Interview, Fireside Chat
a16z Podcast | How Many Taps in the Apple (Plus) Tree?
- Apple expects to charge approximately $100 per month for subscriptions soon and may price Apple TV Plus between $10 and $15, while Game Center is projected to cost around $10 monthly.
- Services including TV Plus, News Plus, and Game Center will initially launch in a limited, piecemeal fashion, potentially reaching 100 countries, before broader global expansion.
- Apple plans to aggregate 300 magazines for News Plus at $10 a month and create a unified TV interface that integrates third-party apps and cable subscriptions on various smart TV brands.
- The company intends to prioritize high-end markets where users already spend money, avoiding the super-budget smartphone segment, without needing to reach 900 million users per service to achieve profitability.
- Apple will position its content and services as private and human-curated, adhering to a "family-friendly" stance that may diverge from industry trends toward edgier content, potentially focusing on talent like Steven Spielberg and Oprah Winfrey.
- Revenue models include maintaining the App Store's 30% fee on 800 million iPhones and over a billion iOS devices, while publishers may cede customer ownership to Apple in exchange for a 50% revenue split.
- Financial tools like the Apple Card and Apple Cash will integrate to allow bill payments and family management features, such as spending limits and cash transfers for children, without immediate bundling into a single mega-package.
- Apple will avoid acquiring record labels, telcos, banks, or book publishers, instead relying on existing services to increase ecosystem stickiness and will likely continue providing OS upgrades for free.
- Apple intends to maintain separate product-market fit for News, TV Plus, and credit cards initially, rejecting bundled subscriptions like a $200 monthly package including free hardware to preserve customer choice.
- Risks and unknowns include the specific volume of content and spending amounts for Apple TV Plus compared to competitors like Netflix, alongside potential synchronization challenges during the staggered rollout.
- Apple aims to secure market share by avoiding manipulative game mechanics like loot boxes and offering superior gaming experiences on iOS compared to Android to appeal to parents.