Apple Met Paramount and Sony Executives Last Week as it Flirts With Original Content

[jlc1978]

Spotify is big enough with 50M paying subscribers to stay afloat and thrive.

Considering they have yet to turn a profit I'd say they have some challenges before they are assured of survival.

The TV industry is very wary of Apl and what they did to the music industry.

Made them a ton of money once they accepted the shift in the distribution model?

As for Apl making content, let's just say they don't have style.

They don't have to as long as their partners or the studio they buy does.

 

[BoltmanLives]

Considering they have yet to turn a profit I'd say they have some challenges before they are assured of survival.
Made them a ton of money once they accepted the shift in the distribution model?
They don't have to as long as their partners or the studio they buy does.

I don't think you need to worry about Spotify, Apl does. As for Apl having their way with TV , not happening in fact YouTube's $35 plan just did what Apl has been trying years to do...why? Not apl.

Lets say apl does buy some mystery studio, they still have 88% and growing of the world not having anything to do with them nor give them a dime. Most of the world (nearly 90%) wants nothing at all to do with apl.

Apl has their fans, less than yesterday and will be even less next year, only "growth" is on the back of stay behind with apl users...ever higher RPU is the plan.

 

[2013.1]

Single subscription – all content – Apple could do it.
Apple should buy enough strategic shares of most of the content owners to make them offer their content inside apple services like tv und itunes store within a single subscription fee.

Imagine paying 10 or 20 $ and having all the content combined.

 

[jlc1978]

Single subscription – all content – Apple could do it.
Apple should by enough strategic shares of most of the content owners to make them offer their content inside apple services like tv und itunes store within a single subscription fee.

Imagine paying 10 or 20 $ and having all the content combined.

I doubt Apple could do that and not run afoul of anti-trust laws; plus companies have a fiduciary duty to their shareholders and to give Apple a sweetheart deal would violate that.

I think Apple is content too continue to negotiate and perhaps make a few key acquisitions as well as continue to grow their eco-system; knowing the deals will eventually fall in place.

 

[I7guy]

Thought you were done?

Apple’s net cash position at the end of its 2016 fiscal year would be $162.1 billion, up from $121.2 billion at the end of the 2012 fiscal year. That total, and the $41 billion gain over four years, is nothing to sneeze at, but it looks tiny compared with the $116.4 billion gain that a quick look at its cash reserves would indicate.

Lot less than half-$T tweet thing some dude posted lol

You didn't mention the stock buy-backs.

 

[Rajkumar mittal]

Apple senior executive Eddy Cue, who oversees services such as iTunes and Apple Music, held discussions last week with Paramount Pictures and Sony Pictures, two of the biggest film studios in Hollywood, according to the New York Post, but the iPhone maker's exact ambitions in the content space are still uncertain.

The report suggested Apple is looking for a "transformative acquisition" and "not just a deal to buy TV shows," while an unnamed source is quoted as vaguely saying Apple is "preparing something big."

Apple has so far only flirted with original content, which it plans to distribute through Apple Music starting later this year.

It acquired the rights to Carpool Karaoke, for example, the popular segment from The Late Late Show with James Corden, which it plans to reboot as a series of sixteen half-hour episodes on Apple Music. The trailer for the show revealed it has a similar format of celebrity pairings singing along while driving.

Likewise, Apple's upcoming reality TV series Planet of the Apps will be released on a weekly basis in the Spring. On the show, hosted by Beats 1 radio host Zane Lowe, app developers compete for venture capital while receiving mentorship from influencers Gary Vaynerchuk, Gwyneth Paltrow, Jessica Alba, and will.i.am.

Apple has sent mixed signals to Hollywood about its interest in original programming over the past few years, according to The Information.

Last year, it said Apple has met with film studios and producers about developing original TV shows to offer exclusively on iTunes, but Cue later said Apple is "not in the business of trying to create TV shows." Instead, he said Apple is willing to offer producers suggestions and guidance where possible.The report added that Apple is not interested in getting into expensive bidding wars over content with rivals such as Netflix and Amazon.

