AppleTV+ is competition? LOL
Depends on your definition.
Spotify and Apple Music are clearly competitors because they are mutually exclusive. People rarely ever subscribe to both services, and a user who subscribes to apple music stops being a Spotify subscriber (and vice versa).
With video streaming, the dynamics are different. There is no monopoly on good content, there is nothing stopping a user from subscribing to multiple streaming platforms for their original content, and in this context, it's wasteful for each platform to have their own back catalogue if a lot of it is just going to be duplicated anyways.
For me, I am subscribed to Netflix and disney+, while I have TV+ due to my Apple One subscription. Oddly enough, Prime doesn't seem to be working all that well in my area as I find I am not getting any of the newer content (might be a regional thing, or a bug with my app?). Either way, I subscribe to Prime primarily for the free amazon delivery, and less for the video content. A better back catalogue is unlikely to get me to spend more time inside the app or improve engagement with me in any meaningful way.
Personally, I am glad Apple passed on acquiring MGM. I doubt the back catalogue will be as impactful as people make it out to be, and ultimately, what matters more is owning the means of creating and distributing your own content.
A lot of the content that Amazon has acquired is past its prime, really, and Apple is better off using that money to hire talent from Sony to build out their own production studio from scratch. We see this with a lot of their services, where Apple has chosen to pursue organic growth by starting from scratch, rather than buying market share (which is why the "Apple should acquire Netflix" argument has never made sense to me, and it also never will).
In a sense, this reminds me a lot of the time Amazon acquired whole foods. It was a huge, flashy acquisition that got them a lot of press back in the day, but ended up not going as well as people initially thought. And I think that is the problem with a lot of the analysis that goes on here. People are too easily wowed by big, flashy moves by companies (think the foldable phone announced by Samsung in 2019 and the accompanying uproar over Apple supposedly not innovating enough), and they don't spend enough time thinking through the implications or the merits of such a move.
Their view of the world is basically based on what they see around them most - cost leadership, divisional organizational structure, growth through M&A's, engineering-led. For them, Apple, being a design-led company, is a puzzle as it is different in every single way and brings them discomfort.