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Why Apple's video streaming service could be a 'Netflix Killer'

BusinessToday.In     March 26, 2019

Apple finally announced its streaming service in what could be termed as one of the most significant product launches from Apple in years. With the launch of Apple TV+, the Cupertino based company is entering an unchartered territory and plans to go all out against the current market leader, Netflix. Most naysayers are calling it a case of 'too little too late', but knowing Apple and its reach, the game has just begun.

Consumers have been expecting a 'Netflix killer' from Apple since the iPhone sales started to stagnate. Rumours were rife that Apple was planning to go all out against the likes of Netflix, Hulu and Amazon Prime. But, after the announcement, that featured several big Hollywood names, it is clear that Apple is aiming to be a serious alternative to Netflix.

Apple has often been late to the game. They were not the first ones to come up with personal computers, they were also not the first ones to introduce the portable music players or phones or tablets etc. Despite being late, the company has managed to conquer the market and decimate its competitors. Apple enters the market when it is partly mature and gets ahead owing to the quality of its products and services. Steve Jobs had spoken about cracking the integrated TV problem before his death. "I'd like to create an integrated television set that is completely easy to use", Jobs had said. Even Tim Cook, back in 2012,  had said that "this (TV) is an area of interest".

There are over a billion active Apple devices on to which Apple can push its streaming service. Netflix has around 140 million subscribers. Apple doesn't really have to try too hard to catch up and beat Netflix at its game. All it needs is a push notification. Also, most Apple users are loyal and don't mind paying for quality service.

Most people point at Apple's meagre $2 billion budget and compare it with Netflix's $15 billion budget for producing original programmes. However, one must not forget the Cupertino giants' $ 257 billion cash reserve. Budget is the least of Apple's problems as far as producing new and original content is concerned.

However, all is not lost for Netflix. Apple has not disclosed key details such as pricing, making it difficult to judge how its service will stack up against competitors. There is also a case of the video streaming market reaching a level of saturation which could work against Apple. "While Apple may introduce a bigger roster of original content than Amazon and Netflix during their respective launches, the streaming market has arguably already reached a level of saturation and consumer fatigue in the United States," said Colin Gillis, an analyst at Chatham Road Partners.

Edited By: Udit Verma

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