The Wall Street Journal recently said Apple plans to "build a significant new business in original television shows and movies," which it compared to the likes of HBO's Westworld and Netflix's Stranger Things. It agreed that Apple is not looking to compete with Netflix, but rather promote Apple Music.

"In terms of original content, we've put our toe in the water doing some original content for Apple Music, and that will be rolling out throughout the year," said Tim Cook, Apple's CEO, on a conference call following the company's most recent earnings results. "We're learning from that and we'll go from there."

Reports outlining Apple's interest in original content have gained momentum over the past few years alongside the iPhone maker's much rumored but since shelved plans for a streaming TV service in the United States.

Article Link: Apple Met Paramount and Sony Executives Last Week as it Flirts With Original Content

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[illnagas]

Apple is looking for a "transformative acquisition" and "not just a deal to buy TV shows," ...
.
.
.​

It acquired the rights to Carpool Karaoke

 

[aplnub]

While they could what does it get them the can't already buy separately? They'd have to renegotiate the licenses for the existing, while having said they aren't interested in a bidding war, and get a handful of original content which seems to be what they want for iTunes. For original content they can go and hire talent to develop it for a lot less than buying and running Netflix on an ongoing basis.

As for Netflix technology, they already have streaming capability and can (an should) make it better on their own either with existing talent or buy buying companies with technology they want.

Netflix is on nearly every device that exists for video streaming. They have the "in" that Apple does not have. Apple could take Netfllx in many directions.

• Netflix has original content already in a market that is still in it's infancy. Excellent growth opportunity.
• Apple needs a service to offer with growth. Netflix gives Apple this immediately.
• Doesn't hang Apple up trying to learn a new business or develop new talent so Apple can stay on task with what Apple does best.

Sorry I am just responding to your post.

 

[jlc1978]

Netflix is on nearly every device that exists for video streaming. They have the "in" that Apple does not have. Apple could take Netfllx in many directions.

• Netflix has original content already in a market that is still in it's infancy. Excellent growth opportunity.
• Apple needs a service to offer with growth. Netflix gives Apple this immediately.
• Doesn't hang Apple up trying to learn a new business or develop new talent so Apple can stay on task with what Apple does best.

While I agree Netflix has interesting technology I don't see them as having any technology that Apple can't easily replicate in house. Apple has experience in developing cross-platform streaming technology as well as browser based streaming, for example. They have server farms as well. I have no doubt Apple could easily build a solution in a relatively short time if they wanted given what they currently have in place.Technology, however is not the real challenge in a Netflix acquisition, it's content.

Much of Netflix' value is in the content it delivers. Most of that content is licensed and Apple would have to negotiate licenses as the expire, or immediately if there are change of ownership clauses in the contracts. I think, if they plan to move towards a Netflix type service, they would be better off spending the money they would use to buy Netflix for obtaining licenses to stream content.

iTunes has already given Apple a foot in the content business as well as relationships with the content owners; Apple just needs to decide on what terms it is willing to make a deal.

As for original content, Apple could easily get people to pitch ideas given the cash they have to pay for production.

In addition, Netflix' DVD service provides a profitable revenue stream so Apple would also be paying for that but I can't see Apple staying in the DVD by Mail business.

A third part of this is the ISPs. Apple has the cash to negotiate and cover preferential streaming costs without caps to help ameliorate ISP's concerns over the impact of cord cutting on their cable business; and could even bundle cable channels with a streaming offering if the wanted. Personally I think ISPs, in the US at least, will move towards selling cap free preferential delivery to streaming services to replace lost cable revenue. Data caps can quickly make streaming less affordable so companies need to find ways around it, either by paying for delivery or compressing data a la Netflix.

In short, while Netflix may be appealing from a "you get the whole setup at once" POV, I don't see it as being worth what it would cost given Apple's current situation regarding streaming and content.

Sorry I am just responding to your post.

No worries.

