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MGM Held Talks With Apple and Netflix to Gauge Interest in Acquisition
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This is getting old. By this I mean that old "Apple should just buy..." adage. Some think of Apple's shrunken and steadily shrinking cash hoard as if it's disposable income like an individual would have. It is not. Using @cmaier estimation of Disney's market cap at $245B and his guestimate of half of that would get the job done, his question was Apple could do it with cash. That answer is no. Apple has been spending that money on stock repurchases (smarter use of funds than buying Disney imo). As of late summer 2019 Alphabet had more cash than Apple.
Continuing to play with the cash idea, a hypothetical Disney acquisition would be more than 40X larger than the largest acquisition Apple has ever done (Beats at $3B). Bad idea imo. Disney comes with astronomical annual overhead. Most of their revenue comes from their media networks, not studio entertainment. Disney is a hydra that Apple should avoid imo. Apple's better play is to buy what they consider to be wheat (content) and stay away from the chaff that is business interests that don't align with theirs. A lot of Disney does not align with Apple.
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They desperately need more content, but I'm not sure a library of older movies should be the sole source.
Please bring back Stargate I miss it so much. Just please don't ruin it like Star Wars/Trek.
The library wouldn’t hurt, but more importantly would be the rights to make future movies. Bond, in the right hands, would by itself be very valuable.
Yeah folks still think this is still a major studio.
"... Since August 22, 2011, its headquarters have been in Beverly Hills, California.[148] MGM rents space in a six-story office building. T ..."
Metro-Goldwyn-Mayer - Wikipedia
But MGM isn't a major studio (anymore ). They have a few things left that are providing some revenue.
Does MGM even have anything worthwhile? And how depressing that Apple thinks a good product is getting a 15 or 30 percent cut on someone else’s product. What happens if more decide to pull a Netflix and don’t offer channels within the TV app or subscribing via IAP? I don’t even use the TV app for anything other than TV+ content. Don’t need to with my Roku smart TV.
Doesn't MGM still own United Artists?
I can see it now, "JOBS, Steve Jobs."
I can see it now, "JOBS, Steve Jobs."
I think the intention is more that the consumer is free to customise their viewing experience by subscribing / purchasing only the content they want to see.
Likewise, the purpose of TV+ has always been to funnel users into the TV app. It’s funny. Here in Singapore, I only have 2 channels accessible to me - Smithsonian and (recently) Tastemade, and if I try to subscribe to Smithsonian channel outside the app, it’s available only to US customers, meaning my sole option is to subscribe directly within the app, which is also more convenient at any rate.
I suspect that for many smaller channels, the reality is that they are better off offering their app within the TV app and hope that the convenience translates to more subscribers. If not for it being placed front and centre in the TV app, I would probably never have heard of the Smithsonian channel in the first place (though I have yet to subscribe to it).
Anyone who could plausibly acquire them (besides Paramount or Lionsgate, who are unlikely, thought that might actually be the best case for creating players to compete with Mouse and NBC Universal) would have no reason not to put them on Movies Anywhere, since everyone else participates.
Netflix is in debt up to their eyeballs. That doesn't really make much sense. AT&T is on a acquisition moratorium ( Time Warner) . Most of the rest are either post large acquisition ( digestion issues perhaps less worse than AT&T) or trending water themselves ( Sony/Columbia ).
This more so sound like a good "take the money and run" deal for the hedge fund owners of MGM now. ( have milked the cow and made shorter term moves to pump the cash flows ).
Actually not. At least how AppleTV Plus has been oriented so far.
"..... In March 2017, MGM announced a multi-year distribution deal with Annapurna Pictures for some international markets and including home entertainment, theatrical and television rights ...
... On February 5, 2019, Annapurna and MGM rebranded and expanded their US distribution joint venture as United Artists Releasing, marking another revival of the United Artists brand, with the Orion Pictures distribution team and films joining the venture. The decision was made to coincide with the United Artists brand's 100th anniversary. ...
.. In April 2019, MGM signed a two-year, first look deal for films with Smokehouse Pictures, owned by George Clooney and Grant Heslov. ... "
https://en.wikipedia.org/wiki/Metro-Goldwyn-Mayer#Post-bankruptcy_era
MGM has entangled distribution rights with other companies. Apple produced stuff get rolled out internationally with about zero entanglements. ( Apple has moved out to more countries quicker than anyone else has because they don't have to wonder through a morass of distribution deals. )
This highly likely would be paying gobs of money to shift how AppleTV Plus is deployed. Not sure that is a wise spend for Apple. Apple has the money to grow their service over time if they wish. There probably isn't a "make money fast scheme" that will grow quicker unless they want to get into doing business the way old school "Hollywood" likes to work. Perhaps they have hired enough "old dogs that can learn new tricks' that they'll reverse course, but that may be more risky than just growing out the way they are now.
[ If anything what Apple needs is more international sources. Not piling another $10B into greasing yet another "Hollywood" payday for a relatively small few. ]
For Apple TV+ to be successful it needs to offer a back-catalog of movies and tv shows. This would truly be a Netflix competitor. A $4.99 plan for just Apples original programming, and $9.99 plane for both original content and the back-catalog. Like Apple Music's price, make it a hard cutoff at $9.99 (you'll get Netflix switchers who are tired of price increases).
