Apple’s Entertainment Bundle Moves A Step Closer To Reality – Forbes
Let the Great Re-Bundling begin! Apple is considering bundling its just-launched TV+ video-on-demand service with its older News+ and Music services in a single, lower-priced offering, according to Bloomberg.
The latest sign of the looming bundle, which could manifest next year, is a provision in Apple’s deals with publishers that lets it roll News+ in with other Apple digital services, Bloomberg said, citing anonymous sources.
A bundle likely would be popular with consumers, but also would reduce payouts to publishers participating in News+, which offers a wide array of daily news stories from prominent outlets such as the Los Angeles Times and Wall Street Journal as well as 300 magazines such as The New Yorker, Computer Music, Sports Illustrated, and National Geographic.
Apple splits News+ revenue about evenly with participating publishers. Some of those publishers have expressed disappointment that their stories weren’t generating more cash, though Bloomberg also quoted Norman Pearlstine, the L.A. Times executive editor, saying financial results so far “are consistent with our expectations.”
An entertainment bundle seems like a no-brainer for the Cupertino giant, an attractive way to supercharge its larger strategy of backfilling flattening (though still prodigious) sales of new iPhones, the single biggest source of its $1.1 trillion market capitalization.
In its latest quarterly earnings, Apple services revenue topped $12.5 billion, roughly doubling in three years. On an annualized basis, those revenues would make Apple’s services unit as big as one of the country’s largest companies on a standalone basis, dwarfing any of the publishers in News+.
The three digital services together cost just under $25 a month separately for family subscriptions that benefit as many as six accounts.
An Apple entertainment bundle conceivably also could include Arcade, Apple’s highly regarded $4.99/month video-game service that launched in October. Other Apple services include its iCloud backup and cloud-computing offering and the Apple Care warranty program.
Apple already is offering one TV+ bundle: giving away a year of the service to anyone who buys an iPhone, iPad tablet or Mac computer. Given that Apple sold roughly 280 million of those devices last year, that could mean 100 million or more people might have free subscriptions to TV+ in coming months, should they choose to watch.
Apple TV+ had a slow-ish start to its Nov. 1 debut, with mixed critical reviews for its small initial slate, which included four big-budget scripted shows featuring stars such as Jennifer Aniston, Reese Witherspoon, Jason Mamoa, Hailee Steinfeld, and Joel Kinnamon.
One survey this week showed that less than half of consumers were aware of TV+, while a much higher percentage had heard of the Disney+ service by the time it launched this week.
Also this week, Apple shuffled the ranks of its TV+ executives, with Kim Rozenfeld, the head of current scripted programming and documentary and unscripted content, stepping down.
Rozenfeld’s Half Full Productions then signed a first-look deal with Apple to create TV+ shows, a sign the streaming era hasn’t ended at least some Hollywood traditions. Rozenfeld is a former Sony TV executive and one of the first signings by TV+ toppers Zack Amberg and Jamie Ehrlicht, themselves Sony TV veterans.
Disney+ this week reported 10 million initial subscribers, thanks in part to sharply discounted early signup offers and its own $12.99/month bundle of video services that also include ESPN+ and Hulu.
At mid-day, Apple share prices were down $1.89, or .71 percent, to around $262 apiece. That’s still up roughly $30 a share in the past month.
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