Last week Patently Apple posted a report about Jim Cramer doubling down on Apple's rising services business. In that report I pointed to the ignorance of a statement made by Erik Gordon, a professor at the University of Michigan Ross School of Business. Mr. Gordon stated that "Apple plans to spend $1 billion developing original video content, although it doesn't charge for its shows on its Apple TV device." I pointed out that Apple would most definitely be charging a fee for their future service and and not be free as assumed by Mr. Gordon. Today, Bloomberg confirms Apple's new service will be subscription based.
Bloomberg reports this afternoon that Apple's plan to reinvent cable TV is starting to look a lot like the strategy of its rival Amazon. For the first time, Apple plans to begin selling subscriptions to certain video services directly via its TV app, rather than asking users to subscribe to them through apps individually downloaded from the App Store, according to people familiar with the matter.
This would simplify the process and bolster Apple's TV app on Apple TV, iPhones and iPads, making it a central place for people to find, watch, and buy content. It would also be another way for Apple to keep boosting its services business, which it expects to generate $50 billion a year in revenue by 2021. For more on this read the full report here.
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