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Apple looking for new revenue stream

With intense competition from device manufacturers around the world, Apple revenue fell by 4.5% in the last quarter; this has led Apple to source for new revenue streams in the service segment.

According to The Verge, Apple is in talks with global media players — Washington Postand New York Times— to provide users access to a range of publications for a single monthly subscription fee of US$10.

However, it has been reported that many news platforms are hesitating on the offer as Apple is said to have demanded 50% of the revenue. As more consumers are unwilling to pay for information, Apple’s offer remains a gateway for newscasters to reach 900 million international users.

Laura Martin, an analyst at Needhan & Co, said: “Apple’s prospects are strong as it shifts from being a product-centric company to an ecosystem.”

Martin added that Apple can count on its mass users and proven commercial appeal to position its news subscription business model.

Apple’s hunger for OTT does not stop at news.

For the first time, the subscription to OTT has climbed by 27% last year and is eclipsing cable TV subscriptions.

Apple joins ‘the streaming content arms race’, as they negotiate with premium channels HBO, Showtime, and Starz to sell each channel at a monthly rate of US$10. If the discussion materialise, Apple users will be able to watch HBO and Showtime at a discounted rate and save approximately $1-$5 each month. The new channels will be marketed along with Apple’s original content on a new TV app, which has been termed as the “Netflix Killer”.

The latest service model is deemed as a pivotal step for Apple to venture into a new market and take on the big names in the media-entertainment world — Netflix, Amazon and Walt Disney Co.

The $1-million question remains as to whether Apple will couple their devices and offer original content for free, and how it will play out with the rivals — the cat will be out of the bag during Apple’s announcement today.

Source: The Verge

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