MGM Held Talks With Apple and Netflix to Gauge Interest in Acquisition

[Michael Scrip]

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.

I'm just saying it kinda stinks.

You'll need one monthly streaming service for one franchise... and another monthly streaming service for another franchise... etc.

I guess it's inevitable... but it still stinks!
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James Bond back catalog.
Bond Cinematic Universe
Miss Moneypenny nightly talk show
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You've convinced me... I'll sign up!

 

[jlc1978]

Wonder how long the consumer will tolerate a zillion streaming services (as I see the Picard ad here for CBS). There will need to be some kind of consolidation and now isn’t the time to overpay. Apple can sit in the side line with their huge pile of cash and jump in later when valuations drop.

I’m not sure most care. If one or two give them 80% of what they want they’re happy and the existance of other choices is irrelevant. Fans of a particular genre or series will subscribe to more to get what they want. What I think will happen is Netflix getting less valuable as content is pulled start a death spiral. Amazon is in a better position as they have diverse revenue streams plus offer sale and rental revenue to content owners.

 

[chewbaka]

James Bond back catalog.
Bond Cinematic Universe
Miss Moneypenny nightly talk show
Q Branch tech news

Your World Today with M
Valentine Dmitrovich Zhukovski sitcom

 

[jlc1978]

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.

Ah, the beauty of the leveraged buyout. Buy a company and load it with debt, strip all the cash and assets you can, and leave the debtors holding the bag. Lather, rinse, repeat.

 

[shapesinaframe]

That ship has mostly sailed anyway. I figure five years from now physical media will be dead.

They said the same thing about vinyl records.

 

[JoeShades]

They said the same thing about vinyl records.

They said the same thing 5 years ago about physical media.

 

[srivari Health care]

Seems like that would be a big win for Apple, if this comes to pass, given the rich heritage of MGM movies.

Hi. Yeah, of course. Will be do in future like your words

 

[FightTheFuture]

Stuff like this would make me much more interested in Apple streaming service. At least to get me to start using my free year... nothing else on there interests me.

If you haven’t activated it yet, don’t sit on that free year, you don’t know when that promotion will end. Lots of Beats headphones are sold with an expired 1-month trial of Apple Music.

 

[cmaier]

They said the same thing about vinyl records.

and they weren’t wrong

 

[orbital~debris]

I hope who ever buys it relaunches the Stargate franchise.

If this happens we could see Brad Wright revive Stargate.

Visited thread mostly to make a Stargate comment.

Maybe Apple can redesign it in new materials, or at least offer the Stargate in space grey.

But if we’re talking the DHD as well, let’s hope they don’t roll out iOS 13 for that… it already has a pretty compelling UX.

 

[ipedro]

James Bond is highly recognizable but there isn't a lot of value to AppleTV other than the back catalogue. A Bond film comes out every 2-3 years. Anything more frequent and they risk souring the brand. It's a formula MGM has followed carefully for decades.

On the other hand, The Handmaid's Tale is one of the best written shows on TV and has a loyal following. It would absolutely attract new viewers to Apple's subscription service and it can go on for several more seasons and beyond that, into the follow up Margaret Atwood book. It would be a fantastic addition to AppleTV+.

Properties like Mad Max have a ton of world building potential. A TV show in the Mad Max universe would be incredible. I like this!

 

[MacsRgr8]

Fast forward the world some 20 years from now....
Most companies will be part of Apple, Alphabet, Amazon or Microsoft.

 

[Abazigal]

Fast forward the world some 20 years from now....
Most companies will be part of Apple, Alphabet, Amazon or Microsoft.

Apple doesn't look like the sort of company to do large-scale acquisitions. It's more likely that they develop their own in-house answer, prop it up with the strength of their platform and drive everyone else out of business.

 

[waquzy]

Apple should just buy Netflix instead of MGM

 

[PickUrPoison]

They said the same thing 5 years ago about physical media.

