SECTOR FOCUS Digital Media: Apple’s new core business?
Apple has long ceased to be a company that only sold computers and smartphones. With the launch of iTunes in 2001, Apple began to dabble in the content business. Two decades later, its music, podcasts and TV apps are a central part of the Apple ecosystem, with its books and aggregated information services also playing a growing role in the company’s fortunes.
When it first launched, Apple’s iTunes was primarily a simple and revolutionary music player and computer browser. As the use of digital media has grown, iTunes has evolved into a media content manager, and Apple has increasingly focused on media content, especially based on subscription models.
In 2015, Apple launched Apple Music, a music and video service that reflected consumers’ shift to streaming rather than downloading files. In 2021, Apple Music had 98 million subscribers, generating $4.1 billion in revenue in 2020, or 7.6% of Apple’s total service revenue.
In electronic publishing, Apple’s book service and its News+ offering together have around 125 million users, with some 112 million subscribers to paid news. That makes its electronic publishing arm something of a dark horse in the business, overtaking users of its more widely distributed Apple TV+ streaming service.
In fact, Apple’s game in the VOD market is still in a nascent phase, with around 75 million users worldwide, 50 million of whom access the service through some sort of promotion.
Despite these numbers and despite aggressive marketing, Apple hasn’t done things its way. Spotify continues to be more popular than Apple Music in Europe, for example.
Looking through Apple’s wider media offering, it feels like competitors have often taken a back seat to the company. In the UK, the Apple TV+ service costs £4.99 per month and while shows such as Ted Lasso and For All Mankind have been hits, it has yet to give the world a hit show like Netflix’s The Crown or Stranger Things. In short, Apple has yet to prove that it has the content business under control, so far as its Apple TV hardware regularly draws rave reviews, although technologies such as Amazon’s Firestick and the growing number of smart TVs on the market give him a run for his money.
Learn more in the RetailX Digital Media Sector report