In the end, there should be lots of efficiencies available to whoever can get a streaming deal set up and they should be able to offer content at lower prices than the cable companies do now. A streaming provider doesn't need to carry the infrastructure of the cable company...they wouldn't need the customer service, the installers, the coax cables, the cable boxes, the local license fees, etc. They would simply need the content. So it's not at all unreasonable to think that a decent package could be put together for something in the $40 a month range and that Apple could still make a lot of money. Yes, it may result in the cost of internet services rising as that will become the new utility that people will need to get physically installed in their homes and it won't be sharing it's costs/income with the cable TV part of the business like they do today. The internet companies will surely grouse about Apple (or any other streaming provider) freeloading on their network, but that's really not any different from how they complain about Netflix now. The business models of both ISPs and TV Service Providers will change.
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Apple Shows Interest in Buying Time Warner Assets for Streaming TV Service
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Cash flow is king, recurring revenue from both streaming video and music would be amazing for Apple. All of those cash reserves are just sitting there. Plus this is potentially really good for consumers, and Apple seems to actually care about customer experience.
I totally agree that getting into the content creation business is a big stretch from Apple's core competencies.
However, one quibble. Acquisitions like this can actually be "free" for a company like Apple. Apple could issue stock for a stock swap. Issuing stock is free. Now before you scream "shareholder dilution" if Apple issues $80B in stock and the market views the acquisition as valuable and worth more than $80B, then Apple's share price will rise cover the dilution. And if this creates enough future cash flow, then in the long run that covers the dilution issue as well.
But as you said this seems very distracting for a hardware/software company. They might as well just open up a record label and try to sign Taylor Swift and Adele. It is the same thing.
What evidence is there that Apple spending $60-$70B on TW is the best way to get recurring revenue streams? Apple didn't need to buy a record label to create Apple Music. Plus we don't have solid evidence that consumers even want skinny bundles. I'm not going to pay $40 for 20-25 channels decided by Apple. I'll keep my DirecTV subscription where I can watch whatever I want and I don't have to worry about data caps with my ISP.
If Apple bought TW they'd be in direct competition with the very content they want to attract for these recurring revenue streams. It could even force Bob Iger to have to leave the board because of a conflict of interest. Apple's role should be to create the best platform to distribute other people's content. I don't think spending $60B on an old media company is the way to do it.
And note they didn't do that with Beats/Apple Music. The stock is flat to down today. CNBC spent all of 1 minute on this story (and it was basically dumb idea Apple) which tells me it's really not a story.
About time. Apple should have been doing this a long time ago. They should have started with Netflix.
As a shareholder, I'm vehemently against this.
This is known as "money burning a hole in your pocket".
Meaning: you have lots of money/you're bored/you don't need or want anything/
but you buy something anyway, just to be "buying something".
I'd rather they use that huge cash horde and buy something like an NFL & MLB streaming liscense.
This is known as "money burning a hole in your pocket".
Meaning: you have lots of money/you're bored/you don't need or want anything/
but you buy something anyway, just to be "buying something".
I'd rather they use that huge cash horde and buy something like an NFL & MLB streaming liscense.
They'd be in competition in the live TV sense. But content is content, and providers want content. It hasn't harmed Comcast in the slightest. Nor did it harm Time Warner prior to them spinning off the CableCo.
And Bob Iger, I believe he has intentions of retiring after 2018 anyway. I don't see how this type of content ownership would conflict with anything between his board presence and his actual employment at Disney... Disney already has a contract with Netflix for first-run films that extends beyond his planned retirement. All that would be an issue is if Disney has any intentions of making a bid themselves, and him having inside knowledge on what a potential Apple bid would be... and if the concern is their relationship with Disney should he leave, they still have Laurene Powell.
Thats true. Those who watch INFOMERCIALS certainly wont have their "needs" fulfilled by Netflix... then again, how else can you but things like this:
a four-pack of ShamWows at $20 ($5 apiece) is the once-in-a-lifetime steal
If Apple can just get rights to stream and provide ala-carta package similar to to Time warner is doing in NYC with free Roku so now Apple and TWC ships Apple-TV with each subscription. Apple provides platform and rights to stream and make money off hardware and TV package like music streaming.
Those little channel apps on the AppleTV are nearly worthless. You need to pay for a cable/satellite to view free OTA content? Whaa? I have a massive deep fringe antenna and cannot get all of the OTA stations because of terrain and just frankly poor broadcast quality. Broadcasters have little motivation to provide free OTA TV to the 2/3rds of Americans without accessing to good OTA transmissions. Being forced to pay for FREE TV on these streaming channels is such an insult---the broadcasters provide an inadequate service OTA and then try to push everyone to cable/satellite so they can double dip their income. The foxes are in charge of the hen house.
Netflix is only 1 channel. If Apple offered 15-20 channels including the major networks $30-40 would be a GREAT deal.
Remember what happened to Comcast after purchasing NBC Universal??? They immediately had more skin in their own game. Playing nice but hard-balling negotiations clearly isn't working... This type of acquisition is exactly what Apple needs to do in order to begin their foray into TV. As soon as one of the media companies fold (whether by choice or acquisition), the rest will follow... They'll have to!
I agree that Apple should get live sports, but the NFL and MLB seem unlikely right now. It's more likely that by purchasing the Time Warner content, which is currently being put up for grabs, they would legitimize their service, bringing over other content. Time Warner owns TNT and TBS, both of which broadcast NBA and MLB games, if I remember correctly, and considering that the NFL and MLB are not currently negotiating sales of their broadcast licenses, it would make more sense to go with this move now to start off the streaming TV service, rather than waiting for availability from the NFL.
If you were offended by my comment I can give you a hug. My point was that Netflix is one service with some original material and a whole bunch of old movies and tv shows...might not be enough for some people.
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Maybe you didn't understand my post.
If this deal goes through they will have access to both. Apple already has a partnership with Disney
I say it's promising. But if Apple closes the deal my concern is how high they'd price the service. Apple wants all the money...
But Apple doesn't own Disney. Why can't they have a partnership with TW too?
No, but I do know that their intended acquisition of Time Warner cable was a bust.
I get an Apple car because cars are going to become computer on wheels. And all the research Apple is doing with battery technology would certainly benefit them in other areas. But owning cable channels, comic books and movie studios? I'm sorry but I think that's nuts. Apple has a lot of irons in the fire right now. Think of all the new stuff introduced under Tim Cook - major software redesigns, larger iPhone, iPad Mini, iPad Pro, Apple Watch, two new operating systems (watchOS and tvOS), all these software kits (HealthKit, HomeKit, CloudKit, ResearchKit), CarPlay, Beats, Apple Music, Apple Pay, Apple News, Proactive, IBM & Cisco partnerships. And then rumored to be working on a car and different health related products and certainly stuff around AR/VR and AI. Oh and I wouldn't be surprised if there is work going on to do a lot more with iMessage as a platform. And there's certainly more they can do in the education space.
I know Wall Street is obsessed with worry over iPhone sales and Apple needing to come up with new revenue streams. But I worry about Apple spreading itself too thin and that's how we end up with beta products that are unfinished, unpolished and buggy.
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