Gene Munster: A free content strategy is the right approach for Apple

“CNBC reported that Apple plans to give away some of its forthcoming original video content to Apple device owners as a part of a new digital TV strategy (likely starting in Mid 2019),” Gene Munster and Will Thompson write for Loup Ventures. “We believe it’s the right approach for the company, because it advances their mission as Services company.”
“We expect Apple to spend $900M on video content in 2018, growing to $4.2B by 2022,” Munster and Thompson write. “Apple as a Service involves expanding the range of services unique to Apple that are available on your devices which, in turn, make it more likely consumers will replace an old iPhone with a new iPhone.”
4 Reasons why giving away original content makes sense:
1. Quickly build awareness of Apple’s video content with about 1 billion consumers (Netflix currently has 130M+ paying subs, Amazon Prime 100M+).
2. Increase hardware retention, an important component of Apple as a Service.
3. Drive usage of Apple’s pre-installed TV app that allows users to sign up for third party subscriptions (HBO, Showtime, Starz), from which Apple takes a cut.
4. Build a loyal viewer base that Apple could upsell to a range of paid options.
Read more in the full article here.
MacDailyNews Take: Everything, content-wise, goes through Apple’s TV app, eventually.
When buying a Mac, iPhone, iPad, Apple TV, etc. gets you access to FREE exclusive hit series and other content, Apple’s so-called “competitors” will be deer in the headlights, with nothing to offer but their typical Apple knockoff products. They’ll then be forced to sign deals with other outlets to offer free NON-EXCLUSIVE content that can be found elsewhere.
Apple devices sales will increase, meaning the install base will increase, meaning Apple Services will increase and the cost of exclusive original content will bar the low-margin fragmandroid bottom-of-the-barrel scrapers from ever following. Hey Haw! — MacDailyNews, October 10, 2018
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Smart move to make it a nice little perk of owning an Apple device. – MacDailyNews, October 10, 2018
SEE ALSO:
Apple plans to give away original content for free to device owners as part of new digital TV strategy – October 10, 2018
Netflix has no idea what Apple is doing with $1 billion worth of shows – October 10, 2018
Apple to debut Carpool Karaoke season 2 for free through TV app – October 9, 2018