At only $4.99 per month, Apple TV+ will be the least expensive streaming service available when it launches on November 1. What role does Apple play in the streaming wars?

Market Strategy

Apple is utilizing one of the most common, yet effective, strategies to increase its Apple TV+user base. Anyone who buys a new iPhone, iPad, Apple TV, iPod Touch or Mac will be able to get one year of Apple TV+ for free. The service only costs $60 per year, so this strategy doesn’t necessarily incentivize people to buy new devices. Possibly, if the price point for Apple TV+ had been significantly higher, it could have. The reality is that people who wanted to buy a new device before the 2019 event will likely still buy it. Those who didn’t probably won’t be swayed by the free trial.

The real market strategy Apple is using is to launch a one-year free trial as a way to establish a built-in audience. The company is banking on the fact that it will have enough relevant content to get people to continue to subscribe to the streaming service by the time that the free trial ends. This is certainly a possibility, especially thanks to shows featuring celebrities like Oprah, Jennifer Anniston, Reese Witherspoon, and Jason Momoa.

In March 2019. Oprah announced her decision to launch a live book club and two documentaries on Apple TV+.

Price Point

The decision to offer Apple TV+ for only $4.99 is a move to undercut Netflix, Hulu, Disney, and other streaming competitors. Clearly, this price point signals a long-term investment by Apple rather than a short-term strategy to get people to switch over immediately. While established companies in the streaming space have services that cost more, they already have a full library of original programming for users. They also have an abundance of new content published every week. For Apple, the low entry point means that it is positioned to attract new users who are likely to keep their existing streaming subscriptions from other providers. By offering Apple TV+ at one-half or even one-third of the price, Apple is essentially creating room for itself to establish a user base. Will the price of Apple’s streaming service eventually go up? This is likely, if not certain. We have seen Netflix and other streaming services do this over the years. Any price increase from Apple will happen only once it establishes a loyal fanbase and builds a content library on-par with other streaming services. No predictions on when that will occur.