Apple considering original TV shows to boost 'cable-like' streaming coming in Sept. - report

AppleInsider

In continuing efforts to launch a streaming TV service, Apple is now trying to pitch studios and producers on investing in exclusive TV shows, according to a Friday report.

Netflix's original series Narcos.

The company first began talks late last year, and no agreements have been signed yet, two sources told The Street contributor Ronald Grover. Grover was formerly a Los Angeles bureau chief with Reuters and BusinessWeek.

One of the sources said that Apple is hoping to complete deals in time for announcing exclusive video alongside a streaming TV service in September, which is also when a next-generation iPhone should launch.

The person in charge of the talks is reportedly Apple's senior VP of Internet Software and Services, Eddy Cue, who often handles media negotiations. Another person involved is said to be Robert Kondrk, VP of iTunes content.

In December reports claimed that Apple was putting its streaming TV plans on hiatus, as it couldn't get content owners to agree to a "skinny" channel bundle priced under $30. At least some of those owners didn't want networks to be left out. Some recent accounts have suggested, however, that the project is still alive, even if it hasn't made any tangible progress.

Rumors of Apple interest in original programming date back to August, although these were more vague apart from a claim that the company tried to lure former Top Gear hosts Jeremy Clarkson, Richard Hammond, and James May, who ultimately went to Amazon.

Following the success of Netflix with shows like House of Cards and Orange is the New Black, several other streaming services have followed in its footsteps. Apple might consider original programming vital to distinguishing its product.

mr_grey

A company famous for it's censorship is going to produce modern TV shows?  Hmmm ....

steinm88299

Apple should really look at buying Time Warner. There is your Apple TV must have app right there. 

justp1ayin

Mr_Grey said:

A company famous for it's censorship is going to produce modern TV shows?  Hmmm ....

Next thing you know they'll allow music about violence on iTunes 

lkrupp

This is good time to bring up the subject of Apple’s obvious reliance on iPhone sales for the bulk of its income. Do you really think the upper management of Apple doesn’t already know they have to diversify because the iPhone won’t always be the cash cow. The Apple II line was the cash cow while the Macintosh was being developed. The only question is whether, not if, that diversification happens internally or by buying it on the open market. I for one have full confidence that Apple’s leadership is not the blockheads some on AI make them out to be.

rogifan_old

steinm88299 said:

Apple should really look at buying Time Warner. There is your Apple TV must have app right there. 

No. That would be a huge acquisition of mostly legacy media assets plus movie studios. Maybe if Apple could just get HBO but I doubt Time Warner is interesting in breaking up its assets. I don't want Apple to become Sony.

But with this rumor and the one about Apple having a team working on AR/VR it seems to me this is Apple's way of signaling to Wall Street and the public that they've got stuff in the pipeline. I'm sure this was all over CNBC today.

jm6032

I have been wondering how long it would take to get to this point. In 2007 the writing was on the wall that we all wanted the Internet in our hands. The writing has been on the wall for a long time now that we want skinny bundles. We cut the cord on cable TV more than a year ago and haven't looked back. And, the powers that be are just going to sit by and let Apple steal this one, too. What a cool use for all those new, green, datacenters...

cali

This makes PERFECT sense. I believe they have the money to have simultaneous studios working on a wide array of shows and movies.

steinm88299 said:

Apple should really look at buying Time Warner. There is your Apple TV must have app right there. 

While reading the headline I was thinking Apple could buy a few smaller studios/programs and get exclusive classic shows on their device along with NEW exclusive content.

Time Warner is a little too expensive and they might be better off making their own content and purchasing a few classic programs for less than half the price. I'd like to see those classic TV shows that TV Land has as exclusives. I think that could bring in a wide audience along with younger "hip" audiences with NEW content.

williamh

lkrupp said:

This is good time to bring up the subject of Apple’s obvious reliance on iPhone sales for the bulk of its income. Do you really think the upper management of Apple doesn’t already know they have to diversify because the iPhone won’t always be the cash cow. The Apple II line was the cash cow while the Macintosh was being developed. The only question is whether, not if, that diversification happens internally or by buying it on the open market. I for one have full confidence that Apple’s leadership is not the blockheads some on AI make them out to be.

