Monday, December 5, 2022

Apple TV+ ad-supported tier may cost $4.99 per month

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As MacDailyNews reported in August via our little birdie, Apple looks to be planning to launch an ad-supported version of its Apple TV+ streaming-video platform, likely in 2023.

Adam Levy for The Motley Fool:

Apple is exploring the potential for advertising within Apple TV+. The company has held talks with several media agencies, according to a report from Digiday. An ad-supported tier of Apple TV+ could launch as soon as early 2023.

Apple would likely shift the pricing of Apple TV+ higher if and when it introduces advertising. It’s one of the few streaming services that hasn’t raised prices in recent years despite its improving content catalog. It could keep its $4.99 per month price tag for subscribers willing to watch ads, and charge slightly more for those that want to avoid them.

Advertising would play well with Apple’s interest in sports rights. It currently has deals with Major League Baseball and Major League Soccer, and it’s in talks with the NFL. It presently shows ads during MLB games, but those ads are sold by the league, not Apple. But sports come with natural ad breaks and lots of live viewers, making them a great source of ad inventory for media agencies.

Advertising and a price hike would make Apple TV+ more profitable (or less unprofitable), but the infrastructure and relationships it could build to bring advertising to Apple TV+ could support a much larger business.

Apple’s VP of advertising, Todd Teresi… and his team are working on… a demand-side platform, or DSP. A DSP would allow advertisers to automate their ad purchases across Apple’s inventory, which includes advertisements in the App Store, News, and Stock apps. It may soon expand its advertising product to Maps, too.

MacDailyNews Take: No one seriously thought Apple TV+ would be $4.99/month forever, especially as it wins major Emmys, Oscars, BAFTAs, etc. We’re surprised it’s been held so low for so long (but it’s been smart to do so while building out stellar content).

After all, after its launch on November 1, 2019, Apple TV+ became the first all-original streaming service to launch around the world, and has premiered more original hits and received more award recognitions faster than any other streaming service in its debut. To date, Apple Original films, documentaries, and series have been honored with 280 award wins and 1,165 award nominations and counting, including rare back-to-back “Outstanding Comedy Series” Emmys for “Ted Lasso” and this year’s Best Picture Oscar for “CODA.”

An Apple TV+ ad-supported tier staying at $4.99/month with the ad-free tier going for, say, $7.99/month (less when part of Apple One) makes sense.

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