Shares of Roku (ROKU - Get Report) were down sharply and those of Netflix (NFLX - Get Report) and Disney (DIS - Get Report) also fell on Tuesday after Apple (AAPL - Get Report) used its annual iPhone event to reveal that its forthcoming television service, Apple TV+, which goes live Nov. 12, will cost just $4.99 per month, lower than many had expected before the event.
That price, as TheStreet noted earlier, is less than half the cost of Netflix's most popular streaming video plan, its Standard plan which allows for HD streaming on up to two devices at a time. Apple TV+ is also priced lower than the $6.99 at which Walt Disney (DIS - Get Report) plans to offer its new service, "Disney+," due to start up in December.
Shares of Roku, which makes hardware for users to connect to various streaming services, fell 10.5% on Tuesday, while both Netflix and Disney shares fell 2.2%. Meanwhile, Apple shares rose 1.2%.
Apple said it will also give away a year of the service to anyone who buys an iPhone, iPad, Mac computer, or the Apple TV appliance. With financing available for Apple products, either through carriers or through Apple's own financing plans (and especially with its new Apple Card credit card offering), it's as if Apple is giving away streaming video.
Analysts, however, believe that the Apple threat may be more muted than its cut-rate pricing and the stock market's reactions might suggest. Michael Pachter, a longtime bear on Netflix who follows it for Wedbush Securities nevertheless was unimpressed by the Apple foray.
"There is no content to speak of," said Pachter of Apple+. "Their lineup consists of two hours a week of original content."
Apple TV Plus is set to debut with shows such as "The Morning Show," a drama about a morning talk show featuring Reese Witherspoon, Jennifer Aniston, and Steve Carell; "Dickinson," a comedy based on the life of writer Emily Dickinson; and a drama about the space race entitled "For All Mankind." On Tuesday, Apple released an additional trailer for a series starring Jason Momoa called "See" about a future in which most humans have lost the ability to see. Tim Cook said more new shows would be added over time.
Said Pachter, "over time, this could develop into a threat, but the market is giving Apple too much credit today."
Mark Mahaney with RBC Capital Markets, who has a Buy on Netflix and a hold on Roku, sees an impact for Netflix, as well as Disney, but only a muted one. And he actually sees upside for Roku.