 

[aplnub]

While I agree Netflix has interesting technology I don't see them as having any technology that Apple can't easily replicate in house. Apple has experience in developing cross-platform streaming technology as well as browser based streaming, for example. They have server farms as well. I have no doubt Apple could easily build a solution in a relatively short time if they wanted given what they currently have in place.Technology, however is not the real challenge in a Netflix acquisition, it's content.

I don't believe the tech is a factor in the deal. As you say, would be a non-issue for Apple except for point three of my previous bullet points.

• Doesn't hang Apple up trying to learn a new business or develop new talent so Apple can stay on task with what Apple does best.

Don't forget, Apple once pulled engineers from everywhere, delaying OS X release, just to keep iOS on target. People seem to be in limited supply.

Much of Netflix' value is in the content it delivers. Most of that content is licensed and Apple would have to negotiate licenses as the expire, or immediately if there are change of ownership clauses in the contracts. I think, if they plan to move towards a Netflix type service, they would be better off spending the money they would use to buy Netflix for obtaining licenses to stream content.

When Apple purchases, they allow them to continue to do what they do without intervention from Apple for five or so years. Absolutely no funny business with management/etc.

iTunes has already given Apple a foot in the content business as well as relationships with the content owners; Apple just needs to decide on what terms it is willing to make a deal.

As for original content, Apple could easily get people to pitch ideas given the cash they have to pay for production.

I don't believe (definitely not an expert on this) original content is just that easy to curate, at least from a time perspective. It takes time from Pitch to Screen. Netflix and Amazon have huge head starts in this area. Also, AppleTV has shown just how resistant the Hollywood crowd is.

In addition, Netflix' DVD service provides a profitable revenue stream so Apple would also be paying for that but I can't see Apple staying in the DVD by Mail business.

That part is already physically separated at Netflix and will die sooner than later. Netflix disrupted the DVD mail service with it's own streaming service. No doubt who has won that battle.

A third part of this is the ISPs. Apple has the cash to negotiate and cover preferential streaming costs without caps to help ameliorate ISP's concerns over the impact of cord cutting on their cable business; and could even bundle cable channels with a streaming offering if the wanted. Personally I think ISPs, in the US at least, will move towards selling cap free preferential delivery to streaming services to replace lost cable revenue. Data caps can quickly make streaming less affordable so companies need to find ways around it, either by paying for delivery or compressing data a la Netflix.

Netflix needs cash and Apple has cash to give. Win-win IMHO.

In short, while Netflix may be appealing from a "you get the whole setup at once" POV, I don't see it as being worth what it would cost given Apple's current situation regarding streaming and content.

I really like my Apple products but iCloud, macOS and iOS need a lot of love and attention. Apple seems to do best when focused on what they do. I don't believe stepping outside that box is good for Apple. Ping? iCloud is still a bit of a disappointment.

I still believe the market expects Apple to offer more services rather than relying solely on hardware. Phones are beginning to show parity.

• Netflix has original content already in a market that is still in it's infancy. Excellent growth opportunity.
• Apple needs a service to offer with growth. Netflix gives Apple this immediately.
• Doesn't hang Apple up trying to learn a new business or develop new talent so Apple can stay on task with what Apple does best.

 

[Mac 128]

• Netflix has original content already in a market that is still in it's infancy. Excellent growth opportunity.
• Apple needs a service to offer with growth. Netflix gives Apple this immediately.
• Doesn't hang Apple up trying to learn a new business or develop new talent so Apple can stay on task with what Apple does best.

Steve Jobs sat on the board of Pixar, and sold it to Disney. Apple has been developing TV relationships since before the Apple TV debuted, offering exclusive content on iTunes when Netflix was still mailing out DVDs. They've been continually negotiating deals with major players in the TV & film business since. It's a huge assumption that Apple has to learn a new business from scratch, when it's obvious they likely have more knowledge about it than Netflix. Yes Netflix produces some original content, but most of their original content is exclusive negative pickups from third parties. Apple doesn't have to produce their own original content, all they need is to secure original content from others, even if only an exclusive holdback period from producers offering it on other platforms. Producing original content doesn't even have to occupy their time, more than a "hobby" project, on which their immediate future does not depend.

