Apple subscription TV plan could help push services to 20% of company's earnings, Morgan Stanley say

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Comments

  • Reply 21 of 39
    fallenjtfallenjt Posts: 4,056member
    Like Jonny Ive said about Swiss watchmaker were fcked last time: cable TV providers are fcked this time.
  • Reply 22 of 39
    nofeernofeer Posts: 2,427member
    The new Apple TV needs to be a convergence device make it converge
    all your products and teach it how to select and switch from television cable box etc.
    use Siri to tell it to play
    DVD
    Start Apple tv
    Include DVr
    also have a model that includes AirPort Express to expand your network have multiple bundles as close as alacart as possible
    Multiple hdmi inputs
    Boom massive adoption
  • Reply 23 of 39
    dasanman69dasanman69 Posts: 13,002member
    Are you saying Congress is made up of retired people and teens? ;)

    They sure act like it. :lol:
  • Reply 24 of 39
    MacProMacPro Posts: 19,787member
    macapfel wrote: »

    If you look at the age of congress men, at least, yes, there are many that could/should retire.

    True and many act like teens.
  • Reply 25 of 39
    MacProMacPro Posts: 19,787member
    fallenjt wrote: »
    Like Jonny Ive said about Swiss watchmaker were fcked last time: cable TV providers are fcked this time.

    Yep another Industry Disruption is underway. 20% of Apple's revenue is one hell of a chunk to extract from the hides of the cable companies, I look forward to watching their demise.
  • Reply 26 of 39
    MacProMacPro Posts: 19,787member
    dasanman69 wrote: »
    They sure act like it. :lol:

    That could be an insult to retired people, teens not so much ... :D
  • Reply 27 of 39
    Quote:
    Originally Posted by Maestro64 View Post



    This assume that Katy Huberty of Morgan Stanley has even an oz of a clue what the deal will be between Apple and the content providers. It appears that Apple is not even taking a cut, they my only make money on the hardware in this case and to extrapolate that into % of apple revenue it pure speculation



     

    Why would you say that "It appears that Apple is not even taking a cut"? That would actually go against all other media deals that they have previously struck. They currently get a cut on all of the itunes movies, tv shows, etc. that they either sell or rent. They get a cut on all music they sell. They get a cut on the Beats Streaming Service. The get a cut of apps sold, they get a cut on books sold. There is nothing to indicate they would not be taking a cut.

  • Reply 28 of 39



    Apple is becoming a Cable Company WITHOUT CABLE.  It essentially is replacing Comcast as a cable company.

     

    The differences that Apple has with Comcast are:

    * Apple doesn't create content - it only provides the access to the content. In contrast Comcast owns NBC Universal so creates content also.

    * Apple doesn't provide the cable - it uses your internet service. Comcast can provide the cable and internet service.

    * Apple doesn't provide a DVR - the only advantage that Comcast has, other than massive access to content for a high price.

    * Apple can provide GAMES AND APPS on a new AppleTV - something Comcast can never do.

    * Apple can allow users to choose individual channels - like HBO - on AppleTV - something Comcast loathes to do since weak channels are subsidized by stronger ones.

     

    For now, Apple provides a limited bundle of channels.  But that can easily grow to what Comcast has now. And individual content providers such as HBO can create their own channel on AppleTV.

     

    So eventually, there may be a point that the need for Comcast is gone for the vast majority of users - other than as an internet service provider - a dumb pipe.

  • Reply 29 of 39
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by NOFEER View Post



    The new Apple TV needs to be a convergence device make it converge

    all your products and teach it how to select and switch from television cable box etc.

    use Siri to tell it to play

    DVD

    Start Apple tv

    Include DVr

    also have a model that includes AirPort Express to expand your network have multiple bundles as close as alacart as possible

    Multiple hdmi inputs

    Boom massive adoption



    OK, I know I'm being utterly stupid here, but what would multiple HDMI ports get you?

