New Delhi: Tech giant Apple’s foray into the global content business may be easier said than done, at least as far as the Indian market is concerned. The California-based company that announced its new streaming service Apple TV+ on Tuesday, scheduled to hit stores on 1 November, is a relatively late entrant to the cluttered OTT (over-the-top) video market in the country that is currently home to over 30 players, including American services such as Netflix and Amazon Prime Video, and a bunch of home-grown entities like Hotstar, ZEE5, ALTBalaji and VOOT.
For one, its $5 a month price could be a deterrent even though the Apple TV+ service will be available free for one year to up to six users simultaneously on all new iPhones, iPads, iPod Touch, Apple TV and Mac PC. Viewers in India already have access to cheaper options. In a bid to woo mass audiences, Netflix launched a mobile-only subscription of ₹199 a month this July, while arch rival Amazon bundles video, audio and shopping benefits under a ₹999 annual plan. ZEE5 offers plans for ₹99 a month, ₹599 for six months and ₹999 a year.
“It may work well for premium Apple users, but isn’t a small amount for regular consumers who are already subscribed to multiple streaming apps and DTH (direct-to-home) platforms,” according to Abneesh Roy, senior vice-president, research, Edelweiss Securities.
The Apple TV+ library, too, doesn’t have a lot to offer to the mass Indian consumer. The service, which at launch will include eight original shows, including The Morning Show, featuring Jennifer Aniston and Reese Witherspoon and See, a sci-fi drama featuring Jason Momoa, has no Indian originals in the offing.
To be sure, Apple is the only smartphone company in the world looking to produce its own original content. Other phone brands have relied on partnerships.
The focus on new gaming and content-streaming subscription services at aggressive monthly tariffs comes as the California-based company looks to create new revenue streams amidst falling phone sales globally.
Overall, Apple posted a quarterly revenue of $53.8 billion in the June quarter, an increase of 1%, from the year earlier. iPhone sales generated $26 billion in revenue, down 12% from last year’s June quarter.
However, the focus on subscription-driven revenue may bode well for the company as ‘services’ generated an all-time record revenue of $11.5 billion for the company in the June quarter when revenue excluding iPhone increased 17% from last year with growth across all categories.
“Services is a big bet for the company. They have realised they have to keep users hooked in the iOS ecosystem. No other brand has this kind of control on its end-to-end ecosystem. The content subscription is at an aggressive tariff as Apple does not want price to be a deterrent at an early stage. It may even look at acquisitions in the content space going forward,” said Tarun Pathak, associate director, Counterpoint Research.
Apple will stream the first show on 1 November and new shows will be added every month.
“We are giving you all these shows for the price of a single movie rental. Plus, every new iPhone, iPad and Mac purchased will give you one year of Apple TV+ free,” Apple chief executive Tim Cook said at an event at the Steve Jobs Theatre, in Cupertino, California, on Tuesday.
Apple, the world’s third-largest smartphone seller after Samsung and Huawei, has a minuscule share in this price-sensitive market where Chinese budget brands such as Xiaomi, Vivo and OPPO, and South Korea’s Samsung are top sellers. Budget smartphone sellers dominate 95% share of the smartphone market.
However, the brand, which opted for a strategic shift in pricing strategy in April with discounts on its flagship iPhone XR, has realised the importance of reducing price entry barriers for the iOS ecosystem. In April, the phone maker decided to opt for price cuts in India and brought down the price of the 64 GB iPhone XR from ₹76,900 to ₹59,000. Similar discounts were introduced for other variants of the same model as well. The price-sensitive Indian consumer lapped up this scheme.
“Apple is realising that with the saturation in China, they have to look at the next set of emerging markets and their pricing of the iPad, Apple Watch series 3 and iPhone 11 reflects that,” Pathak said.