple customers to their service.