Apple belatedly jumps into the streaming TV business
By MICHAEL LIEDTKE and TALI ARBEL
AP Technology Writers
Tuesday, March 26
CUPERTINO, California (AP) — Jumping belatedly into a business dominated by Netflix and Amazon, Apple announced its own TV and movie streaming service Monday, enlisting such superstars as Oprah Winfrey, Jennifer Aniston and Steven Spielberg to try to overcome its rivals’ head start.
Apple didn’t disclose the price or the launch date except to say that Apple TV Plus will be available this fall. It will feature Apple’s original shows and movies.
The company also unveiled a news subscription service that will give customers access to roughly 300 magazines and a few major newspapers for $10 a month. And it announced a new branded credit card.
The video-streaming venture is fraught with risk for a company scrambling to diversify beyond its star product, the iPhone, whose sales have started to decline. Netflix, which started its streaming service in 2007, has 139 million subscribers worldwide.
But Apple has lots of money, more than 900 million active iPhones, and a track record for innovation that has enabled it to overtake its rivals, even when it enters a business late, as it did with smartphones, tablets and smartwatches.
In the past, of course, Apple has mostly jumped into relatively small and undeveloped markets. Streaming video, by contrast, is dominated by huge services like Netflix, Amazon and Hulu, with more seeming to be bowing into the competition daily, including AT&T’s WarnerMedia, Disney and Comcast.
“Great competitors make for great consumer experiences,” Netflix said in a statement. Netflix stock rose $5.22 to $366.23 Monday. Apple’s stock fell $2.31 to $188.74.
Among the upcoming programs on the new Apple service will be Winfrey-created documentaries; a show about TV morning talk shows, starring Aniston, Reese Witherspoon and Steve Carell; a futuristic drama starting Momoa; and a sci-fi show called “Amazing Stories” from Spielberg.
Apple TV Plus will be featured in the existing Apple TV app, which brings together different streaming services such as HBO and Showtime and traditional cable subscriptions.
Video will be delivered to iPhones and iPads, Apple’s own Apple TV device, smart TVs and, soon, streaming gadgets from Roku and Amazon.
Netflix, which isn’t included in the Apple TV app, has turned “binge watching” into a worldwide phenomenon become a powerhouse in both Silicon Valley and Hollywood since it shifted its emphasis on original programming in 2013.
Apple was long focused on making on gadgets: iPhones, iPads, computers. Apple co-founder Steve Jobs toyed with the idea of building a powerful TV business but couldn’t pull it off before his death in 2011. It has taken his successor, CEO Tim Cook, nearly eight years to draw up the plan the company will now try to execute.
“Apple is very late to this game,” eMarketer analyst Paul Verna said. “Netflix has become the gold standard in how to create and distribute content, using all the data they have about their viewers.”
Industry analyst Colin Gillis of Chatham Road Partners said Apple TV Plus is “not going to be a Netflix killer.” And Martin Garner of CCS Insights said the service so far lacks “the full range and diversity of content available through Netflix, Amazon and others.”
Several analysts, however, warned not to count Apple out.
Apple has reportedly spent more than $1 billion on its original TV shows and movies — far less than Netflix and HBO spend every year. It has plenty of money to spend, though, with about $245 billion in cash and marketable securities.
As part of its effort to catch up, Apple hired two longtime Sony television executives in 2017. They have signed up stars such as Spielberg, Ron Howard and Sofia Coppola.
Winfrey received a standing ovation during her appearance at Apple’s announcement Monday in Cupertino.
“I’m joining forces with Apple,” she said. “They’re in a billion pockets, y’all.”
Apple News Plus, the news subscription service, will include such major papers as The Wall Street Journal and the Los Angeles Times. Other major newspaper publishers have reportedly been wary of Apple’s terms.
The Journal will feature general-interest articles, not its entire slate of stories, although Apple said any article the Journal publishes could be searched for on the Apple app.
Apple said advertisers won’t track readers inside the app. That will distinguish it from Facebook and Google, the other major online news hubs.
The company’s new Mastercard credit card, called Apple Card, won’t have any late fees or annual fees and will offer 2 percent cash back.
Arbel reported from New York.
Apple tries to take a bite out of credit card industry
By SARAH SKIDMORE SELL
AP Personal Finance Writer
Wednesday, March 27
Apple is rolling out a credit card that it says is designed to do things no other card can. So how does it actually stack up?
