Editor’s Desk: Apple TV+’s big wins and Apple Music’s revenue flip

apple tv+

This week Apple TV+ made news for signing HBO’s former CEO and his new production company in a five-year exclusive deal. As Apple’s star begins to ascend in streaming video content, a former Apple Music exec sees scalability limits in its future.

Apple TV+ had its weakest week of new content since its launch. It’s a pretty weird time for Apple to go easy on Apple TV+, given the number of new Apple devices activated over the holidays – all of them eligible for free Apple TV+, and presumably with a lot of new eyes on the service.

Either Apple figures the content they’ve already posted is still sufficient for all these new eyes or the company knows that they still have time to ramp up the value of the free year of service before bills end up in customers’ hands.

Another big win for Apple TV+

Apple TV+ isn’t just coasting into 2020, this momentary blip aside. In fact, Apple signed for HBO CEO Richard Plepler to an exclusive five-year deal, according to a report in the New York Times. News that Plepler and Apple were talking first emerged in November.

Under Plepler’s leadership, HBO produced series including Game of Thrones, True Blood, and The Newsroom. He left HBO in early 2019 after nearly 28 years – shortly after AT&T bought the network. Plepler and his company Eden Productions will be producing new documentaries, dramas, and feature films for Apple TV+. It’s the latest win for Apple, which has struck content deals with major players like Oprah Winfrey and Alfonso Cuarón.

Tonight we’ll see if the Apple TV+’s drama The Morning Show can win a Golden Globe award – Apple has aggressively courted Hollywood critics to get some acclaim for its new efforts.

Flipping music revenue on its head

It’s an interesting contrast to recent comments from Jimmy Iovine. The music mogul worked for Apple until 2018. In a recent interview with the New York Times Iovine talked about the problem with music streaming services, including Apple Music. Iovine sees music services as undifferentiated utilities selling a commodity. Iovine also cites limited scalability as an issue that music services have to content with.

That limited scalability isn’t stopping Apple and others from making money in 2019 and 2020. Steve Jobs once said that consumers wanted to own their music, but his time passed the better part of a decade ago. And in that decade we’ve seen the personal ownership of music flip on its head. 80% of the recorded music revenue in the United States last year came from streaming services like Apple Music, Spotify, Amazon Music, and others, according to the Recording Industry Association of America (RIAA).

That’s compared to 7% just a decade ago, long before the inception of Apple Music and before Spotify was even available for U.S. customers. By the time Apple finally entered the streaming music market in 2015, revenue from digital music and single downloads from services like iTunes was already on the wane.

As a long time consumer of music who still has his original audio CDs in basement crates, I still have a strong place in my heart for the ownership of content I like. I still buy the occasional Blu-ray disc of a movie I want, too. But for the most part, I’m content to rent my content, just like most folks.

There’s just so much these days to stay on top of, it’s almost impossible to connect with the material in the way I used to, when I’d watch a movie over and over again or I’d listen to an audio CD from the first to the last track.

So in the scheme of things, perhaps it’s not so bad that Apple TV+ only had 74 minutes of new content last week. There have been some interesting new releases on Netflix, Amazon Prime, and the other services we catch our content from these days – with lots more planned from everyone throughout 2020 and beyond.