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Apple Streaming Media Rattles Netflix

This article was originally published on ETFTrends.com.

Netflix (NFLX) shares dropped more than 2% on Tuesday after Apple (AAPL) revealed that its subscription TV service will launch in November, will be much cheaper than Netflix, and will be free for a year for customers who buy a Mac, iPhone or Apple TV.

Apple TV+, was expected, but consumers didn’t know how much they would be paying. There were originally rumors that the subscription cost would be $9.99 a month, but Apple CEO Tim Cook said the ad-free service will cost $4.99 a month. Providing original content via subscription is the company’s latest effort to bolster its services business as iPhone sales slow.

In addition, this monthly cost includes family access for up to 6 family members, and you’ll even get a whole year free of Apple TV Plus if you purchase a new iPhone, iPad, or Apple TV.

People will have three months after activating their new device to take advantage of the offer, according to a press release. If the device is purchased and activated before Apple TV Plus launches, customers will have three months starting November 1st.

 Meanwhile, Netflix raised the price of subscriptions in January. It now starts at $8.99 a month. The most popular offering costs $12.99, and its premium plan is $13.99. The streaming space has become increasingly competitive of late, with Disney and Apple joining the fray. While Netflix’s most popular plan is currently available for $12.99 a month, Disney+ is set to launch on November 12th for $6.99 a month. Disney will also offer its own bundle with ad-supported Hulu and sports streaming service, ESPN+, for $12.99 a month.  Apple is committed to offering original content for TV Plus. The company reportedly raised its content budget from $1 billion to more than $6 billion, according to Bloomberg. Apple is also reportedly spending approximately $15 million an episode on some of its heftiest shows, including The Morning Show and the Jason Momoa-led sci-fi series, See. The tech behemoth also kicked off its annual fall product launch on Tuesday where in addition to the pricing for Apple TV+, it announced new iPhones, launch dates and Apple Arcade, a new $499 Apple Watch Series 5, as well as a refreshed $329 iPad.

Investors looking for Apple plays using ETFs could look at ETFs with heavy servings of Apple stock including:

  • Technology Select Sector SPDR ETF (XLK) : The Technology Select Sector SPDR Fund tries to reflect the performance of the Technology Select Sector Index, which is comprised of technology and telecom sector of the S&P 500. The ETF includes companies from technology hardware, storage, and peripherals; software; diversified telecommunication services; communications equipment; semiconductors and semiconductor equipment; internet software and services; IT services; electronic equipment, instruments and components; and wireless telecommunication services.
  • Fidelity MSCI Information Technology Index ETF (FTEC) : The First Trust Nasdaq-100 Tech Index tries to reflect the performance of the Nasdaq-100 Technology Sector Index, which consists of companies in the Nasdaq-100 Index classified as technology according to the Industry Classification Benchmark. QTEC currently holds 34 components and more-or-less equally weights its holdings.
  • iShares U.S. Technology ETF (IYW) : The iShares U.S. Technology ETF reflects the performance of the Dow Jones U.S. Information Technology Index, which includes all tech sector picks in the Dow Jones U.S. Index. Due to the Dow Jones’ classification of information tech names, healthcare technology stocks may be included while payment technology stocks are excluded.

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