You make a good point about Apple's reliance on the iPhone.  I share your confidence in Apple's leadership, I'm still invested.  Not saying Apple shouldn't do this, but original programming is risky.  Most new network shows such, distinguishing one's product with something that sucks is a potential problem.  Amazon and Netflix have done very well with original programming, but it wasn't obvious (to me at least) that it would turn out that way.  Amazon and Netflix are also different from Apple in that the programming is available on just about any device - you only need to pay for the streaming service.  I don't think that's the route Apple would take and success would be harder to achieve.

cali

jm6032 said:

I have been wondering how long it would take to get to this point. In 2007 the writing was on the wall that we all wanted the Internet in our hands. The writing has been on the wall for a long time now that we want skinny bundles. We cut the cord on cable TV more than a year ago and haven't looked back. And, the powers that be are just going to sit by and let Apple steal this one, too. What a cool use for all those new, green, datacenters...

My thoughts exactly.

Apple has the money to have various shows and movies in production creating a NEW "cable" that can compete with Comcast and others.

stevie

I for one think that Apple could make gobs of money doing this.  

There are a whole lot of industries out there that Apple has never played in.  That's where they need to invest.  Smartphones are becoming a commodity product.

And in media, Apple would be on the forefront of G-rated content that actually makes money!  Apple will release family fare and make billions doing it.

edited January 2016

rogifan_old

cali said:

This makes PERFECT sense. I believe they have the money to have simultaneous studios working on a wide array of shows and movies.

steinm88299 said:

Apple should really look at buying Time Warner. There is your Apple TV must have app right there. 

While reading the headline I was thinking Apple could buy a few smaller studios/programs and get exclusive classic shows on their device along with NEW exclusive content.

Time Warner is a little too expensive and they might be better off making their own content and purchasing a few classic programs for less than half the price. I'd like to see those classic TV shows that TV Land has as exclusives. I think that could bring in a wide audience along with younger "hip" audiences with NEW content.

I think it would be a disaster for Apple to buy a legacy media company. That's not their core competency. Dip their toe in by following the Netflix route. This is what scares me about Apple's massive cash position and Wall Street freaking out about iPhone. It could result in some bad decisions, like big acquisitions to try and buy growth.

cali

rogifan_old said:

cali said:

This makes PERFECT sense. I believe they have the money to have simultaneous studios working on a wide array of shows and movies.


While reading the headline I was thinking Apple could buy a few smaller studios/programs and get exclusive classic shows on their device along with NEW exclusive content.

Time Warner is a little too expensive and they might be better off making their own content and purchasing a few classic programs for less than half the price. I'd like to see those classic TV shows that TV Land has as exclusives. I think that could bring in a wide audience along with younger "hip" audiences with NEW content.

I think it would be a disaster for Apple to buy a legacy media company. That's not their core competency. Dip their toe in by following the Netflix route. This is what scares me about Apple's massive cash position and Wall Street freaking out about iPhone. It could result in some bad decisions, like big acquisitions to try and buy growth.

Why not do both?

I agree Time Warner is too expensive but there's no way legacy content would cost any more than original content.

williamh said:

lkrupp said:

This is good time to bring up the subject of Apple’s obvious reliance on iPhone sales for the bulk of its income. Do you really think the upper management of Apple doesn’t already know they have to diversify because the iPhone won’t always be the cash cow. The Apple II line was the cash cow while the Macintosh was being developed. The only question is whether, not if, that diversification happens internally or by buying it on the open market. I for one have full confidence that Apple’s leadership is not the blockheads some on AI make them out to be.

You make a good point about Apple's reliance on the iPhone.  I share your confidence in Apple's leadership, I'm still invested.  Not saying Apple shouldn't do this, but original programming is risky.  Most new network shows such, distinguishing one's product with something that sucks is a potential problem.  Amazon and Netflix have done very well with original programming, but it wasn't obvious (to me at least) that it would turn out that way.  Amazon and Netflix are also different from Apple in that the programming is available on just about any device - you only need to pay for the streaming service.  I don't think that's the route Apple would take and success would be harder to achieve.

