Why Is Apple Offering Free Original Content to Its Device Users?
Apple is set to introduce a new pre-installed service within its TV app, showcasing exclusive original content alongside subscriptions to leading streaming platforms. What’s the strategy behind this move?
Apple Inc. (AAPL) is making a bold move to transform the TV experience across its devices.
As reported by CNBC, Apple plans to integrate a “pre-installed” service directly into the TV app on devices like the iPhone, iPad, and Apple TV. This service will blend Apple’s own original programming with subscription options for popular streaming platforms such as HBO and Starz. The goal is to create a seamless, all-in-one destination where users can easily access diverse content without juggling multiple apps.
This year, Apple is investing $1 billion in original content and has enlisted top-tier talent including Steven Spielberg, Oprah Winfrey, and Reese Witherspoon to star in or direct exclusive shows. According to an April Wall Street Journal report, Apple is positioning this service as family-friendly, steering clear of the edgier content typical of many other streaming platforms.
While earlier speculation suggested a $15 subscription fee, CNBC reveals that Apple’s own content will be offered free of charge. In comparison, Netflix Inc. (NFLX) employs a tiered pricing model ranging from $7.99 to $13.99, and Amazon.com Inc. (AMZN) provides a similar service free to its Prime members. (See also: Apple Considers Streaming TV Bundle).
Apple has been eyeing a TV service on its devices for over a decade, but content providers have been hesitant to fully commit. The company’s past disruption of the music industry—breaking down albums into individual $0.99 tracks—has made studios wary of a similar impact on television, which could threaten traditional cable networks.
The Smart Strategy
Apple’s push into TV services aligns with its broader shift toward becoming a services-focused company. CEO Tim Cook has highlighted the growing contribution of services revenue in recent earnings calls.
Industry analysts praise Apple’s approach. Gene Munster of Loup Ventures calls it the “right strategy” for several reasons: it leverages Apple’s vast user base of over 1 billion devices to boost content awareness; it helps attract and retain users on Apple hardware; it increases engagement with the TV app; and it builds a loyal audience that can be monetized through paid features and additional services, driving revenue growth in Apple’s services segment.
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