Apple TV+ to Adjusts Its Strategy to Better Compete in Crowded Streaming Marketplace

Apple TV+, a streaming service featuring Apple Originals, the award-winning series, compelling dramas, groundbreaking documentaries, kids' entertainment and comedies has finally realised that Apple TV+ originals aren't enough. The iPhone maker is reportedly getting into the back-catalogue business, in a bid to compete with the likes of Netflix, Amazon Prime Video, and Disney+.

In certain instances, silence speaks volumes. Apple TV+ and Disney+ launched within two weeks of one another in November, with the latter announcing a series of impressive subscriber benchmarks, such as 10 million sign-ups on the first day and 50 million paying customers in April, along the way. Yet six months into its early going and Apple has yet to provide any definitive updates on the growth of Apple TV+.

After what has been considered a slow start by industry standards, Apple TV+ is adjusting its strategy to better compete in the crowded streaming marketplace. Initially built around original content, Apple is now looking to acquire older movies and television series to build out its programming library, Bloomberg reports. Major streamers such as Netflix, Disney+, Hulu and Amazon Prime Video all house considerable back catalogs of content to keep subscribers engaged in between the launch of exclusive series. Now, Apple is getting in the game.

The outlet notes that Apple TV+ executives have already begun taking pitches from Hollywood studios about licensing legacy programming for the platform. To date, the service has around 30 original series with more on the way. Apple TV+ exclusives are still reportedly the top priority, but an infusion of older content such as re-watchable sitcoms and well liked movies would help to retain the slowly growing subscriber base. This strategic shift could further fuel long-running rumors that Apple will eventually look to acquire a studio such as Sony Pictures, Lionsgate or MGM.

Given its smaller library headlined by exclusives such as Jennifer Aniston and Reese Witherspoon’s The Morning Show and Chris Evans’ Defending Jacob, Apple TV+ has smartly priced its service ($4.99 per month) well under the competition. But despite this advantage as well as offering a year free to consumers who buy Apple devices, Apple TV+ has not grown as quickly as expected. Bloomberg reports that roughly 10 million people had signed up for TV+ by February, with about 5 million actively using the service.

Disney+ recently surpassed 54 million paying customers, Netflix added nearly 16 million new subscribers in its last quarter, Hulu has exceeded 32 million subscribers and Amazon Prime Video is estimated to have upwards of 30 million users. With WarnerMedia’s HBO Max and NBCUniversal’s Peacock launching in the coming weeks, Apple TV+ will need to boost its profile to succeed in an increasingly competitive landscape.

Then again, Bloomberg does note that Apple TV+ has helped grow the company’s products sales, which last quarter totaled $13.3 billion—or about 23 percent of its revenue. Much like Amazon, Apple’s overarching goal with its streamer is to drive users to its primary business (in this case, selling Apple devices) and not necessarily “win” the streaming wars. As such, the platform has far more leeway than a Netflix or Hulu.

Still, this strategic pivot is an acknowledgment that the first six months have not been as robust as possible and that tweaks need to be made to aid growth and expansion.

May 20, 2020