What you missed is that Amazon and Netflix are available on AppleTV but Apple's content won't be available anywhere else. So the only people missing out on content are those who don't own an AppleTV, this in turn makes Apple tons of money.

stevie said:

I for one think that Apple could make gobs of money doing this.  

There are a whole lot of industries out there that Apple has never played in.  That's where they need to invest.  Smartphones are becoming a commodity product.

And in media, Apple would be on the forefront of G-rated content that actually makes money!  Apple will release family fare and make billions doing it.

For sure, this is kinda exciting. Hope it's true.

williamh

cali said:

What you missed is that Amazon and Netflix are available on AppleTV but Apple's content won't be available anywhere else. So the only people missing out on content are those who don't own an AppleTV, this in turn makes Apple tons of money.

I'm not sure.  The show has to be good enough for people to buy an AppleTV to watch it.  Not many shows are that good.  We're talking about Apple growing services and being less dependent on hardware, right?  So wouldn't it make more sense to have the service available for everybody but have the AppleTV be the superior device to watch on? Maybe AppleTV would have a show app with interactive features or something to differentiate from other devices?

battiato1981

lkrupp said:

This is good time to bring up the subject of Apple’s obvious reliance on iPhone sales for the bulk of its income. Do you really think the upper management of Apple doesn’t already know they have to diversify because the iPhone won’t always be the cash cow. The Apple II line was the cash cow while the Macintosh was being developed. The only question is whether, not if, that diversification happens internally or by buying it on the open market. I for one have full confidence that Apple’s leadership is not the blockheads some on AI make them out to be.

I've been charting Apples efforts towards developing recurring service cash flows for many years now. Jobs recognized this and I think was always looking for opportunities to smooth out some of the ride of the product cycles, but only if they aligned very tightly with Apple core products and strengths. For all that early attention, I've always been a bit surprised that it's taken them a while to get super robust iCloud services rolled out. They've been improving obviously, but have a lot further to go. As for original programing, they've got their toe in the water now with Beat 1. I think original video would be a worthy area to explore, I'm sure they've been looking at it for a while. Good time to commit to launching a variety of offerings for the fall and also to get some exclusives on foreign/independent (Sundance) made content. If the quality is good, it's an excellent talking point, marketing hook, and differentiator. I think that it has worked well for Amazon along those lines, it's a valid way to boost interest in AppleTV. Even if it doesn't make money, it boosts the ecosystem.

lord amhran

Cue can't get the projects he has working properly. What makes anyone think he'll be successful with this?

brucemc

williamh said:

lkrupp said:

This is good time to bring up the subject of Apple’s obvious reliance on iPhone sales for the bulk of its income. Do you really think the upper management of Apple doesn’t already know they have to diversify because the iPhone won’t always be the cash cow. The Apple II line was the cash cow while the Macintosh was being developed. The only question is whether, not if, that diversification happens internally or by buying it on the open market. I for one have full confidence that Apple’s leadership is not the blockheads some on AI make them out to be.

You make a good point about Apple's reliance on the iPhone.  I share your confidence in Apple's leadership, I'm still invested.  Not saying Apple shouldn't do this, but original programming is risky.  Most new network shows such, distinguishing one's product with something that sucks is a potential problem.  Amazon and Netflix have done very well with original programming, but it wasn't obvious (to me at least) that it would turn out that way.  Amazon and Netflix are also different from Apple in that the programming is available on just about any device - you only need to pay for the streaming service.  I don't think that's the route Apple would take and success would be harder to achieve.

I share your opinion that this direction isn't necessarily the best for Apple.  It isn't that they couldn't execute it - I assume they would be handling the production out to the "professionals" - where Apple decides on the type of content they want & pays for it while managing to timelines & cost.  Not unlike how Netflix does it.  But I don't think Apple could do nearly as well as Netflix - this is NFLX bread & butter, they have the detailed viewership details built over years on streaming with a subscription (likely many times more data than Apple from iTunes rentals & purchases).  And to get the most out of content, you have to be on many platforms to maximize viewership & subscription or advertising (and we know Apple isn't interested in the latter).  Not many content companies are rolling in the dough (Disney perhaps exception).

