Three reports in recent weeks have suggested that Apple is getting ready to launch a new subscription service that combines music, original video, and news and magazine content.
CNN has the most information on Apple’s next big moneymaker:
Apple SVP Eddy Cue is overseeing a plan to bundle Apple’s original TV and film programming, Apple Music, and Apple News (including Texture) into a variety of subscription plans, a source familiar with the plans said. The bundles, first hinted at by The Wall Street Journal two weeks ago, will not be offered until next year.
Apple hasn’t officially announced a media bundle, but there are other signs pointing to a subscription product. Texture is a magazine subscription app that Apple bought earlier this year, for example.
Apple has also been buying several TV series and signing deals with media personalities like Oprah, but it hasn’t announced how it expected to air these shows. Apple Music, its Spotify competitor, has 40 million subscribers paying around $10 a month for the service.
Now it’s clear that Apple wants to roll these pieces together into one big bundle. Apple’s leadership has said it wants to sell over $50 billion in subscriptions and other services by 2021, and a media bundle would fit right into its strategy.
Other details about Apple’s bundle are sparse, and its overall strategy is unclear — is the subscription going to be limited to Apple devices only?
“It’s still largely unclear what Apple’s distribution strategy will be,” Macquarie analyst Ben Schachter wrote in a note on Friday. “Apple may aim for the largest possible audience across all devices and operating systems, or keep its video exclusive to the Apple ecosystem.”
Another open question is the price. Is Apple going to give its users a discount for subscribing to the bundle, and is it going to offer the parts of the bundle independently?
Another decision that Apple is facing is whether to include iCloud storage or other tech-focused features, or whether to keep the bundle content-focused.
HBO Now costs $15 per month. Netflix is $11. And Amazon Prime, which includes shipping, video, and other benefits, is $13 per month.
Independent Apple analyst Neil Cybart discussed those scenarios in a newsletter from earlier this week.
“When it comes to pricing a bundle of music, video, and magazines, it’s difficult seeing Apple offer such a product for less than $15 per month. Once we go below $15, Apple would likely be subsidizing music and magazines. That’s not likely. As for the video, Apple will likely follow others and place at least some kind of price on the content to reflect its value.
Accordingly, a bundle of music, video, and paid magazines could probably go for $20 per month for an individual. Family pricing would also be available and run more like $30 per month.”
He concludes that Apple might offer a 25% savings over buying all of the pieces of content separately.
Here’s a mockup of how Apple could present bundle options, designed by MacRumors editor Joe Rossignol:
CNN pegs the launch of the bundle as next year. More information about any additional movie and TV licensing, pricing, and distribution strategy should become clear before then.
While Apple has a huge install base of over 1 billion devices, ultimately those details are what is going to determine how attractive Apple’s bundle is for customers.
Originally posted by BusinessInsider
