Apple has abandoned its plans for a low-cost Apple TV dongle and is set to significantly accelerate and expand the output of new content on Apple TV+ next year, according to The Information.
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Sources said to be familiar with Apple's plans speaking to The Information have apparently revealed many of the company's internal discussions and attitudes around Apple TV+ in detail. The company allegedly sees Apple TV+ as a standalone business rather than a mechanism to encourage users to buy into the Apple ecosystem.
The Information reported in 2018 that Apple was working on a low-cost TV dongle device as a more inexpensive alternative to the Apple TV, which starts at $149. The project was driven by Tim Twerdahl, an Apple video and audio marketing executive, who argued that a low-cost TV device would make it more affordable for users to access Apple TV+ based on his experience overseeing similar projects at Netflix and Amazon.
Greg Joswiak and Phil Schiller reportedly overruled Twerdahl, insisting that Apple should not begin making cheap, low-margin devices due to its potential to damage its reputation for premium products, meaning that Twerdahl's low-cost TV device project was abandoned. Twerdahl is said to have recently left the company.
Apple decided that an appropriate middle-ground solution would be to develop apps for Apple TV+ on other platforms, such as devices from Samsung, Roku, Amazon, Sony, and Microsoft, which aligned with earlier concerns among executives, including Eddy Cue, that Apple TV+ would need to be available on a wide range of devices, including non-Apple ones.
Executives are said to have debated putting the Apple brand on another company's device for over a year, ahead of Apple reaching an agreement for a dedicated Apple TV+ button on the Roku remote control. Apple has apparently discussed similar arrangements with at least one other TV manufacturer, but there are no imminent plans for another dedicated button.
The report explained that Apple intends to increase the amount of regular new content on Apple TV+ in 2022, with at least one new item added per week, at more than double the pace of new content in 2021.
Despite Apple's willingness to pay a premium for Apple TV+ content, the company apparently refuses to cover budget overruns, insisting that studio partners pay for any additional costs.
Some studio executives have apparently felt frustrated with Apple's lack of willingness to market shows aggressively before they come out, treating the debut of new shows like hardware products. The company is also said to share little detail with studio partners about the objectives of marketing campaigns, and whether they are aiming to advertise to acquire subscribers or raise awareness of an individual show.
Apple TV+ is also set to benefit from more than $500 million in marketing this year. The company is believed to have spent significantly less than this on marketing in 2020. Netflix, by comparison, spent $1.1 billion on marketing during the first half of 2021 alone. Apple has also reportedly told advertising partners that it will not buy campaigns for Apple TV+ titles on Facebook or Instagram.
It was estimated that by the end of 2020, Apple TV+ had around 40 million subscribers. These numbers are roughly the same as of this summer, according to an individual said to have knowledge of Apple's subscriber figures. Approximately half of Apple TV+ subscribers are now paying for the service, with the other half still using a free trial period.
Other tidbits from the report include the fact that Apple has endeavored to protect its brand within Apple TV+ shows, insisting that the unlikeable character of "Jo" in "Mythic Quest" was not seen using Apple devices during the show's second season.
For more details, see The Information's full report.
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