Apple TV Plus could be the next to get an ad-based tier after Netflix, Disney and Amazon
One of the reasons I love Apple TV Plus so much is that, like the BBC channel, the only ads Apple TV Plus shows are for its own programs. It’s one of the most viewer-friendly streamers, meaning that when it dramatically raised its prices recently, it still felt better than going the ad-supported route like Netflix, Prime Video, or Disney Plus. As we reported at the time, Apple TV Plus is “one of the last bastions of ad-free, cost-effective streaming services.” But now that seems to be in danger.
According to Business insiderApple has hired a number of advertising managers. The most recent hire is NBCUniversal’s Joseph Cady, who spent 14 years at the network as executive vice president of advertising and partnerships, with responsibility for both data-driven and targeted TV advertising. Apple has also reportedly tested a new AI-powered tool, similar to the ones Meta and Google use, for optimizing App Store ads.
It’s possible that Apple, after raising prices by 31%, will look to ads to introduce a cheaper tier. But it’s also possible that Apple, like Amazon, plans to bring ads to the standard subscription level, or like Disney, considers offering a new, cheaper plan. Regardless, the approach was successful for Netflix after it reported signups increased significantly in the months following the rollout of the ad tier.
Ads sickening
I think it’s pretty clear that it’s not a question of “will Apple bring ads to Apple TV Plus?” but “when will Apple bring ads to Apple TV Plus?” And the devil is in the details of how Apple does that, because Apple TV Plus, for all its joys, doesn’t have the sheer breadth of content that rival, similarly priced streamers have – although it should be noted that it has recently licensed 50 films to add to the catalog. By removing one of the premium shelves – an ad-free experience – Apple TV Plus could no longer feel like a premium service.
I think there are three main problems with ad-funded streaming. The first is of course the advertisements. In many cases they are inserted without care, interrupting key scenes seemingly at random. The second is that the content available in ad-funded tiers is reduced, because not every rights holder wants their shows or movies to be shown alongside ads for washing powder and cashback sites. And the third is that ad-funded tiers tend to deliver a lesser experience, for example with reduced picture quality and the removal of features like Dolby Atmos.
Would Apple consider doing the same, making what is currently a premium service feel like just another ad-funded streamer? I hope not, but I’m not sure today’s Apple is as focused on the end-user experience as the Apple of the past: just open the App Store and you’ll see ads in your search results that make Apple money, but those don’t. precisely improve your search experience. And Apple has already built advertising around its sports content.
It’s long been said that Apple doesn’t need to get in the mud with rivals, because it’s not in the content business, it’s in the device business: every Apple TV Plus subscriber is a potential or actual buyer of Apple hardware, and of course Apple makes some of the best hardware margins in the industry. But it seems Apple has decided it no longer wants to think differently.