Apple seems to really, really want people to commit to its services.
According to 9to5Mac, Apple is pushing out notifications to current and former Apple Music subscribers attempting to either reel them back into a commitment or entice their friends with the gift of a three-month free trial. Notifications can already be a minor annoyance, but as both 9to5Mac and the Verge note, Apple appears to be bending its own rules to market its service to users.
On its App Store Review Guidelines page, Apple clearly states that push notifications “should not be used for advertising, promotions, or direct marketing purposes.” Gizmodo reached out to Apple for comment and will update should the company reply.
It certainly appears that Apple is gunning hard to lure in subscribers ahead of its reported announcement of its video streaming service next month. And while it’s still somewhat unclear what that subscription service is even going to look like, it’s possible Apple will be looking to both as an opportunity to make up for its less-than-ideal smartphone sales. But that could be trouble.
Tim O’Shea, an Apple analyst for Jefferies Group, tackled this topic in an analysis reported Sunday by Business Insider. Assuming that Apple charged $15 per month for the new video streaming service—which would be roughly on par with Netflix’s 4-screen subscriber tier—and took a 30 percent per-subscriber cut with its streaming partners as has been reported, O’Shea reasoned it would be difficult for the company to see any significant returns on its product right away. Per Business Insider:
If the service is extremely successful and attracts 250 million subscribers, it would yield $13.5 billion in revenue for Apple. That’s nothing to sneeze at. After all, Netflix’s total sales last year were $15.8 billion.
But in the context of Apple, such a figure would be just a drop in the bucket. In fiscal 2018, the company posted revenue of $265 billion. Though O’Shea and other analysts expect Apple’s sales to drop sharply this year before slowly recovering in coming ones, $13.5 billion would still represent only a small fraction of the company’s revenue.
While Apple Music was an overwhelming success—possibily even surpassing Spotify as the preferred music streaming service in the U.S. and in far less time—O’Shea thinks that Apple is poised to have a tougher time with video. That’s in part because Apple is reportedly spending a whole hell of lot less than the apparent billions of dollars Netflix is pouring into original content, a key ingredient to its success.
But O’Shea also noted that demanding such a hefty cut may deter potential partners and production companies, which CNBC reported last week may be hindering Apple’s negotiations with HBO and other companies. O’Shea said that overall, even if Apple’s service offerings are booming, it may not be enough to offset its poor iPhone sales.
Ultimately, we’ll just have to wait and see what Tim Cook has up his sleeve in March. If O’Shea’s outlook proves correct and Apple struggles to gain traction with its new streaming service, we should probably get used to these promoted notifications begging us to give it a try.