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Apple TV Plus' attack plan: Be smaller. Be cheaper. Be adequate

But the streaming wars are a fight Apple isn't likely to lose.

Apple's normal resting state is to be superlative. It's the planet's most valuable company. It created history's most successful product, some argue. CEO Tim Cook said Apple TV Plus would be "unlike anything that's been done before." And maybe he's right -- but not in the way he meant. 

As Apple takes the stage as a streaming-video company today, it's inhabiting a role it doesn't play often: Smaller. Cheaper. Meh? 

Apple TV Plus, launching Friday, is the gadget giant's subscription video service with original TV shows and movies for $5 a month. It's Apple's combatant in the so-called streaming wars, one of a crop of deep-pocketed tech and media companies pouring money into creating subscription video services to take on Netflix. With more than 150 million global subscribers, Netflix dominates streaming. Now upstart competitors like Disney Plus, HBO Max and Apple TV Plus are throwing billions of dollars into prestige TV to launch their streaming services too. 

But the main thing setting Apple TV Plus apart from the pack? You pay less -- and get less -- than the rest. Not exactly Apple's usual style.

Atypically Apple

Apple's known for making premium products with price tags to match. Apple TV Plus' shows and movies are clearly high-end -- the service's reported budget of $6 billion helps. The Morning Show alone, which is the service's marquee drama with Reese Witherspoon and Jennifer Aniston, has an eye-popping $300 million reported budget for 20 episodes. 

But at $5 a month, Apple TV Plus is among the cheapest of its kind, an atypical move for Apple. Disney Plus, which launches Nov. 12, costs $7 monthly. Netflix's entry-level plan is $9 a month and its most popular plan is $13. HBO Max will cost $15 a month when it rolls out in May. 

The price makes sense when you look at the library available to stream. The tech giant is launching Apple TV Plus with just nine titles on Friday. You could binge the entire day-one catalog in a single day. 


The Morning Show is Apple TV Plus' marquee drama series. 


HBO Max, by comparison, will have 10,000 hours of video available to stream, more than a year's worth of video. Disney Plus will launch Nov. 12 with roughly the same number of original titles as Apple TV Plus, but Disney will also have more than 300 movies and thousands of TV episodes.  

Apple will be adding more to its service, of course. Episodes of its initial series are rolling out week to week, and the service will premiere new titles too. Servant, a thriller from director M. Night Shyamalan, is set to debut Nov. 28, and Truth Be Told, a mystery starring Oscar winner Octavia Spencer, will premiere Dec. 6. 

But the early reviews of Apple TV Plus' limited programming are varied. See, a post-apocalyptic thriller starring Jason Momoa, has the coldest critical reception so far, with a 46% rating on Rotten Tomatoes. Faring better are Dickinson, a comedy about poet Emily Dickinson starring Hailee Steinfeld (82%), and For All Mankind, an alternative retelling of the space race (81%). 

But Apple has staked more on The Morning Show than any of its other series. While almost all reviewers praise the actors' performances, many describe it with gut-punching descriptions: "brutally dull," "rudderless," "a kludge."  One reviewer said both the show and the Apple TV Plus service "don't need to exist." 

Apple didn't respond to a message seeking comment for this article. 

Losing to win

But others argue that the most important elements to Apple TV Plus' success or failure won't be its lineup of shows right out of the gate. 

"We can debate whether this is the best show ever or not," Rich Greenfield, an analyst at LightShed, said in an interview. "Where you start is very different from where you are four years later. It's apparent to me that Apple is very serious about ramping far beyond the initial four, five, six shows."

Skeptics overlook Apple TV Plus' reach, he said. Apple TV Plus will be at the fingertips of possibly hundreds of millions of people at no extra cost, Greenfield estimated. 

He's referring to the tech giant's deal offering a year of Apple TV Plus free to anyone who buys an Apple gadget -- that's any iPhone, iPad, Apple TV, iPod Touch or Mac sold starting Sept. 10. 

It will be harder to gauge how many Apple TV Plus subscribers the free-year deal will bring in, given that Apple ceased sharing unit-sales figures earlier this year. But to set the bar, Apple sold nearly 100 million iPhones, iPads and Macs in the final three months of 2017, which was the last time Apple detailed its unit sales during the all-important holiday shopping season. 

While some people may never bother signing up despite the free perk, other accounts will represent multiple viewers. Apple TV Plus will be part of Apple's family-sharing feature, which allows you and up to five family members to share a plan. "I buy a device -- my kid can watch for free, my wife can watch it for free," Greenfield said. 


Dickinson, which appears to include a scene of girls twerking in hoop skirts, has been getting some of the best reviews of the shows launching Friday on Apple TV Plus. 


Beyond the free accounts, though, is Apple's real competitive weapon: the more than 900 million active iPhones out in the wild. 

This advantage has already fueled Apple to become one of the biggest streaming music providers in the world in just a few years. Apple Music is second only to Spotify in worldwide subscribers. That's partly thanks to Apple's aggressive marketing, and partly thanks to an atypically long three-month free trial compared with rival services. But Apple Music's success is mostly due to its prime real estate on the iPhone. 

At last count, Apple Music had 60 million subscribers. If Apple TV Plus and its free-year deal managed to match that number, the video service would be double the size of Hulu

With more than $200 billion in cash on hand, Apple can continue comping millions of subscriptions and losing money on Apple TV Plus for as long as it wants. It probably won't -- the company is looking to its services for more growth, including iCloud, Apple Music, Apple Arcade and, yes, Apple TV Plus. Stronger profit propelled services and wearables, helping to offset declining sales in its core iPhone business, the company reported Wednesday. And Apple is closing in on its goal for services to hit $50 billion in annual sales before 2021. They currently stand at $46.3 billion.

Rivals like Disney and AT&T, meanwhile, will be sweating to make good on their gargantuan takeovers. Disney's $71 billion acquisition of Fox and AT&T's $85 billion purchase of Time Warner were both partly motivated by the need to bulk up for a streaming fight. Netflix is likely to keep borrowing billions in debt to maintain its fire hose of programming.

Apple won't be a loser in the streaming wars. The question is: How much is Apple willing to lose in order to win? 

Originally published Oct. 31.
Update, Nov. 1: With Apple TV Plus launching.