How Streaming Video / Audio Powered Apple Past the iPhone
APPLE STRATEGY REVIEW
DATE: April 7, 2018
LOCATION: 401 W 14th St. NYC
ATTENDEES:
Angela Ahrendts
Tim Cook
Eddy Cue
Jonathan Ive
Luca Maestri
Phil Schiller
Jeff Williams
And
Steve Dowling
Deirdre O’Brien
Tim Cook:
“Good morning and thank you for being here.”
“Ten years ago we acknowledged the need to innovate, to move into new areas of opportunity, as we saw the eventual maturity of the iPhone.”
“Today we can look back with great pride on our achievements. Today we’ll look back at our results. Also, we’ll kick off a new five year innovation plan.”
‘Eddy, if you would take us through the Apple Streaming iMusic service.”
Eddy Cue:
“Thanks Tim. We launched iTunes in 2001. At that time we recognized that one day the customer consumption may change and the delivery method may need to be augmented. So we built the streaming utility, technically it was iteration 4, following the initial successful rollout of iTunes 1, 2 and 3.”
“It was natural that we offer other delivery methods beyond digital download. We had the music rights. We had strong loyalty among our users. We had a large and growing customer base.”
Taking On Spotify
“And most importantly, we owned the digital music delivery business. It was our platform, iTunes, that launched digital. We created the business model with the music publishers and only Apple had contracts for digital distribution. And so, it was our responsibility to continue to evolve with our customers - and we did.”
“When Spotify and others came along, we were the service of choice. Our existing base was not going to move to Spotify. So the competition was for new customers. They offered a free service with ad based revenue. We offered 31 days of free service - no ads - and then the same price as Spotify. Our audio quality was excellent from the start, our interface was simple and elegant and our ability to understand individual user music preferences got better and better.”
“We crushed Spotify and all of the others. Our market share for streaming music is 66% and has never fallen below 60%. Our 2017 revenue was $11 billion with a 33% margin. And streaming music led to streaming video.”
“And for that, I’ll turn the meeting over to Phil Schiller.”
Phil Schiller
“Thanks Eddy. We began work on streaming video in 2005, when the streaming feature was added to iTunes. We tested for 2 years and began testing inside Apple in 2007. We really saw the future of streaming video with our initial work on the iPad.“
“Netflix launched in 2007. It was a help to us as movie studios understood streaming when we began partnerships in early 2007. We launched Apple Streaming iVideo in mid 2007 by offering three free movie downloads to our music members - the top three were ‘Little Miss Sunshine’ ‘Batman Returns’ and ‘The Chronicles of Narnia.’ In 2008 Apple’s Streaming iVideo revenue totaled $1.5 Billion with a 27% margin. In 2017 revenue totaled $15 billion with a margin of 33% and we’re still growing. Our 2017 original production consisted of 12 movies, 12 Series, 6 concerts, 3 boxing matches, 3 Broadway plays, 1 Live Streaming Opera from the Royal Opera House in London and 1 Live Political Debate. And of course we won our 6th and 7th oscar.”
“In 2017, we had a 60% market share for streaming video. Netflix is behind us at 20%.
“The key to success was leveraging very early our iTunes platform. Our growth was organic as our customers streamed both music and video with a super easy interface and an economical monthly automated subscription - which is deducted from the Apple Visa card.”
“Tim?”
Tim Cook
“Thanks Phil.”
“Before we head to lunch, please accept my thanks and appreciation for your work on these company changing projects. Apple is the innovation leader in technology.”
“As we won the marketplace for streaming music and video, we’re hard at work on new subscription based services. I’m excited about our “Apple All In” $129 per month subscription service offering an iMac, iPad, iPhone, Streaming iTunes and iVideo as a service. We’re testing now and will learn if the pricing and product offering is right.”
“A final thought. Our critics said that we were a one-trick pony - the iPhone and no other technology. Thank you critics! Ladies and Gentleman - we love a challenge.”
“So let’s head to our working lunch and we’ll start by going around the table, please take five to ten minutes, and let’s discuss your thoughts on technology service introductions for the next 5 years.”
“And if you will lift your glass, let’s toast a great technology innovation past and an even better technology innovation future.”
“Cheers!.”