MGM would be great but Apple should be looking at a top tier property. Disney has Marvel and Star Wars, Warner owns DC Comics (Batman, Joker, Superman, Wonder Woman, Aquaman); Apple should go all in and acquire ViacomCBS which would give them Star Trek. MGM's James Bond is nice to have but I don't think it's in the same realm as Star Wars, Star Trek, Marvel and DC Comics.
Apple could use AppleTV+ as a platform to expand the Star Trek universe on TV. Star Trek: Discovery and Picard are both doing incredibly well.
CBS would also give Apple a newsroom which would fill in an important component of TV watching. CBSN is already nicely integrated in the online culture and could retain its own news brand remain at arm's length to keep Apple out of the news business directly. Then again, Apple News already has curation so maybe CBS News and Apple News could merge in a way.
CBS also comes with a Sports division, the final important leg in TV programming. CBS owns broadcasting rights for NFL games, NCAA and the PGA Golf Tour.
Aside from getting Star Trek, a CBS/Viacom would give Apple Paramount's entire movie library, Comedy Central, MTV, Nickelodeon, the CW, CNET, ZDNet, Last.fm, and Search.com. The latter two would be invaluable additions for AppleMusic and a starting point for an Apple search engine.
ViacomCBS is worth $28B, only 7% of Apple's cash hoard. It's a no brainer. Tim Cook, go ahead and pull out your Apple Watch and ask them if they accept Apple Pay.
Apple could use AppleTV+ as a platform to expand the Star Trek universe on TV. Star Trek: Discovery and Picard are both doing incredibly well.
CBS would also give Apple a newsroom which would fill in an important component of TV watching. CBSN is already nicely integrated in the online culture and could retain its own news brand remain at arm's length to keep Apple out of the news business directly. Then again, Apple News already has curation so maybe CBS News and Apple News could merge in a way.
CBS also comes with a Sports division, the final important leg in TV programming. CBS owns broadcasting rights for NFL games, NCAA and the PGA Golf Tour.
Aside from getting Star Trek, a CBS/Viacom would give Apple Paramount's entire movie library, Comedy Central, MTV, Nickelodeon, the CW, CNET, ZDNet, Last.fm, and Search.com. The latter two would be invaluable additions for AppleMusic and a starting point for an Apple search engine.
ViacomCBS is worth $28B, only 7% of Apple's cash hoard. It's a no brainer. Tim Cook, go ahead and pull out your Apple Watch and ask them if they accept Apple Pay.
Honestly an odds and ends back catalog would not appeal to me. If Apple TV+ sticks purely to apple original content they have the advantage of maintaining a high standard of quality across the board. By not introducing anyone else’s catalog they get the chance to build their own brand image. That could be powerful because regardless of whether a show they offer appeals to you, that strong brand image could give you the confidence that anything you watched would be excellently made.
Sort of just thinking out loud here, so maybe I’m really off base. Either way, a mediocre back catalog is way worse than no back catalog imo. And a handful of cult classic franchises does not constitute a good back catalog. Only good back catalog I’ve ever seen is Disney+
Sort of just thinking out loud here, so maybe I’m really off base. Either way, a mediocre back catalog is way worse than no back catalog imo. And a handful of cult classic franchises does not constitute a good back catalog. Only good back catalog I’ve ever seen is Disney+
I just can’t see Apple doing something like that. I doubt they will even buy MGM.
Well, if anyone would know, it’s you, Spock.
Gotcha.
Then why would anyone want them?
Anyway... my earlier comment was a broad look the "siloing" of content... where you have to join multiple services to get content from various sources.
Whereas you can join any music streaming service and get a largely similar catalog... TV and movies will be spread out among different services.
It was just an observation... that's all.
Thank you for the info about MGM... I had no idea how far they have fallen.
The flaw with your reasoning is that you have to buy a company with cash you have. You do not. At least not with your cash. Google "leveraged buyout".
For example KKR is trying to buy Walgreens with $70 billion in debt. Dell bought EMC with $40 billion of debt. In fact, Dell itself was bought from its shareholders by Michael Dell by borrowing something around 60% of the purchase price.
Additionally, stock can be used in whole or part. Pixar was bought by Disney in an all-stock deal, shareholders, including Steve Jobs, received Disney stock. With Apple's excellent market performance, Disney shareholders will likely to be willing to accept shares instead of cash.
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That is because music has different economics than video. Songs do not lose their value once you listen to it, if you like it or the artist you are likely to listen again. People have playlist of favorite songs that they listen to over and over. So, by being on many streaming services they increase the revenue from a song. People are unlikely to watch a video more than once unless they are a big fan (or a parent of young children), or rewatching one they watched a long time ago,and so by keeping titles exclusive they are able to extract all the revenue from a service by getting fans as well as those who want to see a movie but didn’t go to the theater. There is less reason to subscribe if you can get it on a service you already have, so companies keep their catalogue exclusive if their is enough demand and it is deep enough. The one off nature of video vs the constant consumption of music is a driver.
Gotcha.
Then why would anyone want them?
James Bond back catalog.
Bond Cinematic Universe
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