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Apple Event: Apple in Flatrate Fever with Apple TV + and Apple News +

eIt does not take long for guests to suspect that they are witnessing something special. As Tim Cook walks on stage on Monday, a performance begins that is different from anything the audience is used to. This time the Apple boss does not hold any new iPhones in the air. He also shows no new MacBooks or iPads.

And there is no "One More Thing", no surprise at the end of the presentation, which in the past often revealed a new gadget. After 110 minutes on Monday in the Steve Jobs Theater at the headquarters in Cupertino, California, it's clear: It's time for change. Apple is in the middle of a strategy swing.

Instead of data on gigabytes and pixels, Apple shows on stage where the group sees an important part of its future: in Hollywood. Never before has there been so much prominence in the film and show business at an Apple presentation. Apple really wanted to show who the company won over for cooperation.

Even Bibo from the "Sesame Street" was there

Spectators could quickly lose track of the celebrity staccato on stage: star director Steven Spielberg left the stage to Reese Witherspoon and Jennifer Aniston, joined by Steve Carell to promote the joint project of the "Morning Show".

Then it went on every minute. After Jason Momoa and Alfre Woodard, Kumail Nanjiani and Sesame Street Bibo followed suit to make way for JJ Abrams and Sara Bareilles. In the end, Oprah Winfrey showed up.

Apple Streaming TV

Steve Carell, Reese Witherspoon and Jennifer Aniston

Source: AP / Tony Avelar

"Its show time", was already on the invitation for the Apple presentation. And in the end, the iPhone group leaves no doubt: He wants to get involved in show business in the future. He wants to produce series and films – and sell them to viewers. For more than a billion dollars, Apple has commissioned TV shows and shopped. Cook has been negotiating with TV channels and content producers for years.

The video flat rate, which Apple internally according to US media reports also "Netflix killer" is called, it will give starting in autumn in more than 100 countries. The company did not mention a price for the service called Apple TV +. "This is the beginning of something very exciting," said Apple CEO Cook.

The business with the iPhone is finally

But Apple also wants to earn money for the content of the others. Packed in flat-rate snacks, Apple wants to provide its users not only the devices, but also what they consume on it. The company presented its redesigned TV app, where users can book single flat rates from services such as Cinemax and Sundance Now, or from US broadcasters HBO, Starz and Showtime. Apple has presented 26 such partners.

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What's up with Apple? The transformation of the group has a simple reason: The iPhone business is finally over. The former growth rates of the main revenue provider – the iPhone represents more than 60 percent of the business – are past. For the first time in more than ten years, the turnover and profit of the group shrank during the last Christmas quarter. And at the beginning of the year, Apple had to lower its quarterly outlook for the first time in nearly 20 years.

But the content business is anything but a desperate act. Apple has rather come to the taste. No other segment is growing as fast with the company as the services, which include the AppStore as well as Apple Music or the cloud offerings. Last year, the division increased by one-third to nearly $ 40 billion and now accounts for about 15 percent of Group sales.

In the recent quarter alone, it was almost $ 11 billion. However, payments in this segment, which are made by Google, so that Apple pre-sets the search engine on his devices.

Source: Infographic WORLD

Meanwhile, Apple also points out how profitable the services business is. While Apple's hardware margin is 34 percent, the service has recently been 63 percent. Two years ago, Apple CEO Cook had issued an ambitious goal. By 2020, service revenue is expected to double to $ 50 billion. By comparison, Netflix returned $ 16 billion last year.

Apple offers its users storage space in the cloud for a monthly fee. Its streaming service Apple Music now has more than 50 million subscribers. For all services together Apple reported last 360 million subscriptions, 120 million of which were added within a year. Apple wants to count half a billion subscriptions by 2020.

A run is hardly possible for Apple

Apple's latest flatrate will fuel this growth. Daniel Ives, technology analyst at US investment firm Wedbush, talks about a possible "game changer". The new streaming service could gain 100 million new subscribers within three years. Over time, he could contribute $ 7 to $ 10 billion to sales.

In fact, the potential is difficult to assess. Apple refers to its number of users. About 1.4 million iPhones, iPads and Macs are in use, including more than 900 million iPhones. No other provider can access such a range.

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Stefan Winterbauer (l.) And Christian Meier

A run through is hardly possible for Apple, the market is too competitive. In music streaming Spotify is well ahead of Apple Music with 96 million paid subscriptions. And when it comes to video streaming, Netflix and Amazon Prime have a big head start. Netflix has about 140 million users worldwide.