(A Work of Fiction by Gordon Lawrence. Thank You For Reading)
APPLE STRATEGY REVIEW
DATE: April 7, 2018
LOCATION: 401 W 14th St. NYC
ATTENDEES:
Angela Ahrendts
Tim Cook
Eddy Cue
Jonathan Ive
Luca Maestri
Phil Schiller
Jeff Williams
And
Steve Dowling
Deirdre O’Brien
Tim Cook:
“Good morning and thank you for being here.”
“Ten years ago we acknowledged the need to innovate, to move into new areas of opportunity, as we saw the eventual maturity of the iPhone.”
“Today we can look back with great pride on our achievements. Today we’ll look back at our results. Also, we’ll kick off a new five year innovation plan.”
‘Eddy, if you would take us through the Apple Streaming iMusic service.”
Eddy Cue:
“Thanks Tim. We launched iTunes in 2001. At that time we recognized that one day the customer consumption may change and the delivery method may need to be augmented. So we built the streaming utility, technically it was iteration 4, following the initial successful rollout of iTunes 1, 2 and 3.”
“It was natural that we offer other delivery methods beyond digital download. We had the music rights. We had strong loyalty among our users. We had a large and growing customer base.”
Taking On Spotify
“And most importantly, we owned the digital music delivery business. It was our platform, iTunes, that launched digital. We created the business model with the music publishers and only Apple had contracts for digital distribution. And so, it was our responsibility to continue to evolve with our customers - and we did.”
“When Spotify and others came along, we were the service of choice. Our existing base was not going to move to Spotify. So the competition was for new customers. They offered a free service with ad based revenue. We offered 31 days of free service - no ads - and then the same price as Spotify. Our audio quality was excellent from the start, our interface was simple and elegant and our ability to understand individual user music preferences got better and better.”
“We crushed Spotify and all of the others. Our market share for streaming music is 66% and has never fallen below 60%. Our 2017 revenue was $11 billion with a 33% margin. And streaming music led to streaming video.”
“And for that, I’ll turn the meeting over to Phil Schiller.”
Phil Schiller
“Thanks Eddy. We began work on streaming video in 2005, when the streaming feature was added to iTunes. We tested for 2 years and began testing inside Apple in 2007. We really saw the future of streaming video with our initial work on the iPad.“
“Netflix launched in 2007. It was a help to us as movie studios understood streaming when we began partnerships in early 2007. We launched Apple Streaming iVideo in mid 2007 by offering three free movie downloads to our music members - the top three were ‘Little Miss Sunshine’ ‘Batman Returns’ and ‘The Chronicles of Narnia.’ In 2008 Apple’s Streaming iVideo revenue totaled $1.5 Billion with a 27% margin. In 2017 revenue totaled $15 billion with a margin of 33% and we’re still growing. Our 2017 original production consisted of 12 movies, 12 Series, 6 concerts, 3 boxing matches, 3 Broadway plays, 1 Live Streaming Opera from the Royal Opera House in London and 1 Live Political Debate. And of course we won our 6th and 7th oscar.”
“In 2017, we had a 60% market share for streaming video. Netflix is behind us at 20%.
“The key to success was leveraging very early our iTunes platform. Our growth was organic as our customers streamed both music and video with a super easy interface and an economical monthly automated subscription - which is deducted from the Apple Visa card.”
“Tim?”
Tim Cook
“Thanks Phil.”
“Before we head to lunch, please accept my thanks and appreciation for your work on these company changing projects. Apple is the innovation leader in technology.”
“As we won the marketplace for streaming music and video, we’re hard at work on new subscription based services. I’m excited about our “Apple All In” $129 per month subscription service offering an iMac, iPad, iPhone, Streaming iTunes and iVideo as a service. We’re testing now and will learn if the pricing and product offering is right.”
“A final thought. Our critics said that we were a one-trick pony - the iPhone and no other technology. Thank you critics! Ladies and Gentleman - we love a challenge.”
“So let’s head to our working lunch and we’ll start by going around the table, please take five to ten minutes, and let’s discuss your thoughts on technology service introductions for the next 5 years.”
“And if you will lift your glass, let’s toast a great technology innovation past and an even better technology innovation future.”
“Cheers!.”
(A Work of Fiction by Gordon Lawrence. Thank You For Reading)
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