I myself pine for the analog warmth of VHS. Digital video is so sterile and lacking in texture.

/s

 

[Black Belt]

Apple better start playing the acquisition game or AppleTV+ won’t go anywhere

 

[Abazigal]

Apple should just buy Netflix instead of MGM

Why? Netflix is a financial sinkhole, doesn’t have any useful proprietary tech, their original content is meh, Apple will likely have to renegotiate streaming deals anyways, and are probably better off building up their streaming platform from scratch.

It was a bad idea then, it’s still a bad idea now.

 

[szw-mapple fan]

Disney market cap is only 245 billion? Apple would only need half. They could theoretically do it with cash, no?

Theoretically, but Apple will need to take on a lot of debt and pay a lot of taxes as well since most of their money and assets are not in the US at the moment.

 

[ksec]

May be I am the only one who thinks Apple should not get into content business?

They should have bought Disney when they had the chance if they were into content. Now it is all too late. Disney At the current market cap it doesn't even make sense.

 

[SBlue1]

now we are talking.

 

[69Mustang]

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.

There is no flaw in my reasoning. I was answering a specific question. The question presented: Could Apple buy Disney with cash? ← That's what I answered. Now although your answer is correct, it's an answer to a question that wasn't asked.

Flawed reasoning would be me answering his question about a cash buyout with extraneous information about LBO's, stock deals, or anything other than cash. Wouldn't you agree?

 

[Abazigal]

May be I am the only one who thinks Apple should not get into content business?

They should have bought Disney when they had the chance if they were into content. Now it is all too late. Disney At the current market cap it doesn't even make sense.

I see the value in what (I think) Apple is trying to accomplish with TV+.

Basically, the original problem was that content viewing on the Apple TV was a very fragmented experience, because each company had their own app, and it’s troublesome hopping into one app to watch a particular show, then switch to another app for that show, and so on.

Apple’s answer was the TV app which attempted to aggregate all the channels together, so you get all your content in one app. This was a good idea on paper, but there was little incentive on the content providers’ part to support this because it would mean having to share screen estate with the others.

Enter TV+. I think what Apple is trying to accomplish here is to get people to have a reason to open the TV app, where they can then go on to discover other content to subscribe to or purchase. And the more stakeholders support this, the more people visit the app, and the more other companies feel pressured to support it, else they lose out in terms of subscribers.

Apple is primarily trying to create a better viewing experience for its users. I don’t see the logic of acquiring a back catalogue of say, James Bond films, which not everyone might enjoy, and would serve to only devastate sales of similarly-titled shows in its library (why buy when it’s available for free viewing?). This does Apple no good (from a sales perspective), and angers its partners.

What Apple is not aspiring to be is to become the next Netflix. There’s no benefit to the ecosystem as far as I can see.

 

[dominiongamma]

Apple doesn't look like the sort of company to do large-scale acquisitions. It's more likely that they develop their own in-house answer, prop it up with the strength of their platform and drive everyone else out of business.

They did buy Beats for billions but that was to help build Apple Music

 

[whooleytoo]

Wonder how long the consumer will tolerate a zillion streaming services (as I see the Picard ad here for CBS). There will need to be some kind of consolidation and now isn’t the time to overpay. Apple can sit in the side line with their huge pile of cash and jump in later when valuations drop.

It's certainly a deal-breaker for me. I'd happily pay a lot more for a given streaming service if it had a lot more content, but I'm not going to sign up for lots of streaming services. Lots of services, each of which have a handful of top-notch content and a lot of bundled crud. Each of which could have different apps / UIs / search, differing video quality per title and different geo-locked content.

 

[Waxhead138]

That ship has mostly sailed anyway. I figure five years from now physical media will be dead.

It will never completely die. Records have made a solid comeback....although I admit that that is a bit of an apple / oranges comparison. It's just really hard to say (even cassettes have a new niche market) what types of media will "die and stay dead."