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The biggest question mark about Apple's new TV service is price - and it's going to be a huge factor if Apple hopes to compete with Netflix and Disney Plus
The biggest question mark about Apple's new TV service is price - and it's going to be a huge factor if Apple hopes to compete with Netflix and Disney Plus
Summer's almost over, which means Apple's new premium TV streaming service is almost here.
Announced at Apple's "It's Showtime!" event back in March, Apple TV Plus will be the home for Apple's original programming starting later this year. The company has attracted some of the biggest talents in Hollywood, including Steven Spielberg, Oprah Winfrey, and J.J. Abrams, to create and produce dramas, documentaries, and comedies for Apple TV Plus.
Apple has announced over 20 different original shows coming to Apple TV Plus, but there are still two main details we don't know yet: its launch date, and its price. Apple has only said it will be an "ad-free subscription service" that will be available in 100+ countries, on every screen you have (including even Roku, Amazon Fire TV, and smart TVs) "this fall."
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But the real sticking point of this service, and its biggest indicator of early success, will be its price. Here's why that matters.
HBO also has a streaming service, called HBO Now. (Maybe you've heard of "Game of Thrones"?) That costs $15 a month.
Hulu is another popular service to stream TV shows. "Basic" costs $5.99 a month, and "Premium" costs $11.99 a month. If you want live TV with either package, just add $39 a month to your plan.
Amazon also has its own streaming service. To get Amazon Prime Video, you can pay $8.99 a month, but it's also included if you're an Amazon Prime member, which costs $12.99 a month or $119 a year and comes with a ton of other benefits, like free two-day shipping.
But the streaming service everyone is talking about right now is Disney Plus, which launches November 12. It'll offer access to Disney's films and shows, Marvel and Pixar movies, "The Simpsons," Star Wars, and a ton of original programming for just $7 a month.
So, where does this leave Apple?
Apple has a ton of star power attached to this service, but if Apple TV Plus hopes to succeed against Disney Plus, Netflix, Hulu, HBO, and Amazon Prime Video, it will need to compete on pricing. It's one of the only aspects people really care about.
Disney, in particular, has been extremely smart about pricing Disney Plus. At $7 a month, and with so much appealing programming, Disney can focus on beating out competitors first and foremost. Then, later, it can raise prices once it's built a substantial audience.
Apple should pursue a strategy similar to what Disney's doing. Both companies have money in the bank, and can afford to take losses on their new services as they grow their audiences and work out the kinks on the back-end.
Once Apple TV Plus has been around for awhile — maybe a year or two — Apple can consider raising prices. But it should be relatively affordable at first.
The good news is, Apple is already pursuing this strategy with its new game-streaming service coming later this year, called Apple Arcade. Apple has confirmed that Arcade will only cost $5 a month.
It would be incredible to see Apple price its premium-TV offering in the same way, but it's also highly unlikely. Apple is known as a "luxury" company, and I think it's more likely to expect pricing to be closer to HBO Now than it is to Disney Plus.
Hopefully, Apple TV Plus will have a compelling price tag to go with it. I'd bet Apple is looking at pricing it somewhere between Disney Plus' $7 a month and Netflix's $12.99 a month for the popular Standard tier, but I really hope Apple opts for the cheaper end of that spectrum.
I, like many people, don't want to own umpteen different streaming-TV subscriptions because that gets expensive. But I'm very interested in Apple's original programming, and would like to see it succeed because more competition in the streaming space — in any space, really — is a good thing. It will encourage other services to improve their own offerings, in terms of the shows they spend money on, and how they price everything to keep it appealing for customers.
A lot of people expect high prices from Apple; it would be a welcome surprise if Apple goes the other way, and makes Apple TV Plus as accessible as possible.
Are you looking forward to Apple TV Plus? Do you plan on buying it?
We'd love to hear your thoughts on Apple's new TV-streaming service. Shoot me an email at dsmith@businessinsider.com.
