Topline: Shares of Netflix and Disney dropped on Tuesday, following an announcement that Apple’s new rival TV service will be less expensive than any other major streaming service.
- Apple announced Tuesday that its new streaming service, Apple TV+, launches November 1 and will price at $4.99 per month – making it cheaper than other established streaming options. (Netflix’s most popular plan prices at $12.99/month; Disney+ charges $6.99/month.)
- The offer includes a free one-year subscription for customers who purchase any new Apple device.
- Netflix shares fell over 3% following Apple’s announcement, while Disney stock dropped more than 2%.
- Apple’s big reveal is yet another blow for Netflix: the company’s latest quarterly earnings report revealed a decrease in U.S. subscribers and a lot less new international subscriptions than expected.
- Shares of streaming device Roku—which directly competes with Apple TV—were the hardest hit, plunging more than 11% on Tuesday.
Key background: Apple TV+ will showcase original programming content from Apple, in what is the company’s latest effort to expand the services side of its business and offset declining iPhone sales. The details on the new streaming service were a center-piece of Apple’s big announcements today. At the event, consumers also got a glimpse of the new iPhone 11, an upgraded seventh-generation iPad, the new Apple Watch Series 5, and Apple’s new mobile gaming subscription service: Apple Arcade.