Since Apple (AAPL) first announced its big push into original programming at a star-studded event in March, questions have followed. Wells Fargo wrote in March that the event “leaves us/investors with more questions than answers.”
On Tuesday at its big event in Cupertino, Calif., Apple gave some answers.
Apple TV+ will launch on Nov. 1 at a cost of $4.99 per month. “The price of a single movie rental,” Apple CEO Tim Cook said on stage. “This is crazy!”
The low price clearly aims to undercut Netflix and Disney’s forthcoming Disney+ service, and shares of Netflix and Disney both dropped on the news.
Prior to Tuesday’s event, Apple had released just three trailers for some of its biggest original shows: “The Morning Show” with Jennifer Aniston and Steve Carell, “Dickinson” starring Hailee Steinfeld as the poet Emily Dickinson, and “For All Mankind,” an alternate history about the space race.
“The reaction to these trailers has been incredible,” Cook said on Tuesday. “They’ve been viewed over a hundred million times.”
On stage on Tuesday, Cook introduced a new trailer for a fourth original show: “See,” starring Jason Momoa of “Aquaman” and “Game of Thrones” fame.
Cook also said Apple will begin offering a free one-year subscription to Apple TV+ with the purchase of any new iPhone, iPad, or Mac.
To be sure, even with a slew of expensive originals, analysts had doubts the service can be an instant hit. Nomura, in a note in March, correctly predicted that pricing would have to be low “given the small content library at launch,” and added, “If Apple is playing the long game here it could pressure financials for years.”
But not many people predicted a price as low as $4.99. That will surely put pressure on Netflix, which recently raised its base price, and on Disney+, which launches Nov. 12 at $6.99 per month.
Unless Disney changes its plan, Apple will get nearly two weeks lead time and is $2 cheaper. But Disney and Marvel have spent the summer announcing such a vast raft of exclusive shows and movies for Disney+ that analysts are extremely bullish on the service.
Much has been made of the supposed battle for subs between those three services (not to mention existing and forthcoming offerings from CBS, HBO, and NBCUniversal) but recent surveys actually suggest that consumers are still willing to add more subscription services before they get to a point where they begin cutting.
Apple does not have a stellar track record so far with original television. Its first attempt, “Planet of the Apps,” a tech competition show judged by Jessica Alba, Gwyneth Paltrow, Will.i.am, and Gary Vaynerchuk, was canceled after 10 episodes. “Carpool Karaoke: The Series,” a spin-off of the popular recurring segments from “The Late Late Show with James Corden” (without Corden), lasted two seasons but was panned by critics.
Daniel Roberts is a senior writer at Yahoo Finance and closely covers streaming tech. Follow him on Twitter at @readDanwrite.