 

[jlc1978]

I don't believe the tech is a factor in the deal. As you say, would be a non-issue for Apple except for point three of my previous bullet points.

• Doesn't hang Apple up trying to learn a new business or develop new talent so Apple can stay on task with what Apple does best.

Don't forget, Apple once pulled engineers from everywhere, delaying OS X release, just to keep iOS on target. People seem to be in limited supply.

The question is how bad do they need the talent vs. using in house talent? You make a good point, and I don't know tah answer .

When Apple purchases, they allow them to continue to do what they do without intervention from Apple for five or so years. Absolutely no funny business with management/etc.

That's not the issue. The issue is what will the license holders do when the licenses expire if Apple owns Netflix? Apple has no control over that and they can easily use that as a bargaining chip with Apple.

I

don't believe (definitely not an expert on this) original content is just that easy to curate, at least from a time perspective. It takes time from Pitch to Screen. Netflix and Amazon have huge head starts in this area. Also, AppleTV has shown just how resistant the Hollywood crowd is.

Not really. If Apple opened up their wallets they'd get plenty of pitches once people see money; and if Aple is willing to pay they will quickly forget past fights.

[/QUOTE]That part is already physically separated at Netflix and will die sooner than later. Netflix disrupted the DVD mail service with it's own streaming service. No doubt who has won that battle.[/QUOTE]

Except 1/3 of Netflix's profits are from DVDs; DVD's maid up for losses overseas. That business is on the decline but it is very important to them right now.

Netflix needs cash and Apple has cash to give. Win-win IMHO.

However, does Apple need Netflix? It's not a win/win unless they get something back they really need. I'm not convinced it is worth it to buy Netflix unless they get it dirt cheap. Apple's profits were 17 Billion for Q1. Netflix' are rounding error in comparison; yet it's market cap is 61 billion dollars. Given Apple would have to pay a premium the price is simply too high to make it a good deal. Apple can easily take a fraction of the price of Netflix and create their own content.

I really like my Apple products but iCloud, macOS and iOS need a lot of love and attention. Apple seems to do best when focused on what they do. I don't believe stepping outside that box is good for Apple. Ping? iCloud is still a bit of a disappointment.

I agree, I just don't see it being Netflix.

I still believe the market expects Apple to offer more services rather than relying solely on hardware. Phones are beginning to show parity.

• Netflix has original content already in a market that is still in it's infancy. Excellent growth opportunity.
• Apple needs a service to offer with growth. Netflix gives Apple this immediately.
• Doesn't hang Apple up trying to learn a new business or develop new talent so Apple can stay on task with what Apple does best.

 

[aplnub]

The question is how bad do they need the talent vs. using in house talent? You make a good point, and I don't know tah answer .



That's not the issue. The issue is what will the license holders do when the licenses expire if Apple owns Netflix? Apple has no control over that and they can easily use that as a bargaining chip with Apple.

I

Not really. If Apple opened up their wallets they'd get plenty of pitches once people see money; and if Aple is willing to pay they will quickly forget past fights.

That part is already physically separated at Netflix and will die sooner than later. Netflix disrupted the DVD mail service with it's own streaming service. No doubt who has won that battle.[/QUOTE]

Except 1/3 of Netflix's profits are from DVDs; DVD's maid up for losses overseas. That business is on the decline but it is very important to them right now.




However, does Apple need Netflix? It's not a win/win unless they get something back they really need. I'm not convinced it is worth it to buy Netflix unless they get it dirt cheap. Apple's profits were 17 Billion for Q1. Netflix' are rounding error in comparison; yet it's market cap is 61 billion dollars. Given Apple would have to pay a premium the price is simply too high to make it a good deal. Apple can easily take a fraction of the price of Netflix and create their own content.



I agree, I just don't see it being Netflix.[/QUOTE]


*******
Very good points. How did/do you feel about the Beats purchase? I still wonder about that purchase when I see the price tag.

