Apple raises prices on its TV and Music streaming services

Apple on Monday raised monthly and annual subscriptions in the US for its Apple TV+ and Apple Music streaming services. It also raised prices for the Apple One, its bundle.

A monthly individual subscription to Apple Music now costs $10.99, up from $9.99. Rival Spotify
currently starts at $9.99 per month.

Access to Apple TV+ costs $6.99 per month, up from the previous price of $4.99 per month. Apple TV+ is priced competitively with other streaming services, some of which have also raised prices in recent months. It also has a smaller content library. A Disney competitor

starts at $7.99 per month, while Netflix
starts at $9.99 per month, but the ad-supported service runs for $6.99 per month.

Apple also raised annual subscription prices for these services, raising the entry cost of the Apple One, which adds storage and the Arcade game service, from $14.95 to $16.95.

International markets and some other packages will see similar price increases.

The price hike comes at a time of rapid inflation around the world, which is forcing businesses to raise prices while still trying to maintain consumer demand.

The increases could also boost revenue from Apple’s fast-growing services business, which reported $16.9 billion in revenue during the June quarter.

But Apple also warned that growth in services business would slow in the September quarter, partly due to a strong dollar.

Apple Music and Apple TV+ are a small part of Apple’s services, which also includes search royalties, hardware warranties, App Store sales and other business.

“The change to Apple Music is due to an increase in licensing costs, and in turn artists and songwriters will earn more for streaming their music,” Apple said in a statement. “We also continue to add innovative features that make Apple Music the best listening experience in the world. We launched Apple TV+ at a very low price because we started with just a few shows and movies. Three years later, Apple TV+ is home to an extensive selection of award-winning and widely acclaimed series, feature films, documentaries and entertainment for kids and families from the world’s most creative storytellers.”

‘It’s not surprising’: Why Apple is raising subscription prices now

Apple ( AAPL ) is raising its prices, and one analyst says it shouldn’t come as a surprise.

“It’s not surprising,” Dan Morgan, senior portfolio manager at Synovus Trust, told Yahoo Finance Live (video above). “It’s a very competitive environment and [Apple] is trying to offset some of the things that are happening with some of the competitors.”

Morgan cited the current inflationary environment along with upcoming ad-supported tiers from Netflix ( NFLX ) and Disney ( DIS ) as reasons for Apple’s decision. Both platforms have also raised prices in the past year; Netflix raised monthly prices in January, while Disney announced price hikes across its various streaming devices in August.

Recently, YouTube ( GOOGL ) raised the price of its YouTube Premium Family plan by 28%, with US prices rising from $17.99 to $22.99. The YouTube Premium Individual Plan and Student Plan have retained their current prices of $11.99/month and $6.99/month, respectively.

“Streaming prices are going to go up,” Paramount ( PARA ) CEO Bob Bakish previously warned during the Yahoo Finance All Markets Summit (video above). He added that consumers are likely to absorb the cost increase because “streaming generally represents an extraordinary value to consumers.”

Apple announced price increases on Monday that affect a variety of services including Apple TV+, Apple Music and the Apple One Bundle. This is the first time Apple has raised subscription prices for these offerings in the US, and international markets will see similar price increases.

Apple Music will now cost $10.99 for an individual plan (an increase of $1), and the family plan will increase by $2 per month to $16.99. Rival Spotify (SPOT) currently starts at $9.99 per month.

Apple TV+ will see a price increase of $2 to $6.99 per month, while the Apple One bundle, which includes subscriptions to Apple Music, Apple TV+, Apple Arcade, iCloud+, Apple News+ and Apple Fitness+, will increase prices by $2 to $16.95 per month $.

Apple noted that the change to Apple Music is due to an increase in licensing costs. As a result, artists and songwriters earn more for streaming their music.

The stock, which has fallen more than 15% year-to-date, traded higher on Monday after the news. Meanwhile, Warner Music Group ( WMG ) surged after the announcement, jumping more than 13% at one point on Monday.

Regarding Apple TV+, the company wrote: “We introduced Apple TV+ at a very low price because we started with just a few shows and movies. Three years later, Apple TV+ is home to an extensive selection of award-winning and widely acclaimed series, feature films, documentaries and entertainment for kids and families from the world’s most creative storytellers.”

Morgan noted that while Apple TV+ isn’t yet critical to the tech giant’s bottom line, Apple wants to compete with other platforms by boasting highly acclaimed hits like the Oscar-winning movie “Coda” and the Emmy-winning series. “Ted Lasso.

“It’s not a big part of their business,” Morgan said. “It’s a service-side component, but it’s something they’ve been working on and trying to grow over a period of time.”

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