Details about Apple's new video play, to be revealed on Monday, are scarce, but one cat's already out of the bag: Netflix won't be joining the party.
Confirming a rumor that began swirling last month, Netflix CEO Reed Hastings said at a press event Monday that the OTT subscription giant will not be part of Apple's new offering.
"We prefer to let our customers watch our content on our service," Hastings told reporters Monday at Netflix's offices in Hollywood, according to Reuters. "We have chosen not to integrate with their service."
Specifics about Apple's new offering will be revealed on March 25. It reportedly will be a video aggregation service that provides free access to Apple's coming slate of original programming as well as easy access to a variety of integrated subscription-based OTT offerings. That's an approach that appears to follow Amazon Channels, the SVoD aggregation service of Amazon Prime, as well as The Roku Channel, which now features free, ad-based movies and TV shows alongside tight tie-ins with dozens of subscription-based video services.
In a blog item posted Monday, BTIG analyst Richard Greenfield said Apple's revised plan with its "TV" app is to disaggregate content from the individual apps. Rather than deep-linking users to apps like HBO Now as Apple does today with its TV app, "[w]e believe the goal of the new TV app experience is for you to watch directly within Apple's app without ever leaving."
He said the desire for control of the user experience within their own apps is a key reason why this disaggregation approach might not suit popular OTT services such as Netflix, Hulu and Amazon Prime Video. Greenfield said this also raises the question as to how Apple can hope to offer a "comprehensive video experience" without those three players (and possibly others)? Without those services in the mix, Apple's new offering could be hobbled as it leaves the starting gate. "Will they [Apple] agree to deep-link out to these apps (think how Comcast's X1 deep links into Netflix) or will they simply not offer that content within the TV app experience?," Greenfield asks. If that's the case, expect those details to come to light on March 25.
Netflix's absence from Apple's new video offering also amplifies the tensions brewing between the two companies.
Netflix was also a no-show on the "TV" app that Apple launched in late 2016 for the iPhone, iPad and Apple TV. Of more recent note, Apple and Netflix will become more competitive just from the fact that Apple is getting into original content that could draw eyeballs away from Netflix and other video streaming services. Earlier this year, Netflix went global with a policy that bypasses Apple's App Store and, thus, enables the OTT service to avoid Apple's 30% tax on in-app purchases. One reported estimate holds that Apple is losing between $350,000 to $700,000 per day in iOS revenue because of Netflix's move to redirect customers to a mobile browser to sign-up for the Netflix app.
At Monday's press event, Hastings also addressed the coming wave of competition coming from other direct-to-consumer streaming services from well-known and deep-pocketed brands such as Disney and WarnerMedia. The big challenge is to avoid getting "too distracted" by the competition.
"These are amazing, large, well-funded companies with very significant efforts," he said. "They are going to do some great shows. I'm going to be envious. They're going to come up with some great ideas. We're going to want to borrow those."
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— Jeff Baumgartner, Senior Editor, Light Reading