It’s a great time to be a consumer of content right now. The internet and broadband has completely changed how we read, write, share our thoughts, and enjoy music and videos.
Not long ago, we had cassettes and CDs for music, DVDs for movies, and movie rental libraries. Not anymore. We stream everything – Spotify and Apple Music give us playlists and singles that we can enjoy and share with our friends. Movies and TV shows are streamed on YouTube, Amazon Prime, Netflix, Hulu, and other such services.
In an effort to attract us, the distributors of the content – like Amazon and Netflix – are creating original TV shows and movies. Users like us pay a subscription fee in order to access this content.
So who are the players in the video streaming market, how big is this, and why are we talking about it?
Apple, Inc. launched Apple TV a few years ago, but if you have used it, you know that it mainly allows us rental access to movies once they are out of the theatres and before they show up on the other streaming services. Apple announced its revamped offering in the video streaming business on March 25, 2019. So we thought it to be a good time to take a look at what this market looks like.
Apple reported revenues of $256 billion in 2018, out of which revenues from its services was reported at $37 billion, or approximately 14.5%. These services include the App Store, iCloud, iTunes and Apple Pay. Video streaming is negligible here, but Apple hopes to grow this services part of its business, as growth in the market of phones and hardware is slowing down. Subscriptions are a big part of its new plan. This includes subscriptions to newspapers as well as TVs, movies, and games.
How big is the current video streaming market? Statista says that there were 283 million people worldwide who use streaming services in 2018. This is projected to increase to 411 million in 2022. At that many users, it is currently a worldwide market of $24 billion. That’s pretty big, and that’s in entertainment. There are other applications in education and finance.
Why are they anticipating so much growth? Smartphones are everywhere, in almost every hand. That, coupled with increasing internet and 4G penetration, means that more people have access to streamed content.
Who are the market leaders? Netflix and Amazon Prime are fighting it out in many markets. However, Disney-Fox (Disney+ and Hulu), AT&T-Time Warner, and now Apple, are looking at ways to enter, or to create a bigger presence in this market.
New content: Apple has Oprah Winfrey, Steven Spielberg, and other big name actors and actresses acting in new content that it is creating for its video streaming service, Apple+.
How about gaming?They have announced that Apple Arcade is coming soon. This is a subscription service through which users get access to a large library of games (over 100 to start with) for a monthly fee. Apple is helping to fund the development of the games that will be exclusively available through the service, from many developers including big names like Cartoon Network, Disney, Konami, Lego, and Sega. These will be accessed through a dedicated Apple Arcade tab in the App store.
Didn’t Google just announce something similar? Unlike Google Stadia, (Google has announced a new platform to stream games – see our article on Stadia) the service is not cloud based and can be downloaded and played offline across iOS, Mac, and Apple TV. Since multiple platforms are supported, you can start a game on one device and switch over to another without losing your progress. It also includes Family Sharing which means that a single subscription can be accessed by up to six family members just like it works on Apple Music. With the subscription, there will be no ads or in-app purchases. However there is no information yet on how much it will cost.
When do we get this? Sometime in the fall. It’s a bit unclear.
What does this mean for us? We can sit back, relax, and prepare to be entertained!
Written by: Zarir De Vitre and Sunaina Murthy.