The Big Picture
Apple is not getting into video content to boost its services revenue. Instead, video and music streaming will be positioned as ways to increase the value found in using Apple hardware.
Apple sees itself as the company best able to bridge the gap between Hollywood and Silicon Valley - a technology company with a range of devices and
a loyal base of more than 700 million premium users that values high quality content. In addition to scouting programming ideas on its own,
Apple will take a few pages from its Apple Music playbook to embrace, and potentially partner with, existing content companies on original programming ideas if the right opportunities arise. Hollywood isn't Apple's enemy.
When comparing Netflix and Apple Music paid subscribers, it becomes clear why using Apple Music as a type of incubator for Apple's video streaming service ends up being such an interesting twist. By using original video content to boost Apple Music, Apple already has nearly 20M paying viewers accessing that video content. This compares to Netflix's 83M user count - not bad for a 16-month-old paid streaming service. As the amount of additional video content increases, Apple hopes this will further increase Apple Music subscriptions, thereby improving its video chances. Apple's $3 billion Beats acquisition was a Trojan horse into Hollywood.