CUPERTINO, Calif. — Apple unveiled a new video streaming service on Monday with a parade of celebrities rarely seen on a stage outside of Hollywood’s awards season, with heavyweight directors like Steven Spielberg and J. J. Abrams and stars like Octavia Spencer and Jennifer Aniston.
Oprah Winfrey even served as the closer for the nearly two-hour event at the Steve Jobs Theater on Apple’s campus. “They’re in a billion pockets, y’all,” Ms. Winfrey said of Apple’s global reach. “A billion pockets.”
As enthusiastic as the entertainment industry appears to be to work with Apple, it is increasingly clear that Apple needs Hollywood. After years of record profits, the company is slowing down. Phone sales are cooling, and despite the relative popularity of products like the Apple Watch, the next big thing has eluded the Silicon Valley giant.
Now, short of another game-changing gadget and facing tough competition from rivals like Amazon and Netflix, Apple is trying to make sure you never leave all those Apple devices you have acquired over the years. The company unveiled an expansive strategy to push consumers to do more than just buy its hardware products. It has plans for new monthly subscription services for TV programming, video games and news, as well as a new credit card.
The new services represent an evolution of Apple’s business. For years, Apple focused mainly on selling devices, counting on consumers to upgrade phones and tablets every few years. Now the company is keying on selling content and services for its roughly 1.4 billion active devices, which include Apple TV boxes, Apple Watches, Mac computers and iPads.
ImageFrom left, Steve Carell, Reese Witherspoon and Jennifer Aniston announce Apple’s new streaming services.CreditJim Wilson/The New York Times
The streaming service is called Apple TV Plus. After years of speculation about what an Apple alternative to Netflix might look like, the company offered few details about the new offering — but plenty of razzle dazzle. Reese Witherspoon, Steve Carell, Kumail Nanjiani, Jason Momoa and Alfre Woodard — even Big Bird from Sesame Street — also joined Apple executives on the stage.
At the heart of Apple TV Plus will be new original programs. It will not carry advertising and will begin this fall in more than 100 countries. It will also include programs from other television networks like HBO, Showtime, Starz and CBS.
But some of the biggest questions going into the Apple event were not answered, starting with price. The stars talked about their new programs, but the broad story lines of the shows were already known.
Mr. Spielberg was the first Hollywood celebrity to take the stage, and he received the morning’s first standing ovation. “This is my first time at Apple,” he said.
Mr. Spielberg was also speaking for many in the entertainment industry who were making their first trip to Apple’s campus 300 miles north from Los Angeles. Since October 2017, Apple has spent well over $1 billion on original programming. Five shows have completed filming, and another half-dozen will be finished in the coming months. Apple has ordered about two dozen series altogether.
But Apple is coming late to the game. Netflix has been making original programming for seven years and will spend at least $10 billion on content this year. Amazon and Hulu have also made tremendous inroads with the industry.
Apple’s entertainment foray could also lead to a culture clash. Silicon Valley and Hollywood operate in distinctly different ways: Apple prides itself on secrecy, while Hollywood runs on a wealth of information. Perhaps aware of this sensitivity, Netflix’s chief executive, Reed Hastings, began describing his company last week as an entertainment company instead of a tech company.
Apple’s streaming music service has 56 million subscribers. It offers additional cloud storage for a monthly fee, and it takes a cut of the money spent on apps running on its devices, as well as a sliver of digital payments made by iPhones. Apple generated $10.9 billion from services in the last quarter of 2018, compared to $73.4 billion from hardware sales.
The video service is the linchpin of Apple’s broader services push. In addition to customers paying $1,000 every two or three years for a new iPhone, Apple hopes they will also pay $10, $20, $30 or $40 a month a one-stop shop for content for all their devices.
“In essence Apple is seeking to become a Netflix of everything in services; music, news and magazines, video and games,” said Paolo Pescatore, a technology, media and telecoms analyst at PP Foresight.
Apple said its Apple News Plus subscription will include access to 300 magazines, including The New Yorker, National Geographic and InStyle. It will also feature newspapers like The Los Angeles Times and The Wall Street Journal. The subscription will cost $9.99 a month and is available beginning today in the United States and Canada.
The subscription service builds on a free news app that the company released in late 2015 and comes installed on the company’s iOS software. Apple said about five billion articles are read monthly on Apple News.
ImageRoger Rosner, Apple’s vice president of apps, at Monday’s event.CreditJim Wilson/The New York Times
The price to be part of Apple’s paid news offering is steep. Apple is taking a 50 percent cut of the subscriptions, with the publications splitting what’s left over based on readership. Apple’s cut for news is larger than the 30 percent it takes for subscriptions bought in the App Store. Publishers expressed concern that Apple would maintain access to important consumer data such as credit cards and email addresses as part of the deal.
The Wall Street Journal said its business stories and analysis would remain exclusive to its paying subscribers, but it sees an opportunity to reach a new category of readers for general interest news. The newspaper said it would add to its newsroom to support Apple News Plus. The New York Times and The Washington decided to not join the service.
For video games, the company said it would start a subscription service called Apple Arcade this fall. It did not offer any pricing details for the service, but the company said this will allow people to try out new games. Apple said it will help foot some of the development costs for game developers.
Apple also unveiled a credit card called Apple Card. Working in tandem with Goldman Sachs, the company said the new credit card is meant to work mainly on the iPhone — users can apply for the card on the phone and be instantly approved. It will reap bigger rewards if the consumer uses the card on Apple Pay, the company’s digital payment system.
The credit card offers 2 percent cash back for spending on Apple Pay. Apple touted how it simplified credit card rewards with “daily cash” deposited back into the digital wallet on the iPhone shortly after purchasing an item.
After its barrage of announcements, Tim Cook, Apple’s chief executive, introduced Ms. Winfrey. Apple signed to a deal with her in June 2018. Ms. Winfrey said she was making two documentaries for Apple’s new video service and bringing her book club to the company and turn it into the “biggest, most vibrant, most stimulating” book club on the planet.