When Apple first announced its new slate of subscription offerings last spring, adding Apple News+, Apple TV+, and Apple Arcade to the a list that previously only included Apple Music and iCloud storage plans, many expected that the company would be offering a bundle of some kind to encourage users to more readily dive into multiple subscriptions.
Sadly, all of Apple’s launches — first Apple News+ in April, and then later Apple Arcade and Apple TV+ this fall — came and went without any word of how customers could subscribe to more than one of these services except by the obvious way of paying for them individually.
Of course, in the case of Apple TV+, the company surprised everybody with a year of free access for those purchasing any new Apple device capable of actually watching the service — from an iPod touch or iPhone 8 to an iPhone 11 Pro Max or MacBook Pro. Then, if that wasn’t enough, Apple announced that those on the Apple Music student plan would also get Apple TV+ for free, whether they’re existing or new subscribers.
So with relatively few people needing to actually pay for Apple TV+, there hasn’t been much incentive for Apple to worry too much about bundling it at this stage. By all reports the company has been working on a plan, but the catch is that for at least two of its subscription services, it’s going to need some buy-in from its licensing partners.
Music and News
Although Apple owns all of the pieces when it comes to Apple TV+ and Apple Arcade, and can therefore price them however it wants, the content that it offers on Apple Music and Apple News+ has to be licensed from the music industry and news and magazine publishing industries, which of course plays a factor in how Apple has to price these subscriptions.
In fact, the music labels are the main reason why Apple needs to charge a higher tier for an Apple Music family plan versus an individual plan, since the labels insist on a larger take when more users are sharing the service. However, it’s clear that this isn’t Apple’s preference, as it doesn’t do it with those services that it completely controls, and has even managed to negotiate a flat-rate family sharing plan with the news and magazine industry as well.
In the case of the Apple TV+ and Apple Music student plan offer, Apple is technically just giving away the Apple TV+ service for free, in much the same way as it is for those who have purchased a new Apple device. Apple isn’t calling this a “bundle” but rather an “Apple Music student subscription with free Apple TV+” and it’s also a limited time offer that Apple says “may end at any time”.
An Apple Services Bundle
According to a new report from Bloomberg, however, it looks like Apple is still working on a longer-term solution to actually bundle its subscription services, including not only Apple Music and Apple TV+, but also Apple News+ and possibly even Apple Arcade.
Citing people familiar with the matter, Apple hopes to have all of the details worked out “as soon as 2020” (although that’s still a pretty wide time frame). One of the big clues that Apple is serious about this strategy is a clause that Apple included in its deal with news publishers last spring that gave Apple the right to bundle the News+ subscription service with other paid digital offerings.
While it launched to a small amount of fanfare last spring, Apple News+ has become less talked about in recent months, and some publishers have been expressing concern about lower than expected revenue, although it’s not clear whether this is due to fewer subscribers or lack of interest in their specific content. Apple pockets half of the monthly subscription revenues, with the other half being distributed to the participating magazines and newspapers based on how much time subscribers spend reading each publication. Not all publishers are unhappy, however, with at least some, like the Los Angeles Times, saying that financial results have been “consistent with our expectations” and they continue to be optimistic about the growth of the service.
In bundling the News+ service, however, Apple would have to re-apportion the revenue from the service according to its share of the overall bundle price. This is apparently the main sticking point with Apple Music, as the music labels seem to have a bit more leverage over Apple in this case, and naturally aren’t eager to give up any of the revenue that they’re currently getting, which is a 70 percent take from Apple.
Naturally, Apple’s main goal for creating a bundle is to attract more subscribers, but it could also become an effort to try and prop up services that may be struggling by attracting users who wouldn’t otherwise subscribe to them separately.
Over the course of the next year, the honeymoon period for Apple’s services business is going to end and the company will face some watershed moments. Apple News+ publishers have the right to pull their magazines next April if they decide they’re not satisfied with the News+ service, and by next fall Apple will need to begin convincing subscribers to start paying for its Apple TV+ service.
Combining all of its services into a cost-effective bundle would be one way of drawing in subscribers who may otherwise be on the fence about paying for some of Apple’s services.