Samsung's exclusive content partnerships will help counter Apple's services push

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At Samsung's Unpacked 2020 event, the South Korean tech giant unveiled more than just new devices - it announced partnerships with Microsoft and Netflix to boost its content offerings. The news comes at a time when rival Apple is improving its ecosystem with a slew of new services. Here's what we know about the two deals:

• Samsung's partnership with Microsoft's gaming subsidiary Xbox will provide gaming content to Samsung owners and foster collaboration on cloud-based gaming. The company announced that Microsoft's racing game Forza Street will initially be for sale exclusively on Samsung devices before receiving wider distribution. While the two companies haven't elaborated the details of the cloud gaming partnership, it could involve bundling Microsoft's xCloud streaming service with Samsung devices - the service is currently being tested on a range of Galaxy devices, per Microsoft's VP of gaming Kareem Choudhry in a statement to The Verge.
• Netflix and Samsung struck a deal that cements the video streaming giant as the smartphone maker's exclusive mobile entertainment partner. Through the partnership Netflix will provide Samsung users with exclusive content - including behind-the-scenes videos - which will be shot using Samsung S20 smartphones. The streaming service will also provide Samsung device owners with bonus content for certain Netflix Original series.

Samsung's content deals will help it counter the draw of Apple's mobile game and video streaming subscription services. The US tech titan debuted Apple Arcade and Apple TV+ in September and November 2019, respectively, as part of a wider push to develop additional services - earlier that year the company launched its Apple News+ service.

The services provide Apple customers with access to a library of content, some of which is exclusive, improving the value proposition of its platforms. The addition of these services helped the company generate record revenue from its services segment, which took in $12.7 billion during the company's fiscal Q1 2020 (ended December 28, 2019). However, Apple's services pale in comparison to established rivals - by comparison, Netflix has 167 million subscribers, almost five times as many as Apple TV+'s 34 million subscribers.

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The deals with Xbox and Netflix are part of Samsung's larger strategy to forge partnerships with leading content services rather than investing to develop their own. Apple's services haven't been cheap to develop and operate: Apple TV+ has a budget of $6 billion, and Apple Arcade reportedly has a budget of over $500 million.

To avoid making similarly steep investments, Samsung has consistently sought out partnerships with leading content providers in several areas - aside from these new deals, Samsung teamed up with Spotify, the world's most popular music streaming service, to bundle free trials and the Spotify app on its phones, mirroring Apple's strategy for Apple Music.

And the company has also tried to improve the functionality of its devices by partnering with Microsoft to include the latter's OneDrive storage cloud storage service on select smartphones, which can help both companies to better compete against Apple's iCloud platform.

The addition of these services and features will help Samsung retain customers while enticing new customers from Apple's ecosystem without breaking the bank - from Q4 2018 to Q2 2019 over 18% of iPhone users who bought a new phone switched to a Samsung smartphone, according to BankMyCell.

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