Apple's billion-dollar video investment seen leading to Netflix competitor
Not content with just Apple Music subscriptions, a new prediction says Apple could be gearing up for an "all in one Apple video and music offering," offering original content for a monthly fee within the next two to three years.
According to an analysis of the situation by Loup Ventures, Apple will grow its unique video content budget by an average of 54 percent every year through 2022. While the magnitude of the spend is less than that of Amazon or Netflix, the average growth eclipses both.
Apple is expected to "have a running start" at an estimated 75 million subscribers, which is a threshold for a "winning content platform," according to Loup Ventures. While Apple's main competitors should be Amazon and Netflix, the streaming video field is crowded, with more than 200 subscription services available to customers.
The report also expects that Apple will stay clear of catalog licensing, and focus heavily on original content. While Apple's lucrative Services segment will grow, gross margin might decline by up to 5 percent as a result of the expenditure on content in advance of a rebranding that may encompass Apple Music, and the assorted iTunes content stores.
Apple's latest move in unique content is a new morning show-related drama starring Jennifer Aniston and Reese Witherspoon on tap. Also, Apple has reportedly given a blank check to Drake to produce whatever shows or movies he wants.
In October, Apple signed a deal with Amblin Television and NBCUniversal to revive "Amazing Stories," an anthology science fiction series created by Steven Spielberg that ran for two seasons in the 1980s. Apple is expected to air 10 episodes, spending over $5 million on each show.
All three ventures are believed to be part of a broader $1 billion investment in original video programming, concentrating on big-budget dramas similar to "Breaking Bad" or "Game of Thrones." Those efforts are reportedly being led by the June hiring of former Sony Pictures Television executives Jamie Erlicht and Zack Van Amburg, as well as development head Matt Cherniss.
According to an analysis of the situation by Loup Ventures, Apple will grow its unique video content budget by an average of 54 percent every year through 2022. While the magnitude of the spend is less than that of Amazon or Netflix, the average growth eclipses both.
Apple is expected to "have a running start" at an estimated 75 million subscribers, which is a threshold for a "winning content platform," according to Loup Ventures. While Apple's main competitors should be Amazon and Netflix, the streaming video field is crowded, with more than 200 subscription services available to customers.
The report also expects that Apple will stay clear of catalog licensing, and focus heavily on original content. While Apple's lucrative Services segment will grow, gross margin might decline by up to 5 percent as a result of the expenditure on content in advance of a rebranding that may encompass Apple Music, and the assorted iTunes content stores.
Apple's latest move in unique content is a new morning show-related drama starring Jennifer Aniston and Reese Witherspoon on tap. Also, Apple has reportedly given a blank check to Drake to produce whatever shows or movies he wants.
In October, Apple signed a deal with Amblin Television and NBCUniversal to revive "Amazing Stories," an anthology science fiction series created by Steven Spielberg that ran for two seasons in the 1980s. Apple is expected to air 10 episodes, spending over $5 million on each show.
All three ventures are believed to be part of a broader $1 billion investment in original video programming, concentrating on big-budget dramas similar to "Breaking Bad" or "Game of Thrones." Those efforts are reportedly being led by the June hiring of former Sony Pictures Television executives Jamie Erlicht and Zack Van Amburg, as well as development head Matt Cherniss.
Comments
I think everyone would agree Apple sits in strong positions lots of money. 1B users world wide, they can create and own new content with no limits of how they use it or which markets they sell it, is much better position than someone else owning the content.
Also, those who watch streaming content is more interested in what is new verses what is old, very few young people are interested in watching shows from yesteryear.
And only defence contractors are ever given a ‘blank cheque’.
For Apple I think it's a risky bet going for original content only - it'll have to be REALLY good to get subscriber numbers up. I know personally and from many others around me, the majority of our netflix usage is not the original stuff but the back catalogues from other producers. Guessing no films on the apple service either.
Netflix has a bunch of junk I’ll never watch... (I’ll use a free trial occasionally)
We’ll see about Apple, but the inability to move music & videos between devices (platforms) is a major reason why I’m sticking with Amazon.
My last phone was an Android, my IPhone is better... but who knows what the future holds.
It has not been working..... for years...
Apple Music is the most significant and clearest example of this. Despite the obvious benefits of Apple Music (e.g. Siri, nice UI), and despite the many advantages in terms of ability to negotiate deals with the music industry, have a large music library, etc... Apple Music is still behind in their competitors in terms of usability and enjoyment.
It is widely thought/accepted that Apple Music is only good for pop music, and maybe hip-hop. That's about it. Very popular and continually growing categories like EDM are all but neglected.
The most obvious and salient example of Apple Music's deficits is that after years of dominating the music industry, Apple Music still sucks at sub-genre support. That should be the FIRST thing you get right.. being able to allow people to listen to what they want...THEN you try to swing for the fences like they're doing now. But for every home run suggestion there's 3 obnoxious strikes that completely ruin the experience. It's very hit or miss, which makes it impossible to rely on on a regular basis, which means, for most people, it's not worth it.
Another glaring deficit is the, still, completely inept social/personal-expression functionality.
Strangely, Apple Music goes completely against Apple's MO for every other (very successful) product, which are designed to 'get out of the way' of the user and facilitate the user's personal experience. Instead, with Apple Music, we get to listen to whatever the Apple/Beats DJ-gods feel is the best for us to listen to. It's frustrating. And it's also kind of minboggling that it hasn't improved, despite years of (squandered) time.
I disagree with catering to less popular genres first. That actually goes against logic.
Looking at the charts is Apple really around half of Spotify’s subscribers? That’s amazing. And already passed Hulu?!
I am not sure Apple is brave enough to do this...brave in other ways but not with culture and taste. Examples include recent censorship of carpool karaoke and an app store that forbids nudity etc. Where is Dr. Dre’s promised show with nudity and gratuitous violence?