 

[Abazigal]

..and 30M more consumers by choice than Apl Music..the 20M on apl music most likely have a primary apl device, so the celing on apl music subscribers is quickly approaching

While still failing to make a profit.

I wouldn't put my money on Spotify being around in the near future however attractive the odds.

Apl is out of there wheelhouse, remember when Apl News was going to redefine news with Apl NEWS? Its a total joke now.

Still doing fairly well apparently.

In an article from the verge,

I don't think you need to worry about Spotify, Apl does. As for Apl having their way with TV , not happening in fact YouTube's $35 plan just did what Apl has been trying years to do...why? Not apl.

Because YouTube's streaming plan sucks. That's the difference. Both were presented the same deal. Apple felt it wasn't good enough and so didn't sign on the dotted line. Google felt that a crappy plan was better than no plan.

It's not about a difference in capability but philosophy here.

Lets say apl does buy some mystery studio, they still have 88% and growing of the world not having anything to do with them nor give them a dime. Most of the world (nearly 90%) wants nothing at all to do with apl.

Market share is the means and profit is the end.

Apple may have only 10+% market share, but I would argue that Apple has the best customers. They had the lion's share of the profits last year. Why would I want to trade all that just for meaningless larger market share?

Apl has their fans, less than yesterday and will be even less next year, only "growth" is on the back of stay behind with apl users...ever higher RPU is the plan.

Need I remind you of how far Apple has come in the last five years? Fewer fans my behind.

The iPhone installed base has grown by 500M users.
The iPad installed base has grown by 175M users.
The Mac installed base has grown by 50M users.
Apple introduced Apple Watch, the company's first wearable product. Approximately 18M Apple Watches, a device positioned as an iPhone accessory, have been sold to date.
Apple is earning more than $6B per year of revenue through app sales via the App Store.
Apple successfully made the difficult jump from a paid music download model to streaming and is approaching 20M paying Apple Music subscribers.
Apple continues to push forward with Apple TV. The company is approaching 10M units sold since the device was updated in 2015.
Apple continues to develop key services including Apple Pay, Messages, and Maps.

 

[Abazigal]

Removed - duplicate post

 

[jlc1978]

Very good points. How did/do you feel about the Beats purchase? I still wonder about that purchase when I see the price tag.

Good question. I think Apple wanted two things from that deal:

1. Access to content and Dr Dre's talent and his and Iovine knowledge of the industry and contacts to work on that.
2. The streaming service and how it works to build Apple Music; especially the curated approach to streaming.

The audio product side is nice but not that big of a deal relative to the other two, IMHO. It gave Apple some good headphones (although that could be debated forever) and speakers to support their move towards selling an ecosystem and not a computer company.

Was it worth 3$ Billion? Probably given where Apple has gone with it.

Now, one could argue buying Netflix would do the same but:

1. They don't have a Dr Dre or Iovine equivalents in the movie industry
2. Video streaming use is different than music, you don't get new stuff every few minutes and listen while often doing something else; you watch a movie or a series as a main activity. Curated content improves the former but is not needed in the later.
3. Apple already has a delivery mechanism similar to Netflix in iTunes all it lacks is a subscription model. Some may not like iTune's interface but that can be fixed if Apple decides to get into streaming and that it needs fixing.

Finally, if Apple wants original content it has the cash to get it made. It can do the same thing FX, Netflix, Amazon, CNN, HBO et. al. do and hire talent and fund production. In that scenario Netflix is in trouble since video is is main source of revenue. Amazon uses video to sell Prime memberships so they really don't need Amazon video to be profitable. Apple can afford to spend video and tie it in with Apple Music to offer more than Netflix; as well as sell digital copies if someone wants their own copy. They also can have, like Amazon, premium content that you have to buy because it is not part of the streaming service.

In short, I don't see how Netflix adds any value to what Apple has or plans to do, beyond having streaming rights to content and some original programming. It's certainly not worth it's 60$ Billion market cap to Apple.