Apple is taking the fight to its competitors by aggressively pricing its new subscription-based movie streaming service Apple TV+. Shares of both Roku and Netflix fell by over 12% and 3%, respectively, after Apple announced its service. However, while experts say that the company’s entry into the market might be troublesome for competitors, Apple itself may face an uphill battle.
For one, Netflix, Amazon Prime Video and other services already have paying customers and much larger content catalogues (including original content), developer over years of service. Apple, on the other hand, is starting with eight original shows starring some big names from Hollywood.
Companies like Netflix already have deals in place to make content exclusively available on their platforms. For instance, Netflix’s hit show Sacred Games cannot be streamed anywhere other than its own platform. Similarly, Walt Disney Co’s Disney+ subscription service, which is to go live soon, will have all of Marvel’s superhero movies and a vast collection of other titles owned by Walt Disney. HBO, on the other hand, has HBO Max scheduled for launch soon, and the company owns titles like Game of Thrones.
But while that covers Apple’s competition globally, the battle in India may be even more skewed. Here, the company doesn’t just face off against Netflix, Amazon Prime Video and Hotstar, there are also a plethora of regional streaming services like Spuul, ALTBalaji, Voot and more, which have pretty huge content libraries with regional content. Not to mention Mukesh Ambani’s Reliance Jio, which has its own streaming service offered for free to its telecom customers.
Much like in other countries, Netflix, Amazon and Hotstar have also invested in getting original and exclusive content in India. Netflix, for instance, has the hit show Sacred Games that can only be streamed on its own platform, while Amazon has Comicstaan. Hotstar benefits majorly from the fact its owner Star India is one of Walt Disney Co’s companies. As a result, the platform gets exclusive access to a lot of Walt Disney content, and will also be getting Disney+ content from Hotstar.
“Content is the key here," said Hanish Bhatia, Senior Analyst, Counterpoint Research. Bhatia also pointed out that streaming sports content has been a boon for Hotstar, while regional players amass Indian language content. So, Apple’s content strategy here will play a big role, he said.
That said, Apple has a major advantage on its competitors too, in the fact that it already has millions of iPhones out on the market and is going to sell more with the iPhone 11, 11 Pro and Pro Max. In fact, the company is offering a year’s free subscription to Apple TV+ with its newest iPhones, which will help it gain subscribers early, albeit not paying ones.
Again, Counterpoint’s Bhatia pointed out that the installed base for iPhones is low in India, with less than 3% of the premium market. As a result, it can’t really depend on iPhone users to ramp up subscription numbers, even though it’s cheaper. Bhatia said the fact that Apple TV+ will be available on Amazon Fire TV and others will have an impact, but it would perhaps be even more beneficial if Apple could tie up with cable TV providers for entry into their set-top-boxes etc.
Experts seem to think the global scenar
io and India are two different beasts for Apple. Annette Zimmerman, Research Vice President and Lead Apple Analyst for Gartner said it was never a “either or" choice for customers between Netflix and Apple TV+. “Apple TV+ will be an addition to many and even more so now with that price of $4.99 for a family," she added.
However, Navkendar Singh, Research Director at International Data Corporation (IDC), says in markets like India where local content availability is critical, Apple will be facing an uphill battle. While the aggressive pricing will surely help Apple gain customers, he said a large customer base will come from adding local content and flavours.