Cue: “No plans” for Apple TV ad tier ↦

In an interview with Screen International, Apple’s Eddy Cue directly addressed reports that the company might launch a tier of the Apple TV streaming service with ads. His response was:

Nothing at this time…. I don’t want to say no forever, but there are no plans. If we can stay aggressive with our pricing, it’s better for consumers not to get interrupted with ads.

This is making the rounds as evidence that Apple’s not going to do an ad tier. And sure, I don’t think anything is imminent. But “nothing at this time” and “there are no plans” are also things you can say when you think you might do it but haven’t got anything to announce or haven’t made your complete plan yet. “I don’t want to say no forever” is also what you say when you think you may very well say “yes” in the near future.

I pay for the ad-free tier on every single streaming service I subscribe to. I am not cheering for Apple to launch an ad tier of Apple TV. But as I wrote in 2023, I do think they are inevitable in the long term for a few reasons:

Every other streaming service has them at this point, and they have been remarkable revenue generators across the board.

Once a streaming service offers an ad-free tier and calculates out the average revenue per user (ARPU) on that tier, they realize that they make more money from those people than from the people at their higher, ad-free tier. This is why the ad-free versions of these services cost more now—because they were underpriced relative to the ARPU.

Apple’s raising of prices on the base Apple TV service gives them more room beneath which to launch an ad tier.

Apple loves services revenue and this is a way to increase it nicely.

Apple TV is one of the least-viewed streaming services around, and offering a low-priced ad tier would be a way to get new viewers in the Apple ecosysyem.

Apple has executives devoted to ad sales and it’s their job to put ads everywhere they’re allowed.

I suspect that if Apple did offer an ad tier, it would probably be the most tasteful and elegant set of ad prerolls and breaks in the business. But I think that in the end, it won’t be able to resist the pull of video ads.

Go to the linked site.

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