WSJ: Apple insiders call their TV app ‘a Netflix killer’

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Tim Cook has apparently been hovering over the services division like a nervous parent.

 

From Tripp Mickle’s With the iPhone Sputtering, Apple Bets Its Future on TV and News ($), posted Sunday in advance of Monday’s paper:

The original [TV] series will be delivered in a new TV app that staff have been calling a Netflix killer. It will make it easier for people to subscribe with a single click to channels such as Starz, Showtime and HBO, with which Apple has been negotiating to offer their shows to users for $9.99 a month each, people familiar with the talks said…

Mr. Cook, who had vowed earlier that year to double Apple’s services revenue by 2020, began meeting regularly with the services division.

At the monthly sessions, the 58-year-old CEO has peppered the team with detailed questions. He wanted services team members to tell him which apps were selling well, how many Apple Music subscribers stuck with the service, and how many people were signing up for iCloud storage, a costly service that required spending billions of dollars to build data centers around the U.S., according to people familiar with the meetings.

The turning point for Apple management, according Mickle, came well before its 2014 acquisition of Beats’ music streaming service:

By then, concerns had already been rising inside Apple about the iPhone’s future. The number of devices Apple sold was growing more than 20% annually as Mr. Cook pushed it into new retailers and markets, but sales executives told colleagues in 2014 they were running out of avenues for easy growth, former employees said. “They were freaked out,” one person said.

Apple executives made clear during talks with TV makers that it needed as broad a reach as possible to compete with Netflix and others. Last year, Apple announced a similar agreement with rival Amazon to bring Apple Music to Echo smart speakers.

“We made a mistake with Apple Music, thinking we could go it alone, and it took a long time to catch up. We still aren’t there yet,” the head of marketing Apple services, Jon Giselman, said during a meeting with one of the company’s partners, according to a person in attendance…

Other successful subscription apps have given away much more content at lower prices than Apple is expected to offer initially. Amazon Prime members, who pay $119 annually, get free video content and discounted music subscriptions. Some inside Apple’s services group wanted similar benefits for iPhone buyers. Mr. Cook and his leadership team have made it clear that its forthcoming services will carry a price tag.

“There’s this conflict between wanting to become a services business and acting like one,” said the person. “They haven’t solved that.”

My take: A good appetizer for Monday’s event, with more than the usual helping of original reporting—including this fun fact from within Mickle’s own shop:

The deal [with Apple News, first reported by the New York Times] will result in the Journal hiring more reporters focused on general news to help feed Apple’s product, one of the people said. The Journal sells its own subscriptions for $39 a month.