In other words, it is likely to be a loss-leader approach to selling more devices.  Nothing wrong with that, but it can be achieved in the same way by licensing content exclusively, or just more of it.  

Apple has the money to do many things...choosing the best ones is the hard part.

rayz2016

Mr_Grey said:

A company famous for it's censorship is going to produce modern TV shows?  Hmmm ....

S'funny. A good ten percent of the songs I've bought from iTunes feature explicit lyrics. And a quick movie search shows that both volumes of Nymphomaniac are available, as well as Blue is the Warmest Colour. 

Good try though. 

rayz2016

rogifan_old said:

cali said:

This makes PERFECT sense. I believe they have the money to have simultaneous studios working on a wide array of shows and movies.


While reading the headline I was thinking Apple could buy a few smaller studios/programs and get exclusive classic shows on their device along with NEW exclusive content.

Time Warner is a little too expensive and they might be better off making their own content and purchasing a few classic programs for less than half the price. I'd like to see those classic TV shows that TV Land has as exclusives. I think that could bring in a wide audience along with younger "hip" audiences with NEW content.

I think it would be a disaster for Apple to buy a legacy media company. That's not their core competency. Dip their toe in by following the Netflix route. This is what scares me about Apple's massive cash position and Wall Street freaking out about iPhone. It could result in some bad decisions, like big acquisitions to try and buy growth.

First time I've heard anyone worry about Apple having too much cash. 

brucemc

battiato1981 said:

lkrupp said:

This is good time to bring up the subject of Apple’s obvious reliance on iPhone sales for the bulk of its income. Do you really think the upper management of Apple doesn’t already know they have to diversify because the iPhone won’t always be the cash cow. The Apple II line was the cash cow while the Macintosh was being developed. The only question is whether, not if, that diversification happens internally or by buying it on the open market. I for one have full confidence that Apple’s leadership is not the blockheads some on AI make them out to be.

I've been charting Apples efforts towards developing recurring service cash flows for many years now. Jobs recognized this and I think was always looking for opportunities to smooth out some of the ride of the product cycles, but only if they aligned very tightly with Apple core products and strengths. For all that early attention, I've always been a bit surprised that it's taken them a while to get super robust iCloud services rolled out. They've been improving obviously, but have a lot further to go. As for original programing, they've got their toe in the water now with Beat 1. I think original video would be a worthy area to explore, I'm sure they've been looking at it for a while. Good time to commit to launching a variety of offerings for the fall and also to get some exclusives on foreign/independent (Sundance) made content. If the quality is good, it's an excellent talking point, marketing hook, and differentiator. I think that it has worked well for Amazon along those lines, it's a valid way to boost interest in AppleTV. Even if it doesn't make money, it boosts the ecosystem.

Beats 1 isn't necessarily original content in the pure sense - the music is licensed - the original part are the DJ's.  Quite a bit different from determining which TV content to produce in terms of new series.  Netflix has a HUGE lead in this area & been doing it for years - building upon over a decade of data on consumer preferences.  Apple does have iTunes purchases and rentals data on consumer interests, but the amount of content viewed per user (as we can see from the streaming data) is an order of magnitude less.  

And to level set - NFLX stock is worth a lot, but the company's revenue and earnings are peanuts compared to Apple (for those that think making content will at all move the needle for Apple on its own).  Content for Apple would just be a driver for purchasing h/w, and they need a lot of content to make that happen.

Better off doing some strong partnerships with Disney and Time Warner IMO.

edited January 2016

rayz2016

williamh said:

cali said:

I'm not sure.  The show has to be good enough for people to buy an AppleTV to watch it.  Not many shows are that good.  We're talking about Apple growing services and being less dependent on hardware, right?  So wouldn't it make more sense to have the service available for everybody but have the AppleTV be the superior device to watch on? Maybe AppleTV would have a show app with interactive features or something to differentiate from other devices?

That's a very good point.