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Summary

• Apple TV stays premium and ad-free for now; Apple won’t rule out ads forever.
• Apple TV is $12.99/mo - already cheaper than some rivals; an ad tier could cut the price to $6-$7.
• Apple still treats Apple TV as a premium value-add to hardware, so it will likely add ads when expansion demands it.

As streaming services have become more expensive, they have all pivoted to a single strategy—launch a lower-priced tier that’s partially financed by showing ads to the user. One big holdout has been Apple TV. And for now, it looks like this will continue to be the case, though Apple is not fully shutting the door on it either.

Apple’s head of services, Eddy Cue, recently confirmed the company is sticking to its premium, subscription-only model for Apple TV, with no ad-supported tier being developed right this instant. The executive is not closing the door on it, adding that “I don’t want to say no forever,” but at this time, it looks like Apple is holding its ground and not adding an ad-supported tier to its service right now. As a reminder, Apple TV right now costs $12.99 a month, so it’s already considerably cheaper than some of its competitors, and it’s priced competitively even compared with some ad-supported plans on some streaming services. An ad-supported tier could bring the price down to $6 or $7.

In the case of Netflix, its ad-supported tier now accounts for over 50% of all new sign-ups in the markets where it’s available. The move has been so successful that Netflix has even developed its own ad platform. And of course, this model has been imitated by pretty much every streaming service, including Amazon Prime Video, Disney+, and many more. Ads are an important part of a streaming platform’s business model at this point, and streaming services without ad-supported subscriptions are now the exception, not the norm. This makes Apple’s approach especially unique.

In the case of Apple, though, part of it is probably the fact that the company feels like it doesn’t need it. The company’s main business is still selling high-margin hardware like iPhones, iPads, and Macs. Apple TV, then, remains more of a “value-add”—a glossy, premium perk to justify the high price of its devices and lock users deeper into its ecosystem of services. It’s available on other devices (it even recently rolled out to Android), and Apple does invest in in-house content for the platform, such as Ted Lasso and Severance, but it ultimately remains a bit of a hobby for the company that’s very low in its list of income sources. It’s not in any particular rush to win the streaming wars, and introducing ads could be seen as diluting the premium, curated brand image that Apple has meticulously crafted over decades.

The door is still open to adding ads in the future, but Apple might choose to do this when it starts catching on more on non-Apple devices, such as Android phones or Google-powered TVs.

Source: Screen International (magazine) via The Verge