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One of the reasons I love Apple TV Plus so much is that, like the BBC broadcaster, the only ads it runs are those for its own programmes. It’s one of the most viewer-friendly streamers, which means when it recently hiked its prices dramatically that still felt better than going down 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 appears to be under threat.
According to Business Insider, Apple has recruited a number of ad execs. Its most recent hire is NBCUniversal’s Joseph Cady, who was with the network for 14 years as the executive vice-president of advertising and partnerships with responsibility for both data-driven and targeted TV advertising. Apple has also reportedly been testing a new AI-powered tool, similar to one that Meta and Google utilize, for optimizing App Store ads.
It’s possible that after upping its prices by 31%, Apple may be looking at ads to introduce a lower-priced tier. But it’s also possible that like Amazon, Apple intends to bring ads to its standard subscription tier or like Disney, that it’s thinking of offering a new cheaper subscription. Either way, the approach was successful for Netflix after it reported that sign ups jumped considerably in the months following its ads tier rollout.
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I think it’s pretty clear that it’s not a case of “will Apple bring ads to Apple TV Plus?” but “when will Apple bring ads to Apple TV Plus?” And the devil is going to be in the detail 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 do – although it has to be noted that it did recently licensed 50 movies to be added to its catalog. By removing one of the premium planks – an ad-free experience – Apple TV Plus could stop feeling like a premium service.
I think there are three key issues with ad-funded streaming. The first, of course, is the ads. In many cases they’re inserted without care, interrupting key scenes apparently at random. The second is that the available content in ad-funded tiers is reduced, because not every rights owner wants their shows or movies to be shown alongside ads for washing powder and cashback sites. And the third is that ad-funded tiers typically deliver a lesser experience, for example with reduced picture quality and the removal of features such as Dolby Atmos.
Would Apple consider doing that too, taking what is currently a premium service and making it 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 old: just open the App Store and you’ll see ads in your search results that make Apple money but that don’t exactly improve your search experience. And Apple has already built ads around its sporting content.
It’s long been said that Apple doesn’t need to get down in the dirt with rivals because it isn’t in the content business but the device business: every Apple TV Plus subscriber is a potential or actual Apple hardware purchaser, and of course Apple makes some of the best hardware margins in the business. But it looks like Apple has decided that it no longer wants to Think Different after all.
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