Blog Post

Apple Takes a Big Bite Out of the OTT Marketplace

04/02/2019 - Sierra Ducey

On Monday, March 25th the cord cutting trend was celebrated in Cupertino, California. Apple streamed their event which featured exuberant introductions to the company’s new credit card, Apple News Plus app, and Apple Arcade outlet. The announcement regarding Apple TV updates – primarily the introduction to Apple TV Plus – was dramatically saved for last. High-energy clips of the company’s upcoming original content were plastered across the big screen. Well known actors, actresses, and directors (including Big Bird from Sesame Street) strolled onto the stage. The world of Hollywood and the realm of tech combined seamlessly as crowds erupted in applause. But what does this match mean for the future of cord cutting? And how does this new option stand out in today’s crowded streaming arena? Society’s preconceived notion of television is quickly changing pace and consumers are unsure how to keep up. There are millions of routes to follow when it comes to watching desirable content. Apple TV Plus, though exciting, will only contribute to this confusion after launching later in the year.

Apple TV Updates: What’s Happening Here?

Apple is known for insane technology that challenges the old and puts users first. As this predominantly product-oriented company dips into the world of entertainment, the same principles ring true. The following is a recap of the new television-based updates that Apple users can expect to come into contact with over the course of 2019:

  • Apple TV Channels: A new section of the Apple TV app that will act as a house for all of a consumer’s favorite entertainment outlets. It’s a safe haven – a place where a user can easily access their third-party cable and streaming subscriptions, sans Netflix. Consumers will only pay for the services they desire and no advertising will be involved. Starz, Showtime, Cinemax, Hulu, HBO, Comedy Central, etc. have already agreed to participate, making it seem like a viable option to cable users who are bombarded with tons of channels at once. This new outlet is expected to launch on Apple TV in May and across Mac devices in the fall.
  • Apple TV Plus: This is where the brand’s original content comes into play. This is the platform chock full of shows, movies, and documentaries that Apple hopes will propel them above the ranks of Netflix, Amazon, and Hulu. It is an ad-free streaming service, accessed on and off Apple TV devices (think Smart TVs, Roku, Amazon devices) that will offer curated, one-of-a-kind entertainment to viewers. New shows will become available each month and episodes featuring the likes of Steven Spielberg, J.J. Abrams, Oprah, and Reese Witherspoon are already in the works. Pricing for access has not been released, but the quality of Apple’s original programming, (worth $2 billion) may call for a premium rate. Compare that spend to the $13 billion Netflix reserved for original content in 2018. Little about the platform has been revealed, but the stakes are high and the competition is on.

What Does This Mean for the Future of Television?

Consumers now have multiple OTT (over-the-top) television options when it comes to replacing cable services with streaming subscriptions once and for all. The typical streamer pays for three services and 60% of young professionals consider these services to be the best way to watch television. ⅔ of US households are still holding onto cable TV, however, due to its familiarity, ease, and access to hundreds of channels. Apple TV+ and Apple TV Channels challenge these areas by aligning the different types of entertainment into one hyper-organized platform. And because Apple has access to 1.4 billion Apple device users, Netflix, Amazon, Hulu, and cable companies need to be on the lookout. If everything – phones, watches, computers, and now, televisions – can be combined under one proactive, reputable brand, why wouldn’t a consumer be interested? That’s Apple’s competitive advantage, but users are unpredictable. Loyalties and perceptions are all over the grid. To assume that everyone will drop competitors for that shiny Apple logo is a strong statement to make. But cord-cutting – or the act of leaving linear TV behind – is a trend that keeps on growing. The number of OTT video service viewers is expected to rise to 188.3 million by 2020 and there are now more subscriptions to streaming platforms than there are subscriptions to cable and satellite providers. The addition of Apple TV Plus will add to these numbers significantly. At the end of 2019, expect to feel the pressure of leaving linear behind for good. And if you’re already a cord cutter, expect to be faced with even more services and payment options as Apple TV + runs onto the digital playing field.

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