Apple is reportedly entering the streaming market, becoming yet another competitor to heavyweights like Netflix and Amazon Prime. But if the reports are accurate, the tech firm is not trying to simply take away customers from other streaming services—it’s trying to boost its hardware user base.
According to a survey from 2017, Apple started losing the favoritism game among customers.
Amazon and Google are becoming more popular among tech users, and the firm may have decided to venture into new territory. But as Netflix is estimated to have 147.5 million individual users this year alone, this battle might not be about dethroning streaming's number one but simply giving smartphone and smart TV users another reason to make the switch. At least, that’s what it seems.
Apple will reportedly add streaming to its exclusive host of services, not allowing users to access its streaming services on other devices.
As USA Today reports, users will have to own an iPhone, iPad, or an Apple TV to have access to Apple’s streaming services, whereas Netflix and Amazon Prime users can simply hop on any device, even an Android phone, to watch their favorite shows.
With Apple bringing former TV executives on board and spending $1 billion on entertainment projects, which includes a series from Oprah Winfrey, the firm might just produce enough exciting content to take users away from other subscription services.
Still, Apple has a lot of catching up to do if it hopes to get anywhere near Netflix.
Making $14.9 billion in revenue in the last 12 months, the streaming service has enough capital to develop and purchase some of the most beloved and popular shows in the industry. So maintaining its position as the most popular streaming service available may not be that difficult, after all.
Can Streaming Help Apple Beat Amazon?
After the Silicon Valley giant launched the iPhone X in late 2017, early 2018 numbers showed the company had experienced disappointing sales. At the time, many questioned whether Apple would bounce back—a concern that was quickly dismissed as the firm reported record revenues for the third quarter of 2018. Still, the largest competitor inching closer to the iPhone maker, Amazon, is not too far behind.
In a report from market research company Forrester, James McQuivey explained that when compared to Amazon, “Apple’s signature strengths no longer provide the leverage they used to.”
“Amazon’s service and convenience-based strategy has superseded Apple’s product-first approach, giving Amazon faster access to new markets,” McQuivey concluded.
Over time, Apple will lose, the report added, because Amazon means more to people. The fact that its streaming service is so popular and convenient might just be one of the reasons why users are willing to pay $119 a year to be an Amazon Prime member—on top of the several other benefits members enjoy.
Perhaps Apple noticed that its signature products are no longer enough to justify the brand’s popularity, and it is now willing to branch out to keep consumers excited to be exclusive Apple customers.
In order to get the public to pay attention, the service is set to go live in the first half of next year, making it available on Apple devices in more than 100 countries at the same time.
The company also plans to enter Amazon Prime territory by offering customers the ability to subscribe to channel packages from network and cable providers, as well as its own host of original programming. Unfortunately, this move comes late, as Apple has long lagged behind when it comes to entertainment.
As The Verge pointed out, Apple dominated the digital media market 15 years ago with iTunes, the place where consumers could go to browse, purchase, and play TV shows, music, and movies. But despite iPhone’s dominance in the smartphone market, the company lost its position with services such as Spotify and Netflix entering the picture. Low subscription costs, a wide variety of options, and the ability to use these services from any device may have all helped to get consumers to turn their backs on iTunes.
Will the company gain its market share back with a new streaming service? The answer might not be a solid “yes,” as Apple is still not ready to venture outside of its hardware products. But perhaps the move will help them boost their sales—or at least scare Netflix and Amazon enough to force them to offer better services to their happy customers.
Whatever happens, consumers will always benefit from market competition.