Due to rising licensing costs, Apple Inc. raised the fees for its music and TV+ services for the first time. This move could give rivals an advantage in the intensely competitive streaming market.
With immediate effect, the company raised the monthly cost of Apple Music for individuals. Hence the raise is from $9.99 to $10.99. This raise makes it more expensive than services from Spotify Technology SA and Amazon.com Inc. As a result of the announcement, Spotify experienced its most excellent intraday jump in nearly three months.
Compared to competitors like Netflix Inc., Apple will continue to charge less for its TV+ video subscription and Warner Bros. Discovery Inc. Still, that platform hasn’t attracted as many users as its competitors have. The standard Apple One package goes up $2 to $16.95, while Apple TV+ will cost $6.99 instead of $4.99.
Revenue Through Streaming of Apple
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Apple is attempting to generate service revenue through streaming as a more comprehensive strategy. From less than 10% in 2015, that segment now accounts for roughly 25% of the company’s sales. Thus nearly $20 billion in the June quarter. This week, Apple may release its most recent quarterly numbers.
The firm claims that because of “an increase in licensing costs,” artists and composers would now make more money. The encouraging news led to a 15% surge in shares of Warner Music Group Corp. Warner is a significant music company.
Additionally, Apple is raising the cost of its TV+ annual membership from $49 to $69. Also, its yearly music plan is from $99 to $109. Family-friendly Apple One bundles will now cost $22.95 instead of $19.95. while the Premier plan, which includes News+, Fitness+, and more storage with Arcade, Music, and TV+, costs $32.95.
Stock Increase of Apple
On October 24, Apple’s stock increased by less than 1% to $148.56. It lost more than 20% of the S&P 500 Index. Apple defended the TV+ price hike by claiming that the service was initially offered “at a meager price.”
Since it only included a small number of television programs and films. Even so, the service’s viewership hasn’t kept up with other significant streaming services.
As the cost and frequency of device upgrades have increased, Apple has come to rely more on services to support hardware sales. In recent years, the Cupertino, California-based business has accelerated the rollout of new digital products.
Along with the macOS Ventura update for Mac desktops and laptops, Apple also unveiled the first iteration of iPadOS on October 24. It includes the multitasking program Stage Manager. IOS 16.1 includes new features for smart homes and shared iCloud photo libraries.
The firm hasn’t been the only one to raise streaming costs. Later this year, the price of Disney+, the company’s flagship program, will increase by 38% to $11. The business is launching a new ad-supported tier at the exact $8 monthly cost as its initial offering.
It comes after an August price rise of 43% to $10 per month for its ESPN+ streaming service. Netflix, which increased its fees earlier this year, is also launching an ad-supported plan. However, at $7 per month, it will be less expensive than its current options.
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