Unlike Roku and Amazon, Apple immediately welcomed HBO Max and Peacock into its own streaming TV, tvOS, and iOS systems. Apple’s TV strategy is interesting.
The context for this discussion is found in this CNBC story.
Basically, subscription video services like Netflix, Hulu, HBO Max, Peacock, etc. want to have a direct relationship with their customers, control user data and maintain their advertising inventory.
Digital video platforms, like Roku, Amazon Fire TV, Apple TV (4K) (and iPad, iPhone), etc. see themselves as the critical delivery equipment and gatekeepers. They feel entitled to a reduction in the activity generated by subscription video services. This is all the more imperative since these decoders are not very expensive, certainly to encourage the customer to commit. (Apple is an exception because Apple always charges a premium for the best.)
The CNBC article first sets the stage.
Content providers and companies want to make sure they build viable business models, especially as Wall Street judges overall company performance on the success of their video streaming initiatives. These deals, which typically span multiple years, will be the backbone for streamers to achieve profitability in the years to come.
Next, author Sherman explores this clash of business models in detail.
NBCUniversal Executives Don’t Want Peacock Included in Amazon Channels, Amazon’s Store For Buying Video Apps [sources] said. While some streaming apps, such as CBS All Access and Starz, can be purchased through channels, others, including Disney +, cannot. Amazon takes a percentage of the revenue for each customer who subscribes through the store.
A similar source of friction is related to advertising. And so, this shock has, so far, prevented HBO Max and Peacock apps from appearing on Roku and Amazon Fire TV. But they are on Apple video products.
Apple’s TV strategy
Let’s look at Roku. Unlike Roku, Apple has its own subscription TV service, Apple TV +. And one would casually expect Apple, in a competitive frame of mind, to play hard with other vendors. But that hasn’t been the case with HBO Max and Peacock. (And we’ve heard that Netflix and Amazon are getting some great deals as well.)
First, the Apple TV itself, where the action takes place on the big screen, has much less market share than Roku. About a third. Apple must be easy to use because there is a lot less weight. (Of course, there are a lot more iPhones / iPads to use as leverage, but it’s also not such a desirable platform for blockbuster movies on the big screen, especially now with theaters closed. )
Second, if that makes viewers watch Apple TV + as well, it’s up to Apple to sell more hardware. Being known for having (graciously) a rich selection of subscription options across all of its hardware helps.
Finally, our own Charlotte Henry.
Tim Cook and other high-profile CEOs to appear before House Judiciary Antitrust Subcommittee Monday, July 27 at 12 p.m. ET. The Apple boss will be joined by Sundar Pichai (Alphabet), Jeff Bezos (Amazon) and Mark Zuckerberg (Facebook).
The last thing Tim Cook wants is to meet the predatory costs of gaining access to Apple’s fairly dominant (but barely monopolistic) hardware platforms.
And so, like other silver merchants, Apple has maneuvered itself into becoming the place to be. For now, anyway.