Apple

Apple Banks On Oprah For A Leg Up In Chasing Amazon On Content

Can Oprah Winfrey help lead Apple to new frontiers of digital commerce? Or is the media mogul and longstanding promoter of reading merely another aid in Apple’s apparent ongoing quest to be more like Amazon?

In case you haven’t heard: Apple and the famous Oprah Book Club have announced a partnership to, in the words of the technology company, “build a vibrant, global book club that has the power to both transport and transform people – turning every book into an opportunity for self-discovery, and bringing the world together through reading.”

More practically, this means the consumer can buy and access Oprah Book Club selections via the Apple Books service (both eBooks and audiobooks), and Apple TV will feature the famous former talk show host out of Chicago interviewing authors. (First up is Ta-Nehisi Coates, one of the best current U.S. writers in the humble view of the PYMNTS New Orleans Bureau, a man who is an essayist and writer for The Atlantic magazine and whose debut novel was just released.)

The deal with Winfrey comes amid Apple’s turn toward seeking more revenue from its services. It also follows, by about a year or so, Apple’s rebranding of its iBook feature to Apple Books. People with long memories also might recall how, earlier this decade, Apple was found not guilty by a U.S. federal judge on charges related to alleged eBook price-fixing – a case that arose from the swamp of competition for digitally focused readers, including Apple, Amazon and various publishers.

What About Amazon?

It appears unlikely at this point – even with the participation of Oprah – that Apple can mount serious competition to Amazon when it comes to the digital and mobile distribution of books, and winning over the hearts and minds of serious readers. Authors and other observers don’t exactly give their highest marks to Apple Books when it comes to encouraging sales of books and other factors, including marketing to consumers who might already be predisposed to go deeper into the Apple ecosystem. “Even so,” according to one still relevant review of Apple Books, “it’s still one of the biggest eBook stores around, and is another easy source of service revenue.”

That said, this new deal with Oprah is arguably just the latest instance of the once trail-blazing Apple turning into more of a follower than a leader over the past few years.

That’s a view recently taken and reiterated by Karen Webster in a PYMNTS column that dug into Apple’s recent turn to services, mostly to offset slowing growth for hardware. Analyzing such products as Apple subscription news, its new credit card, and music offerings – along with other changing aspects of the digital and mobile landscape – Webster wrote that the “power of Apple’s ecosystem is diminishing at the same time that it hopes to make money from its services.” That sure doesn’t bode well for Apple Books, at least if one has high expectations for how the service will boost Apple’s bottom line and increase consumer loyalty.

Streaming Commerce Rising

The Apple-Oprah working relationship – which previously also included Winfrey-backed documentaries shown on Apple TV – comes amid big growth and significant changes for streaming commerce, as regularly documented by PYMNTS coverage and research.

Indeed, the streaming market is an increasingly competitive space. AT&T’s WarnerMedia is planning to launch HBO Max, while Disney+ and Apple TV will also start giving Netflix a run for its money soon. Offering a combination of original content and viewer favorites is just one way services are attempting to create competitive differentiation. And the latest Subscription Commerce Conversion Index goes a step further, exploring how consumers use streaming services and what keeps them from canceling subscriptions.

According to the Index, 83.3 percent of consumers subscribe to at least one form of service. But those services fall disproportionately in the streaming category, with the most popular services being entertainment-related. Streaming is by far the most common subscription service (70 percent), while online games (30.6 percent) and digital media (27.7 percent) are used by fewer than half that figure.

Delving into those top three subscription types, the streaming market is valued at an estimated $23.5 billion, a figure representing 0.12 percent of the United States’ gross domestic product (GDP). The online gaming market is valued at approximately $15.3 billion, roughly twice as much as the digital media market’s $7.7 billion.

The Oprah Effect

Books, too, represent a potential for online growth for some companies, even in this age of Amazon domination of those products. For instance, news recently emerged that Brazilian retailer Magazine Luiza has announced it will be selling books online, which could be picked up in one of its almost 1,000 stores.

The company is aiming to compete directly with Amazon, which launched its online Brazilian operations in 2012. After two of the country’s biggest booksellers – Saraiva Livreiros SA and Livraria Cultura – filed for bankruptcy protection last year, Magazine Luiza saw room in the market. “The goal is to turn Magalu into a reference in this segment,” said Eduardo Galanternick, Magazine Luiza’s executive director of eCommerce, according to Reuters. He added that 300 of the retailer’s 954 stores are in cities without any bookshops.

It’s pretty much a no-brainer to say that Apple Books will have at least some impact on these areas of commerce, given that it’s Apple, and the company has tremendous resources and advantages when it comes to cash and consumer loyalty. And then there’s the Oprah factor. Her book club launched in 1996, and while she no longer operates her high-rated and very influential TV talk show, authors whose work get Oprah’s seal of approval still tend to do pretty well. Still, until more data emerges, it pays to have a skeptical attitude toward this latest move by Apple.

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