Both companies have come to terms with Apple, a sign that they are ready to defend themselves. Spotify has even recently filed an EU antitrust complaint against Apple. As a platform operator, Apple gains "unfair advantages." In fact, Apple charges 30 percent off subscription fees in the first year when Spotify wins its customers directly on the Apple devices. In the second year, there are still 15 percent. In contrast, Netflix also resists. Since the beginning of the year, Netflix subscriptions can no longer be completed through Apple's AppStore.

Much competition for Apple's streaming service

In the streaming market for films and series, it is increasingly close. Netflix, Amazon and Hulu are fighting for the same users in the US. In other markets, such as Germany, other providers are also active, for example Sky. Broadcasters and producers have their own streaming services or plan them. This includes HBO Now. Warner Media and Disney want to launch offers later this year. Disney then takes its content, including all Lucas Arts films and the pool of 21st Century Fox movies, onto its own platform.

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ILLUSTRATION - To the topic service report of Julian Hilgers from 14 February 2019: A tip on the remote control and already the film enjoyment can begin. The fact that content can be retrieved on a time-independent basis is an advantage of streaming services. Photo: Christin Klose / dpa-tmn - free of charge only for recipients of dpa-thematic service +++ dpa Topic +++

So there are plenty of alternatives to the Apple services. Apple's $ 1 billion investment in in-house production fades beyond the budgets that Netflix and Amazon spend on content, for example. Netflix alone plans to spend $ 15 billion this year, 80% of which will be on its own series and films.

For Netflix, such high expenses are worthwhile only if the content can be distributed to as many users as possible. In the past, Apple was rather strangers to such a philosophy, the group had in particular the users of its own devices in mind. That is changing slowly now. So the group brought last year Apple Music in the US also on the echo speakers from Amazon.

Apple Vice President Peter Stern introduces the "Netflix Killer"

Peter Stern (vice president of Apple Services) introduced the "Netflix killer"

Source: AP / Tony Avelar

And during the Consumer Electronics Show (CES) in January, Apple and Samsung announced that iTunes will also be available on Samsung TVs in the future. "On our Smart TVs, we see rapid growth in traffic to streaming services," says Samsung manager Leif-Erik Lindner. "The fast availability of new and popular streaming services has become an important buying criterion, and partnerships with streaming services are a core element of our strategy."

The new TV app of the group will soon be available on other devices, including on TVs from LG, Sony and Vizio and set-top boxes from Roku and Amazon Fire TV, in addition to Samsung TVs.

Gaming Flat with over 100 exclusive games

But Apple does not stop at flatrates for TV shows and music. In the future, there should also be a gaming flat, called the Apple Arcade, which will be available in more than 150 countries from autumn.

At the start it should be more than 100 new and exclusive games that users are allowed to play for a monthly subscription fee. The price for this, however, Apple has not yet called.

Compared to video streaming, the market for gaming subscriptions is not yet competitive. But here, too, several companies have announced that they want to offer games via the cloud, in the past week Google presented for its Stadia platform. Microsoft, game developer Electronic Arts and technology group Nvidia are working on similar services or are already testing them.

News Flatrate not yet in Germany

Apple is also likely to have Apple with its new news flat rate for ten dollars per month, because reportedly Apple wants to pass only 50 percent of the subscription fees to publishers. New York Times editor-in-chief Mark Thompson has warned colleagues against providing their content for the service. There is a risk of losing control of your own product. For the time being, Apple's flatrate will be available in the US, there are no details for the start of Germany.

While the "New York Times" and the "Washington Post" reportedly gave Apple a basket, the Wall Street Journal (WSJ) and the Los Angeles Times will be part of the new offering called Apple News +. That's not risky. Of its digital users, the WSJ charges $ 39 a month. It is quite possible that these customers now switch to the Apple flatrate, which costs only a quarter of that.

The fact that Apple can offer the content of over 300 magazines at the start is mainly due to the acquisition of Texture from last year. The company already had a similar offer for $ 10 a month. With the purchase Apple has after a report of the "Wall Street Journal" access to most major North American magazines for a period of five to 20 years get. Apple also retains a 50 percent interest in contracts with publishers such as Hearst Magazine and Condé Nast.

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The offer is now available in the US and Canada, and in Canada the newspaper "The Star" and more than 30 Canadian magazines are part of the service. Australia is scheduled to follow this year, as will the UK. Later, other European countries are added. Information on the market launch in Germany Apple has not made.

Of course, Apple's content offensive does not mean a departure from previous deals. The iPhone sales are still highly profitable. But with the services, Cook builds up another foothold, which ensures a diversification of the risk. Ultimately, the subscription services will also lead to a greater commitment of users to their Apple devices. So Apple would have a double benefit.



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