Virtually everyone knows by now that Apple is launching subscription television offering Apple TV+ publicly on November 1. But the company, which has reportedly invested billions of dollars in dozens of original programs for the service, appears to be facing a serious problem: finding viewers willing to pay for it.
Even though Apple announced a relatively aggressive $4.99 monthly price for the service, everything suggests Apple TV+’s earliest viewership will come largely from giveaways. Last month, Apple said it would give a free year of Apple TV+ service to purchasers of new iPhones, iPads, Macs, iPods, and Apple TV boxes. Today, actress Hailee Steinfeld told her Instagram followers that Apple is expanding the giveaway to include Apple Music student subscriptions, making the video service free for anyone with an existing $4.99 audio streaming account.
To be clear, I don’t fault Apple for trying to get Apple TV+ in front of as many eyeballs as possible. In fact, I personally appreciate the recent and obviously related rollouts of Apple TV apps to certain Samsung smart televisions, Roku devices, and Amazon Fire TVs, which have belatedly but collectively brought iTunes videos and Apple TV+ subscription access to tens of millions of previously unsupported TVs. Since Apple has certainly sold millions of new devices since September, and Apple TV+ includes “family” access for up to six people per account, the company is building a solid day one viewer base for its new shows.
The issue is that regardless of how Apple’s executives and accountants spin the numbers, these are Apple TV+ viewers — potential viewers — rather than Apple TV+ customers. By virtue of having purchased a new Apple device over the past month, I qualify as a potential Apple TV+ viewer, but I certainly would not pay $5 per month for anything that’s been announced thus far for the service.
Reviews for the initial slate of Apple TV+ shows have been mediocre. Based on reports of production troubles, I would use the word “unsurprising” to describe that situation, though I had hoped the company would recover from sketchy and unpleasant trailers. Unfortunately, Metacritic reveals that all of the shows have rated less than 70 out of 100: Flagship drama The Morning Show is currently at 60/100, while the Jason Momoa-backed See is scraping the barrel’s bottom at 38/100. These numbers aren’t good by any measure and only look worse if you consider how much money Apple has spent — and has committed to keep spending — on these programs.
A fair argument can be made that Apple had no choice but to give away Apple TV+ access for the first year. It doesn’t have a catalog of original content like the one Disney leveraged to launch its own $7 monthly Disney+ service. One might suggest Apple is playing the long game, offering free trials to existing customers as it builds up its library of original TV shows and movies. Since content creators — and dare I say potential future advertisers? — may be reluctant to participate in a video service that has no viewers, Apple needs to do whatever it can to get those numbers up, and quickly.
From my perspective, though, launching Apple TV+ in its current form was a big mistake. There were multiple compelling alternatives, including turning the entire iTunes TV show library into an all-you-can-watch subscription service (akin to Apple Music), or bundling access to multiple existing third-party channels with original Apple content in a single service. Apple already had the relationships and properly encoded content to make either of these deals happen in a snap, but it didn’t. Either of these options would have been an instant “yes” for millions of existing Apple customers, who would gladly have paid for a true rival to Netflix with different on-demand content.
Starting with established shows and adding original content is a formula that worked for Netflix and is working for Disney+. Some people (including me) even saw enough combined value in Disney’s back catalog and future pipeline to pay for three years of service in advance. Instead, Apple somehow decided to go it alone with Apple TV+, just as it did with its standalone Apple TV devices, passing on numerous opportunities to work with TV makers and cable companies to create a better solution. We know how that worked out for Apple TV boxes, which have spent years as also-rans in the media streaming hardware market.
After years of “pulling the string” to see where its Apple TV hobby would go, Apple is looking at a multi-billion dollar investment that now seems unlikely to turn a profit or break even in the immediate future. We’ll see whether Apple is able to convert some of its growing pool of free trial-acquired potential viewers into paying customers, but unless the content becomes significantly more compelling over the next year, Apple TV+ may well become more noteworthy for the dramas it’s creating for Apple than anything it’s offering to viewers.
VentureBeatVentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
- up-to-date information on the subjects of interest to you
- our newsletters
- gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
- networking features, and more