Apple’s Free Content Strategy Takes Direct Aim at Netflix
By CultureBanx Team
Apple is offering its original content for free
Black people stream videos more frequently than the total U.S. population
The content wars are heating up between Netflix (NFLX -1.47%), Amazon (AMZN -2.04%) and Apple (AAPL -0.88%), especially since the latter has decided to start offering its original content for free. Great black content will be at the forefront of what Apple creates because, ultimately the tech giant wants to get a few successful franchises on its platform, to eventually create a paid Netflix-like subscription service in the future.
Why This Matters: Black people stream videos more frequently on all devices than the total U.S. population, according to Nielsen. As part of the company’s strategy to entice more African American viewers to its platform, they struck a multi-year content partnership deal with Oprah Winfrey this past summer. Offering content for free just shows that Apple wants to have a bigger stake with this group, by betting that authentic black storytelling is the key to winning viewers and platform loyalty.
Apple users will be able to sign up for other subscription “channels” at their normal prices and the company is spending about $1 billion on original content this year. Amazon is expected to shell out around $5 billion and Netflix is investing up to $8 billion.
Here’s where the competition really heats up, there will also be third-party channels that consumers can subscribe to, with Apple presumably getting a cut of subscription revenue. They will go head to head with Amazon in this space since its Prime Video offers third-party channel subscriptions.
Just like Netflix, it doesn’t seem like Apple is trying to support the service with ads. Netflix being the major player in the space with 125 million subscribers already has major black content creators on their team from the Obamas, to Shonda Rhimes and even Kenya Barrish, just to name a few. Amazon followed Netflix and made a beeline towards this demographic by inking a deal with Jordan Peele.
Situational Awareness: There are some analyst who note producers still prefer to be connected with Netflix. However, Apple plans to debut its new TV app in early 2019, so time will tell whether or not their freebies are going to pay off in the long run.
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