  • Reply 30 of 39
    maestro64maestro64 Posts: 5,043member
    chrisbklyn wrote: »
    Why would you say that "It appears that Apple is not even taking a cut"? That would actually go against all other media deals that they have previously struck. They currently get a cut on all of the itunes movies, tv shows, etc. that they either sell or rent. They get a cut on all music they sell. They get a cut on the Beats Streaming Service. The get a cut of apps sold, they get a cut on books sold. There is nothing to indicate they would not be taking a cut.

    Simple, it been widely reported that HBO deal did not include apple getting a cut and their standard cut on music and Apps was 30%. HBO is not going to agree to $15 price and give Apple $4.50 of it when they get more from the cable guys. You can not compare beats they own beats so pay a licensing fee to the music companies. Could Apple be taking a cut, yes but it is not going to be 30%. When HBO and other licensing their content to cable operators they get a flat fee per subscriber and the cable companies make you pay some portion of this and then make up the different plus more with advertising $. Apple is not going make money off advertising this means they would have to be more like google who want a cut of the ad $.

    The big war in the Cable industries is the fact content owners wanted a cut of the Ad$ verse getting a flat fee. Notice the apple deal said that Apple was going to allow content owners to control if they want to offer content with or without Ads, this means they will now get to negotiate Ad deals directly with advertisers verse being one step removed.

    Maybe Apple did some sort of profit sharing deal, verse a flat fee. It all guessing on anyone part at this point. I know enough to know the Analysis do not know enough to project any earnings on this model.
  • Reply 31 of 39
    dasanman69dasanman69 Posts: 13,002member
    chrisbklyn wrote: »
    Why would you say that "It appears that Apple is not even taking a cut"? That would actually go against all other media deals that they have previously struck. They currently get a cut on all of the itunes movies, tv shows, etc. that they either sell or rent. They get a cut on all music they sell. They get a cut on the Beats Streaming Service. The get a cut of apps sold, they get a cut on books sold. There is nothing to indicate they would not be taking a cut.

    They don't get a cut from Netflix.
  • Reply 32 of 39
    Quote:

    Originally Posted by Maestro64 View Post





    Simple, it been widely reported that HBO deal did not include apple getting a cut and their standard cut on music and Apps was 30%. 

    This was not widely reported. It was widely reported that no one knows what the deal was between HBO and Apple and speculation that it was probably lower than their normal 30% cut.

    http://www.nytimes.com/2015/03/10/business/media/hbo-streaming-to-start-in-april-on-apple-devices-only.html?_r=0

     

    And you are apparently unaware that HBO only gets about 50% of the money for each subscriber through a cable company. The 30% Apple normally charges will look very tempting to them

    http://www.theatlantic.com/business/archive/2012/06/3-very-simple-reasons-why-you-cant-get-hbo-go-exclusively/258209/

  • Reply 33 of 39
    Quote:

    Originally Posted by dasanman69 View Post





    They don't get a cut from Netflix.

    A small bit of research and yes, Netflix does pay a subscription fee if the subscription was made on the Apple TV

    http://mashable.com/2012/03/09/apple-tv-netflix-subscriptions/

     

    You can bet your bottom dollar that if they setup a subscription tv service on the Apple TV that they are not going to give to the Media Companies for nothing

  • Reply 34 of 39
    dasanman69dasanman69 Posts: 13,002member
    chrisbklyn wrote: »
    A small bit of research and yes, Netflix does pay a subscription fee if the subscription was made on the Apple TV
    http://mashable.com/2012/03/09/apple-tv-netflix-subscriptions/

    You can bet your bottom dollar that if they setup a subscription tv service on the Apple TV that they are not going to give to the Media Companies for nothing

    I'll bet it's nowhere near 30%
  • Reply 35 of 39

    I'm sure that Apple is doing whatever percentage makes the most business sense for their bottom line and will also draw in media companies to signup. That's what they always do, very well. Too many people on here seem to think that Apple is going to be doing this at break-even or a loss and that is not the Apple way when they offer a service (at least it's not the plan). They may percentage-wise make more money on their hardware but they also make a lot on their services. Many companies would be a Wall Street darling just making as much money as Apple does on their various media services. They are not  jumping into becoming a dominate broadcast media delivery company with just the plan of being a dominate broadcast media company. They want to do it much better (which is a low bar the cable companies have set) and they will do it while taking a lot of money away from the Cable companies.