It looks different from a traditional credit card — there’s no number on the front and the users’ name is etched in metal. The card expands the company’s digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. And it comes with a bevy of perks — quick sign-up, elimination of most fees, strong security protections and cash back. But industry experts say they aren’t impressed — the financial benefits mirror many of those already out there for consumers.
WHAT DOES IT COST?
Apple says there are no fees associated with the card. That means no late fee, no annual fee, no international fee and no over-the-limit fees. It also said it aims to have among the lowest interest rates in the industry. Users must have an iPhone to use the card, which comes at a cost. But they will earn cash back on their purchases — 3 percent on Apple purchases, 2 percent on those with the virtual card and 1 percent with the physical card.
“I’m underwhelmed,” said Ted Rossman, industry analyst at Creditcards.com. “People will sign up for it, but that will be mostly because they love Apple, not because this card is better than anything that already exists.”
He points to the Citi Double Cash card, which offers an easy-to-use 2 percent back on any purchase. Or the U.S. Bank Altitude Reserve Visa Infinite card, which offers 3 points per dollar on mobile-wallet spending —worth 3 percent cash back or 4.5 percent off travel. Rossman said even another branded credit card, the Uber Visa card, comes out on top with 4 percent cash back on dining purchases.
Apple points out that it is the only card to provide those rewards in real time, so that cash earned can be used immediately. Other companies often make users wait a statement cycle or until the bill has been paid. But WalletHub CEO Odysseas Papadimitriou is dubious people who can afford an iPhone and qualify for the card will need that cash so quickly. He also reiterated that there are better rewards out there, particularly for people with strong credit.
“There are other cards that have better rewards and no annual fee,” he said. “There is a healthy market there, so from that perspective there is nothing unique.”
A note on the interest rates as well — the card doesn’t come out until summer but Apple has said that as of March, the variable annual percentage rate on the card could be anywhere from 13.24 percent to 24.24 percent based on creditworthiness. That’s right in line with the rest of the market, Rossman said.
WHAT ABOUT SECURITY?
Apple prides itself on privacy and security, so no surprise, the card sets itself apart here.
The physical card has no numbers so purchases are made with the embedded chip and the digital version lives in your Apple Wallet on your phone, where it’s protected by fingerprints or facial recognition. That means that even if someone steals your phone, they won’t be able to use the card to buy things.
Apple says it won’t get information on what you buy with the card or where or for how much. And it says Goldman Sachs, which Apple is working with to provide the card, will use your data only to operate the card — such as help with purchases or fraud protection — but your Apple Card data will not be used for any other purposes.
Even critics concede that the Apple Card technology provides a new layer of protection not available with other cards. And mobile payments, such as Apple Pay, are generally more secure than traditional credit cards.
However, consumers already have zero fraud liability with credit cards, said Papadimitriou. Federal law limits a consumer’s fraud liability to $50 but all the major credit card networks — Visa, Discover, American Express and Mastercard — provide zero liability for consumer cards. Apple is working with Mastercard to create the Apple Card. So, he said, the added protection may be more perception than reality for most.
HOW EASY IS IT TO USE?
Apple says users will be able to sign up for the card in the Wallet app on their iPhone and begin using it almost immediately. It also tracks spending on the phone in a more user-friendly format, eliminating some of the gibberish that fills a traditional credit card statement.
It also includes some budgeting tools, such as tracking spending and providing estimates of how much interest could be charged on a purchase to help people make an informed decision. It allows users to set up weekly or biweekly payments to better match up with their paychecks. While these perks are nice, there are similar budgeting tools on other cards and the information only incorporates purchases and payments for Apple Pay and the Apple Card, so it’s not providing a full financial picture. All the same, Apple users often enjoy the seamlessness of having the information at their fingertips.
There is still some sense of wait-and-see, as the power of the Apple brand and its fan base is strong. In general, though, credit card industry experts say this is a bid by Apple to expand its Apple Pay services. While Apple Pay is the most common of mobile-wallet payment services, only 13 percent of smartphone users have tried it, according to industry tracking site PYMNTS.com.
“Apple makes great software, but I’m not sure they truly understand consumer needs on this,” Papadimitriou said.
If you have personal finance questions, we want to hear them. Email the AP at apmoneyap.org.
