Ever since Apple started ramping up its investments in original programming there has been lots of speculation about the company’s true motivation for the initiative. Keep up with the competition? Drive more “services” revenues? Burnish its brand? Ensure executives have tickets to award shows and after parties? All of the above? None of the above? Something else?
The most accurate motivation is likely to keep viewers loyal to Apple’s ecosystem and thereby sell more Apple products to them. That’s the conclusion from a compelling new analysis by Kenny Wassus, senior video journalist at the Wall Street Journal, explained in a 7 minute video (see embedded below). Wassus studied which Apple products appeared and how often in five Apple originals, “Defending Jacob,” “The Morning Show,” “Mythic Quest,” “Ted Lasso” and “Trying.” He watched a total of 74 episodes, totaling over 2,600 minutes, logging every Apple product placement.
From his review, Wassus concludes that Apple’s product placement strategy is “way over the top in terms of Apple products shown on screen” but that it is “very strategic.” Apple is bombarding viewers with Apple products but it is also following well-understood product placement best practices to optimize results.
In his review of the shows, Wassus found 704 Apple product placements, including 300 iPhones, 120 MacBooks and 40 pairs of AirPods. Consulting with Pepperdine University professor Cristel Russell, who is an expert in product placement, Wassus was able to zero in on Apple’s execution across three key dimensions of classic product placement strategy: visual (seeing the products), audio (hearing references to the products and/or their familiar tones, rings, dings, etc.) and plot connection (how they’re integrated into the plot and help move it along while also developing characters).
Using Russell’s framework, Wassus notes that Apple’s products most frequently show up in “section 5” which is the middle of the 9 sections the screen can be divided into. In one particular “Ted Lasso” episode, half of all product placements were in section 5, right in the middle of the screen. The other shows didn’t have as many product placements, but when they did, often it was in the middle of the screen. Wassus shares numerous clips throughout the five shows demonstrating audio and plot connection placements.
Russell also notes that effective product placement leverages viewers’ “parasocial relationships” with the characters. Viewers’ positive associations with the characters are subtly transferred to the products themselves. Wassus found that the shows’ most likable characters are the ones most often shown with Apple products. In “Ted Lasso” for example, Wassus found that the character Rebecca Welton was seen with Apple products 73 times while Ted Lasso himself was seen 57 times with Apple products.
Conversely, as has been previously reported, Apple never allows “villains” or “bad guys” to be shown using its products. Wassus provides numerous examples of these characters either using unbranded Apple products or unbranded flip or Android phones or having their use of Apple products hidden from view. Russell observes that “attitudes will be more positive” toward Apple products after watching these shows.
Why does any of this matter in the larger context of streaming and the intense battle for viewers’ attention? Because it shows how big technology firms are using video explicitly to advance their own business models and commerce. Nearly five years ago, in “Prime’s Unique Business Model is Fueling Amazon’s Ever-Growing Video Ambitions,” I wrote that “Video is not an end in and of itself for Amazon, as it is at all other media companies. In other words, rather than video needing to stand on its own legs, supported by revenues from subscriptions, advertising or both, as is the case at all other media companies, Amazon can look at video investments in terms of how they help to drive the Prime model.” Jeff Bezos's famous characterization of Prime as a unique "physical digital hybrid membership program" in his 2016 Recode interview provide perfect context for Amazon's video ambitions (see 37:32 cue point).
Now, with Wassus’s analysis, we can see clearly that Apple is taking a page from Amazon’s playbook. While Apple does explicitly charge for Apple TV+ (unlike Amazon, which continues to include its originals in Prime for no extra charge), these subscription fees are not Apple’s guiding motivation in producing high-end originals. Rather, it is to keep its products front and center for viewers and reinforce positive brand associations with the ultimate goal of selling more of them.
With tens of billions of dollars of annual product sales on the line, Apple is acting perfectly rationally. The issue, as I said in the Amazon piece from 2016, is that established and newer media companies, who monetize solely through subscriptions, advertising, transactions or all of the above, must be aware that now another massive tech company is further changing the rules of the game in video, subsidizing its costs in service of larger business goals. And remember, just last Friday The Information reported that Apple will spend $500 million marketing Apple TV+ in 2022 while doubling its originals output.
All of this portends a further shifting of leverage throughout the industry’s value chain, creating yet more challenges for established and newer media companies to adapt to new realities. For subscription-supported services, I think it highlights why they need to redouble their efforts to own and retain subscribers relative to third-party CTV distributors. For ad-supported streaming services, I think it underscores why it is so crucial for CTV to further develop into a true full-funnel advertising solution, as I have written (here, here, here). If and when these things happen then these streaming services will have much stronger monetization models. This will in turn help fund their originals’ budgets and keep these services competitive for viewers’ attention and talent’s interest in partnering.