  • Reply 36 of 39
    dasanman69dasanman69 Posts: 13,002member
    chrisbklyn wrote: »
    I'm sure that Apple is doing whatever percentage makes the most business sense for their bottom line and will also draw in media companies to signup. That's what they always do, very well. Too many people on here seem to think that Apple is going to be doing this at break-even or a loss and that is not the Apple way when they offer a service (at least it's not the plan). They may percentage-wise make more money on their hardware but they also make a lot on their services. Many companies would be a Wall Street darling just making as much money as Apple does on their various media services. They are not  jumping into becoming a dominate broadcast media delivery company with just the plan of being a dominate broadcast media company. They want to do it much better (which is a low bar the cable companies have set) and they will do it while taking a lot of money away from the Cable companies.

    Wrong. iTunes was meant to be break even, and was exactly that until 2013.

    http://allthingsd.com/20130325/itunes-not-exactly-break-even-anymore/
  • Reply 37 of 39

    Right. Apple is making a lot of money now on iTunes taking a 30% cut on much of the media. It is working very well for them. Many other players a trying to work on razor thin profit margins or are losing money and that is there main source of revenue. Apple is going to do what works well for them and that has not been giving away stuff for free to Media Companies. They build a service that media providers are willing to pay a nice percentage for. It's why Netflix agreed to pay a percentage. It's why HBO agreed to pay a percentage (even if we don't know what the deal is). Apple is not in the free business when it comes to content providers. They have MONEY and Apple will use it to build a service that people want.

  • Reply 38 of 39
    solipsismysolipsismy Posts: 5,099member
    chrisbklyn wrote: »
    Too many people on here seem to think that Apple is going to be doing this at break-even or a loss and that is not the Apple way when they offer a service (at least it's not the plan).

    I don't think Apple would invest in such a large endeavour if they were losing money but we can only assume what they'd do.

    There seems to be some evidence that their original Apple TV was not the product they either wanted or expected it to be. Remember how they oddly showed off the "iTV" about 8 months before it launched and only had the MGM Group onboard for movies and TV shows.

    That didn't really work out for Apple. Some of the guesses for their resistance was change, security, Apple wanting 30%, and fear that Apple would do to them what Apple did to the music labels. Once the media studios finally came aboard there was talk of Apple having to alter their pricing dramatically to get them onboard. Based on the long delay I think that's a reasonable assumption.

    I don't think they even had TV rentals in place. I believe it's possible this unusual demo was to show the content owners and studios — not us — that Apple had a secure way for them to distribute their content. (That was well before every studio had their content online across multiple services.)

    dasanman69 wrote: »
    Wrong. iTunes was meant to be break even, and was exactly that until 2013.

    http://allthingsd.com/20130325/itunes-not-exactly-break-even-anymore/

    1) We don't know when Apple's iTunes/App Store/SW/Services finally wasn't break even (or even if it is, since they could work it like a non-profit by pushing all profits into investments, like data centers). I suspect it was probably within a year or two of iTMS and iTunes for Windows launched.

    2) I'm not sure it was ever meant to only be "break even." That sounds like a Jobsian comment to me where he undersells Apple's benefit knowing that economies of scale would result in a much better return, and I imagine the growth of iTMS far exceeded anything even Jobs could have predicted. IOW, by the time the App Store came around in 2008 I'd say that it was already profitable, and was even more so with its launch.
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