Apple announces low-price streaming service

Apple has announced a $5-per-month streaming service that will intensify competition in a space dominated by Netflix.

Michael Liedtke reported the news for the AP:

Apple is finally taking on Netflix with its own streaming television service and, uncharacteristically for the company, offering it at a bargain price — $5 a month beginning on Nov. 1.

Walt Disney Co. is launching its own assault on Netflix the same month, for just $7.

It may be sheer coincidence that the cost of paying for both Apple and Disney subscriptions will still be a dollar less than Netflix’s main plan, priced at $13 a month. But the intent to disrupt Netflix’s huge lead in the streaming business couldn’t be clearer.

Apple delivered the news Tuesday while also unveiling three new iPhones that won’t look much different than last year’s models other than boasting an additional camera for taking pictures from extra-wide angles.

The aggressive pricing is unusual for Apple, which typically charges a premium for products and services to burnish its brand. Most analysts expected Apple to charge $8 to $10 per month for the service, which will be called Apple TV Plus.

But Apple is entering a market that Netflix practically created in 2007 — around the same time as the first iPhone came out. And Netflix has amassed more than 150 million subscribers, meaning that Apple needed to make a splash.

Business Insider’s Daniel Strauss noted:
Shares of Disney, Netflix, and Roku slid on Tuesday after Apple announced its TV subscription offering would carry a modest price tag of $4.99 per month.

Rivals cost at least a few dollars more: Disney Plus costs $7 a month, and Amazon Prime Video costs at least $9 a month. Hulu costs $6 a month for its basic plan, while Netflix and HBO each offer their services for more than $10.

Apple also said customers who buy a Mac, iPhone, or Apple TV will receive a free year of Apple TV Plus. The company’s streaming service has been widely viewed as one of its efforts to diversify its services business. 

Apple’s announcement comes as the streaming space is bracing for the launch of several new platforms. AT&T is expected to roll out a streaming service called HBO Max, while Comcast is planning to introduce its own ad-supported platform.

Wendy Lee from the Los Angeles Times wrote:

Apple said nine original programs will premiere with the Nov. 1 launch. Those include “See,” a drama starring Jason Momoa; “The Morning Show,” about a broadcast morning show starring Jennifer Aniston and Reese Witherspoon; a coming-of-age story called “Dickinson”; “For All Mankind,” a series about the global space race; the children’s series “Helpsters”; and an animated original “Snoopy in Space.”

The content on these platforms will play akey role in drawing subscribers.

Apple has signed up high-profile directors, actors and celebrities to help it launch its service. Some industry insiders, however, have questioned Apple’s content strategy.

“The pricing of Apple’s streaming TV service at $4.99 per month is a showstopper and a major shot across the bow at the likes of Netflix and Disney, among others,” said Daniel Ives, managing director of equity research at Wedbush Securities.

“Life just got tougher for Netflix,” said Gene Munster, a managing partner with venture capital firm Loup Ventures.