Follow Sarah Skidmore Sell on Twitter sarahssell
Apple’s foray into video shows limits to tech growth
By MATT O’BRIEN
AP Technology Writer
Wednesday, March 27
Apple’s latest move into streaming video illustrates an escalating trend: Tech’s biggest companies, faced with limits to their growth, are encroaching on each other’s turf.
Apple is taking on Netflix. Facebook is edging into Amazon’s sphere with its e-commerce plans. Google, which has already challenged Amazon and Microsoft in cloud computing, is launching an online game service that could undercut the lucrative game-console business at Microsoft and Sony.
Apple, which is also launching a gaming service and introducing its own credit card, may be veering the most outside its comfort zone, technology industry analyst Rob Enderle said.
“This is an awful lot of breadth really quickly for a company that hasn’t been known for being great at breadth,” Enderle said. “This is much more diversity than Apple’s ever had.”
Before, when the company’s product suite grew too varied, “what Steve Jobs did with Apple was, he made the company focus,” Enderle said.
These are different times, however, and Apple may have decided that it doesn’t have much choice amid declining sales of its premier product, the iPhone.
“They have kind of bled the device market dry,” said Sally Edgar, of UK-based technology consultancy Waterstons. “Companies will increasingly be about subscription services. I think they have to do it to survive.”
Tech companies, of course, have explored new markets and fought turf battles over them for years.
Facebook and Google have long scrapped over digital ads. Google and Amazon are battling it out over voice assistants in the home. Google and Microsoft have competing search engines. And Apple and Google have waged an epic smartphone battle for roughly a decade.
But longtime tech industry analyst Tim Bajarin sees new urgency in the latest push into streaming services and other businesses that bring in continuous flows of money — not just when consumers make big investments in new phones or other hardware.
“It’s just becoming clearer today that the only way a company is going to grow is by adding a recurring revenue model,” Bajarin said. “Apple is becoming an aggregator of content. They now have multiple services that will help them grow their bottom line.”
Enderle said Apple is still in the “honeymoon phase” after a Monday announcement at its Cupertino, California, headquarters. Apple brought out new A-list entertainment partners such as Oprah Winfrey and Steven Spielberg and video game partners such as the creators of “SimCity” and the “Final Fantasy” series. What happens next may be harder for the company to manage.
“It always looks great on the front end and then you have to execute,” he said.
Beyond ‘Bandersnatch,’ the future of interactive TV is bright
March 27, 2019
Author: David Schwartz, Associate Professor of Interactive Games and Media, Rochester Institute of Technology
Disclosure statement: David Schwartz receives funding from the National Science Foundation (nsf.gov).
Partners: Rochester Institute of Technology provides funding as a member of The Conversation US.
Make a choice: Do you want to engage with your media passively or actively?
The December 2018 premiere of Netflix’s “Black Mirror: Bandersnatch” offered consumers a new way to influence the entertainment they’re watching. Netflix has a growing list of choose-your-own-adventure movies. What viewers might see as a simple choice, such as which breakfast cereal a character begins the day with, could affect the whole show’s storyline. There are other choices to make as well – some of which change the plot, and some of which may not.
Viewers aren’t watching these interactive films just once. Rather, they are watching them over and over again to find each ending and post maps of the diverging plot lines. I think I sat on my couch for nearly three hours straight trying to exhaust all of “Bandersnatch’s” choices as it followed a programmer and designer through the process of game development.
I’ve been teaching and researching game design and development since 2001. I see this type of experience not as just the future of entertainment, but as the expansion of a standard method of storytelling that game designers have been using for decades. Netflix is introducing new technology and new audiences to this type of entertainment, but fiction writers have been exploring similar themes for far longer, creating stories of time travel and alternative realities that let people fantasize about redoing decisions in life.
Controlling your own destiny
There is a kind of game made popular by “Dungeons & Dragons” that provides a way to understand and expand what “Bandersnatch” explores. Role-playing games let players pick characters with multiple traits, such as strength, health and special skills, and work together to achieve story-driven goals.
Fans of “The Lord of the Rings” books and movies will recognize the idea of a team of characters with different backgrounds, abilities and motivations, all trying to work together toward a goal. The adventure is not just in whether they achieve the task, but the encounters, mishaps and even battles that happen along the way. The ultimate outcome depends on the choices players make along the way.
