Re:The iPhone and Apple's Services Strategy
by ksec on Thursday September 12, 2019 @08:58AM
(#20950887)
Fix Cost in the sense that it likely doesn't go up with more players. Apple are like the Game Publisher here where they pay a specific price for games from Studio. And remember all these games are exclusive to Apple Arcade.
You see comments questioning whether this is fair. And of course it is, Gaming Business are quite risky, Out of 10 games you could have one Game that makes all the money while the other 9 have millions throw out of window. Apple is letting these developers avoiding those risk for a likely fixed up front price and terms.
And it is the same with Apple TV+, all the shows are Apple Exclusive, it doesn't matter if they have Zero viewership. Apple has already paid for it.
This is compared to Apple Music, where Apple have to paid for every song streamed. And it is not a fixed cost.
I sort of disagree about "Pure Profits" from Services like Apple TV+. Name me one of these business that is even profitable, especially when you are looking ahead with Disney+. The Roku platform examples completely ignore they sell data to advertiser.
Apple is using this to dilute their profits margin from Services, or add value to their Active Users. Both the App Store and Google Search Engine Placement revenue has close to 100% margin. Something you don't want to show up in your quarterly report. By having Apple Music, Apple TV+, Apple News that operate at close to 0% margin, Apple manage to make that 100% margin down to ~50%. And it will be another moat in their ecosystem, who wants to enter a business, News, Music, or TV when there are no money to be made?
You see comments questioning whether this is fair. And of course it is, Gaming Business are quite risky, Out of 10 games you could have one Game that makes all the money while the other 9 have millions throw out of window. Apple is letting these developers avoiding those risk for a likely fixed up front price and terms.
And it is the same with Apple TV+, all the shows are Apple Exclusive, it doesn't matter if they have Zero viewership. Apple has already paid for it.
This is compared to Apple Music, where Apple have to paid for every song streamed. And it is not a fixed cost.
I sort of disagree about "Pure Profits" from Services like Apple TV+. Name me one of these business that is even profitable, especially when you are looking ahead with Disney+. The Roku platform examples completely ignore they sell data to advertiser.
Apple is using this to dilute their profits margin from Services, or add value to their Active Users. Both the App Store and Google Search Engine Placement revenue has close to 100% margin. Something you don't want to show up in your quarterly report. By having Apple Music, Apple TV+, Apple News that operate at close to 0% margin, Apple manage to make that 100% margin down to ~50%. And it will be another moat in their ecosystem, who wants to enter a business, News, Music, or TV when there are no money to be made?