Apple unveils TV subscription service with help from Oprah Winfrey

Apple unveiled a host of new subscription services at a star-studded event in Cupertino, California, on Monday morning.

The event marked the debut of a new era for a company that built its brand on hardware and software; just last week, Apple announced new products with little fanfare, saving its firepower for Monday’s celebration of services, from its attempt to take on Netflix to a new Apple credit card.

Steven Spielberg, Reese Witherspoon, Jennifer Aniston, Steve Carrell, Kumail Nanjiani, and Big Bird were on hand to promote new creative projects that will be released through Apple’s new subscription television service, Apple TV+.

Spielberg’s Amazing Stories will resurrect the 93-year-old brand of a science fiction magazine that inspired the director as a child. Witherspoon and Aniston announced The Morning Show, described by Aniston as “an honest look at the complex relationship between women and men in the workplace”. (Carrell pitched in with a demonstration of mansplaining.)

The event also touted a new children’s series, a performance by Sara Bareilles, who is producing a show with JJ Abrams, and another sci-fi series starring Jason Momoa and Alfre Woodard.

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The line from Apple is that “this is not just another streaming service”. Whether viewers agree remains to be seen; Apple’s stock fell 1.5% during the event.

It took Oprah Winfrey, who was introduced with great fanfare as the event neared the two-hour mark, to cut through Apple’s unending fluff about storytelling (think one part American Express ad, one part Academy Award montage) and lay out the real value proposition Apple can offer to creatives: “They’re in a billion pockets, folks,” Winfrey said. “The whole world’s got them in its hand, and that represents a major opportunity.” Winfrey has two documentaries in the works, as well as a new format for her book club.

Cook’s gamble on content comes at an inflection point for the company. Apple rode demand for its premium products all the way to becoming the world’s first trillion-dollar company in August 2018. But it only took a few months for gravity to reassert itself. In January, the company was forced to revise its sales forecasts downward – a shock move attributed to an economic slowdown in China that sent its stock tumbling.

Apple is now looking to reorient its revenue streams to rely less on expensive hardware sales and more on subscription services. The company already counts more than 360 million subscribers to its various services – including iTunes, Apple Music, iCloud, the App store and Apple Pay – accounting for $10.9bn last quarter, though that figure includes users who subscribe to third-party apps or services using Apple’s payment systems.

By comparison, Netflix counted 139 million paid subscribers at the end of 2018, Amazon Prime had about 100 million, and Hulu had 25 million. Those three rivals, as well as the forthcoming Disney streaming service, Disney+, will have a jump start on Apple when it comes to content.

The main selling point of Disney+ is the company’s unrivaled back catalog, but Netflix, Amazon and Hulu have all spent years building up their own stables of original content and talent. Netflix spent more than $12bn on content in 2018 and is expected to spend as much as $15bn this year. To compete, Apple will have to spend, and spend richly.

“Apple is very late to this game,” said the eMarketer analyst Paul Verna. “Netflix has become the gold standard in how to create and distribute content, using all the data they have about their viewers.”

Apple will also have to prove itself a conducive home to artists. While Netflix and Amazon started out with boundary-pushing shows such as Orange is the New Black and Transparent, Cook has reportedly brought his dad-ish sensibilities to running a studio, putting the kibosh on sex, violence and profanity.

In true Cook style, the fun stuff was preceded by an hour-long infomercial for Apple’s various other subscription services, which the CEO introduced by reading out a dictionary definition of “services”. The event was packed with details about updates on gaming, news and payments.

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Apple News+ will offer subscribers access to 300 glossy magazines, including National Geographic, Rolling Stone, Vogue, the New Yorker and Sports Illustrated, for $9.99 a month. The service will also include the Wall Street Journal and Los Angeles Times, but Apple failed to convince the New York Times and Washington Post to get on board.

Roger Rosner, Apple’s vice-president of applications, boasted that all the subscriptions combined would cost $8,000 per year, which helps to explain the ambivalence from many news publishers. The news service is debuting in the US and Canada, but the company said it would launch in the UK later this year.

Apple also teased Apple Arcade, a subscription service for games, and introduced Apple Card, a credit card backed by Goldman Sachs and MasterCard. The credit card will be fully integrated with the iPhone, with an Apple-esque attention to detail, such as leveraging machine learning to translate the gibberish frequently seen in one’s statement into the names and addresses of the actual businesses.