Apple TV+ represents the technology giant’s attempt to enter the entertainment and streaming world. Apple plans its entry in realistic terms. Apple knows many consumers already commit monthly subscription dollars to other services. These customers might find paying anything to Apple to be a stretch. Apple has a plan. The company thinks it can survive by charging only $10 per month. At least this is what Bloomberg reports. Specifically, Bloomberg reveals Apple might debut its service at a price of $9.95 per month.
The current streaming landscape sees many different companies fighting for a small consumer base. Amazon, Netflix, YouTube, and others all offer subscription-based streaming services. There’s nothing wrong with such a great variety, but budgets have their limitations. Offering a cut-rate price on service could draw people into Apple’s new offering.
$9.95, however, comes off as a bargain-basement price. Negative connotation surround services with dramatically low pricing. Customers may believe the quality is lacking due to cutting corners to reduce costs. Of course, such assessments would not be accurate with Apple.
Apple won’t unleash a subpar streaming channel. To do so would undermine its brand, a brand the company spent decades building. And besides, information leaked about Apple TV+ reveals the site delivers 4K and HDR sound and picture. Neither of these two traits comes cheap for Apple.
So, what is behind the consideration for a low price?
Apple realizes that the pool of potential customers may be smaller than desired. With Disney soon launching a streaming platform, more competition develops for customers. Apple might believe it can build up a baseline of subscribers with low subscription fees. Later, fees would likely go up. Netflix raised prices to the chagrin of customers but didn’t see a mass exodus of subscribers.
Netflix, however, famously suffers from a cash flow disaster. The company can’t build up its subscriber numbers to catch up with the hundreds of millions it spends on content. Apple, unlike Disney, does not maintain a library of movie and TV shows to offer immediately. Apple would need to purchase content for streaming. Can the company do this and charge ultra-low rates? Apple made its decision. Quarterly reports will indicate whether the company made an appropriate one.