Role-playing games started with players gathered around a table, keeping notes on paper and rolling dice to incorporate the role of chance and probability into the adventure. A human game master coordinated everything, keeping track of what was happening and working with players to advance their stories and the overall plot of the adventure.
Early computer games, such as the 1980s-era Infocom text adventures, turned the role of game master over to a game designer, who controlled the choices and their consequences. In the decades since, more powerful computers have let modern digital games offer a great many choices. Teachers have begun to use elements of role-playing games to help students learn.
Illusion of choice
With “Bandersnatch,” Netflix used software to process viewers’ choices and deliver the appropriate video. When watching and “playing,” I wondered if there were too few choices. The show offered only two choices of breakfast cereal, and the viewer couldn’t choose to skip breakfast, make eggs or open the freezer to grab some ice cream. But, there’s a very good reason for these constraints.
I often tell my students that when they’re creating role-playing games, the problem isn’t giving players choices: It’s deciding what happens next. Giving players lots of options is great, and fun – but with every choice the job gets harder. If there are three kinds of ice cream in the freezer, that’s three different sets of video to show vanilla, chocolate and strawberry – and possibly three different scripts, if the choice actually has consequences.
In game design, we call this a “branching narrative,” where every choice spawns as many new branches as there are options, and the tree gets bigger and bigger all the time. A movie with an enormous number of options would require multiple sets, extra time for actors, huge amounts of special effects work, extended production times and increasing budgets.
Such a complex film would also take viewers huge amounts of time to experience. Digital game players can handle this sort of effort by saving their progress and taking a break, returning to resume play hours later, or even days.
With an interactive movie, would a viewer want several days’ worth of watching? I don’t know if anyone has an idea of how long a typical interactive movie experience should last. My three hours on the couch watching “Bandersnatch” seemed about right – and ran through most of the options.
The Netflix producers borrowed from game designers, and the classic “Choose Your Own Adventure” book series, to give viewers the illusion of choices when really the alternatives were limited. My own research recommended the same technique: Allow the players some choices, but bring them back to the main narrative thread at key points.
Future of interactive media
There will be more interactive movies. Netflix has built its own software for “Bandersnatch,” which it can use for other stories too. There are already several addictive interactive kids’ shows, including “Puss in Book: Trapped in an Epic Tale,” “Buddy Thunderstruck: The Maybe Pile” and “Stretch Armstrong: The Breakout.”
Gamers are already familiar with this convergence of film, interactivity and branching narrative. Cinematic video games, like “Indigo Prophecy” and “Heavy Rain,” let players make choices in dialog and other cinematic aspects, all of which alter the endings. An academically published game, “Façade,” is considered important not just for showing that scholarly games can be fun to play, but also demonstrating that academic concepts of branching narrative and story can create meaningful play: The player visits a couple’s apartment, and depending on where the player moves and what the player says, the couple reacts in different ways.
I anticipate different genres of shows will explore interactive formats. Imagine playing through historical fiction where you can choose to execute Marie Antoinette or not. I also expect viewers will be able to make their choices in different ways than just pressing buttons on their remotes – perhaps by using voice recognition on their phones.
If artificial intelligence and machine learning systems get better at telling stories, viewers might even be able to suggest new possible choices, with the resulting content generated on the fly while people watch. Of course, there’s a strong overlap with virtual reality, offering immersive escapism, which is, in my experience, a key goal of interactivity.
In the meantime, “Bandersnatch” fans who want to continue exploring choosing their own adventures to direct a story can look for local gaming groups and game stores. “Dungeons & Dragons” and “HackMaster” are regaining popularity lately. So is live-action role-playing, in which people physically act out their fictional encounters. In these environments, players can ask “what if” without running into the limitations of software development and movie production teams. Human players can engage in the full extent of their imagination without any illusion of choice.
Joe Dirk: It’s about time! I grew up playing D&D and reading the impossible to solve Choose Your Own Adventure books. (The original author tried to sue Netflix over their movie technology).
I like movies when I am completely mentally worn out, but otherwise computer games are my entertainment of choice. These days a good game is like an incredibly complex Choose Your Own Adventure. As technology grows merging entertainment types is going to be the future. Just wait until we perfect virtual reality with other senses than just the eyes!
Simple movies and books will go the way of stereo-optics of yesteryear. Exciting, and engaging, times are ahead!