Apple TV App Leads Service Business Surge

Bursting out of the gates with more than 54 million subscribers globally, Disney has completely blocked out the sun for Apple's own entry to the streaming wars, Apple TV , at least early on.

But while Disney stood out as a lone beacon amid The Walt Disney Co's devastated first-quarter balance sheet, which saw an overall 91% decline in profits, Apple TV was, inversely, only a small functional piece of a broader success story for Apple, which saw its services revenue increase to a record $13.3 billion for January through March.

With sales of iPhones, MacBook Pros and other hardware gadgets in decline, the success of services was the reason Apple was able to eke out narrow 1% revenue growth in its fiscal second quarter.

Aside from a few shows like Beastie Boys Story, Apple TV 's originals haven't built much buzz.

Apple TV

Since Apple TV launched Nov. 1, most of the buzz has been about the fact that there's been so little buzz. Apple TV has no library and not enough original shows to succeed, pundits have contended. A recent HarrisX poll found that only around 7% of streaming homes were watching the service, mostly on an aggressive Apple promotion that provides it free for a year. And its star-packed original shows, perhaps excluding The Morning Show, have fallen surprisingly flat with TV critics. (Although the recent debut of filmmaker Spike Jonze's Beastie Boys Story has delivered the $4.99-a-month streaming service what looks like a hit.)

Reporting its earnings on April 30, Apple really didn't get into that many specifics on its streaming servicely. While the so-called streaming wars topic is big news in the media business, and Apple reportedly spent $6 billion on original shows to be part of it, high-profile Apple TV really does seem to be a mere character actor in Apple's broader app-based services business. Other members of the staple are other recently launched apps, Apple Arcade, Apple News Plus and Apple Card.

Apple is aiming for its services business to finish 2020 with twice as much revenue as it generated in 2016. And the Apple TV app, for which Apple TV is merely a component, is a key driver to that effort.

Notably, Apple isn't really fighting the streaming wars so much as controlling the chessboard. For example, both AT&T's WarnerMedia and Comcast's NBCUniversal have recently put out information suggesting their respective HBO Max and Peacock streaming services will be available on iPhones, iPads and Apple TV devices when they debut.

To get there, they have to pay the house that is, the Apple TV app. Apple TV gets to live there rent-free. But every other streaming competitor must pay the going rate of around 30% of revenue, give or take, to get a location on this piece of technology real estate that no streaming service can afford to live without.

Our third-party subscription business grew across multiple categories and increased over 30% year-over-year, reaching a new all-time high, Apple CEO Tim Cook told investors.

LINK:	https://www.broadcastingcable.com/news/apple-tv-app-leads-service-busi...
	See more stories from bandc

Most recent headlines