Apple Bets On Streamed Content, Subscription Retail

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Apple had a product and services pageant in California on Monday (March 25), and while you have no doubt heard about the star attraction, at least from a payments point of view — Apple Card credit card — there were other newsworthy parts of the event, including an appearance by Steven Spielberg (lately making headlines regarding his views of Netflix movies and their Oscar potential).

The Apple event, heavy on subscription commerce offerings, took place at time when the company is trying to find more revenue from services given recent stumbles with iPhone sales — a move that seems to be pleasing at least some investors lately. Part of that satisfaction derived from anticipation about Apple’s Monday event, including its launch of Apple TV Plus for original programming.

“Unfortunately, Apple didn’t announce a lot of details other than the name and that it will be available in the fall with online and offline viewing,” according to one on-scene round-up of the Apple event. “It spent the rest of the time introducing a gaggle of directors, actors, and actresses to help unveil Apple TV Plus, including Oprah Winfrey, Reese Witherspoon, Steven Spielberg, Jason Momoa, Steve Carell, Alfre Woodard, Sesame Street’s Big Bird, and Kumail Nanjiani.”

Apple also announced an Apple TV update which will now, according to that report, “include a focus on channels like HBO, PBS, CBS, Acorn TV, and Tastemade without punting users to a third-party app. Subscribers can choose which channels they’d like to subscribe to and pay per channel instead of a traditional, large package from cable companies. However, pricing was not shared during the keynote.”

The content streaming announcement was long expected, and in recent weeks, as the launch approached, sources said that Netflix and Hulu were not expected to participate in it. One sticking point could be that Apple wants to keep 30 percent on every customer that subscribes to an over-the-top video service — a significant increase from the 15 percent it currently takes from customers that sign up to streaming apps through the App Store.

Magazine Subscriptions

During the Monday event, Apple also said it would offer a more muscular online news subscription service — one that not only includes newspapers but some 300 magazines and costs $9.99 per month. The service reportedly also will offer recommendations for other news stories based on the magazines being read by subscribers. One selling point of this service? Privacy. Apple reportedly said that the service will not allow advertisers to track what subscribers are reading, which means no targeted ads based on consumed news stories, as is the case with social media.

As PYMNTS has regularly documented, subscription eCommerce is among the hottest areas of digital retail. (Even Burger King is doing it, via small coffee purchases and its mobile app.)

Top-level success in subscription commerce requires operators to be fast with transactions, and very informative to consumers about the benefits and process of the retail program, among other traits. That’s according to the PYMNTS Subscription Commerce Conversion Index — the best performers in that space meet those consumer demands. Subscription commerce winners also provide secure, flexible and clear transactions, underscoring the role of payments to Apple’s plans for its subscription programs.

Online Gaming

Another subscription area for Apple, according to the Monday event in California, is online games, via Apple Arcade. According to another report from the event, “as an extension of the App Store, Apple’s splitting off premium paid games from the free into an Apple Arcade subscription service. Note that this isn’t game streaming — it’s an all-you-can-eat subscription service launching with over 100 games. Coming this fall, but no pricing as yet.”

The Apple gaming move on Monday comes days after Google announced the launch of its Stadia gaming service, an offering based on cloud technology, and which negates the need for specific and often pricey gaming hardware.

Payments and purchases promise to play big roles in the Google and Apple gaming efforts. According to the Global Games Market Report from Newzoo, “2.3 billion gamers across the globe [spent] $137.9 billion on games in 2018,” a growth in spending of some 13 percent compared to 2017. “Digital game revenues will take 91 percent of the global market with $125.3 billion.”

It wasn’t just the Apple Card credit card that made headlines Monday for Apple — the company also made bigger bets on subscription commerce and streamed content, highlighting some of the larger trends in digital payments and commerce.



Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.


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