The question is what it the value of the parts of Disney without the studio and catalog. A company could buy Disney, break it up and keep the parts it wants and sell the rest. It might even be worth more broken up than as a whole.
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MGM Held Talks With Apple and Netflix to Gauge Interest in Acquisition
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The question is what it the value of the parts of Disney without the studio and catalog. A company could buy Disney, break it up and keep the parts it wants and sell the rest. It might even be worth more broken up than as a whole.
3 billion was chump change for Apple (for comparison, Spotify has a market cap of over 26 billion). They got a fairly profitable headphone product line, a music streaming business and Iovine’s connections with the music industry.
Buying a larger company might even end up doing more harm than good because it means having to deal with said company’s different culture and values.
Given the way Apple works, they are better off acquiring smaller companies who possess technology or talent which could benefit their products. Given the incredible scale at which Apple operates, this often ends up being an incredible bargain.
So Apple doesn’t need to pay a premium to buy market share. Their incredible reach, made possible by the sheer number of Apple products in circulation, gives them an advantage in this area. Paying a premium for Netflix didn’t make sense back then, and it still doesn’t make sense now.
They could use a separate foreign entity to buy it if they wanted and no funds return to US.
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Picard seems pretty decent so far, one episode in...
Wait what? Discovery is aweful and widely loathed, and we've only had one episode of Picard. I liked it, but it's surely a little soon to say it's "doing incredibly well"?
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Don't you think Handmaid's Tail is dragging on a bit now? I think it needs to end, or at least do something new. It's all filler these days, nothing's happening.
I agree with Abazigal, and I think that could fit in with a purchase of something like MGM without the danger that Jakewilk correctly, I think, identifies: ie they could buy a company like MGM but not add the content to Apple TV+. Instead they could make a channel for that content (an MGM channel in this case). They could charge for that channel, or make it free with Apple TV+, or make it entirely free for everyone, or whatever strategy they think works best to pull more people, and then more other companies, into the TV app. That way they get the benefit of the content without altering the brand of Apple TV+.
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Cogent arguments, but I feel like the “Apple should just buy...” theme has really died down from a few years ago, to where it isn’t nearly as tiresome as it once was. Funniest one I remember was that Apple could buy the entire NFL - all the teams - it wouldn’t have much purpose, but the uproar it’d cause would be endlessly entertaining. Best idea I’ve heard is that they should buy Sonos - somewhat aligned / overlapping interests in whole-home audio, and would give Apple an easy path into home theater to reinforce their AppleTV / TV+ thrust into the living room.
Apple isn't going to buy Disney and if it did it would likely have to pay far more than $245 billion (i.e. Disney's current market cap), either in cash or equity.
But I want to clarify something about the taxes you referred to. With the Tax Cuts and Jobs Act of 2017, post-1986 foreign earnings were deemed repatriated. In other words, Apple has to pay U.S. income taxes on those earnings regardless of whether it actually repatriates them. (And by repatriating we just mean having the foreign subsidiaries pay dividends to the domestic parent. Most of the funds have long been held in U.S.-based instruments, just technically owned by the foreign subsidiaries rather than parent Apple.)
Also, going forward, there are some new minimum taxes (e.g the BEAT and GILTI tax) that may apply to foreign earnings, depending in part on how much income tax was paid on them where they were earned. But those also apply regardless of whether the earnings are repatriated.
The point is, it doesn't really matter any more - for U.S. tax purposes - whether Apple's foreign earnings are actually repatriated. It has to pay whatever U.S. income taxes apply on those earnings anyway.
The Studio and Entertainment segment of Disney is it's 3rd highest revenue/profit generator. Both Media Networks and Parks are bigger contributors. Both more than double S&E. Disney carries a debt load from the Fox purchase, the aforementioned ongoing overhead, and the incompatible segments of of the company don't make for an attractive proposition for Apple imo. Buy and break up seems like an awfully convoluted and unnecessary way to gain content from Disney's 3rd highest revenue generator. Just seem impractical imo.
More than a simple back catalogue, Apple needs franchises that create fidelity in viewers and make up for good investments (revenue is more often than not almost guaranteed). If they cannot create one they should look to buy one (or more).
Simple as that.
Simple as that.
In the end, the pirates are the only winners. All of the content; none of the added cost.
No, it's still tiresome. At least to me it is. In this thread alone Apple should buy Disney, Netflix, Sony, Viacom CBS, and probably some others I missed. I'm pretty sure you can't go to a single story on MR about this type of subject matter without multiple "Apple should just buy..." comments. Most of the reasoning typically boils down to Apple has huge cash stockpile so they can buy whatever. The "logic" tends to go down hill from there.
As for Sonos... eh. They don't really bring anything Apple couldn't do for themselves. Apple can already do (limited) whole home audio with the HomePod and expanding the HomePod line up with a variety of components would only increase it's reach. Sonos is not really a big player in Home Theater so I don't get the connection there.
I personally think the AppleTV is going to be a dead man walking in the very near future, and the ATV app is going to fire the bullet. I think not tying the service to the AppleTV hardware was the smartest move Apple made regarding ATV+. ATV+'s thrust into the living room is probably going to be spearheaded by the ATV app on TV's, Rokus, and all of Apple's other devices. Apple says the app is also coming to other devices. I'm guessing the upcoming consoles from MS and Sony will have an ATV app.
Calling vinyl a solid comeback is a bit disingenuous. The number of vinyl sales is absolutely tiny in absolute terms. It’s completely niche.
I mean, people still buy buggy whips, too, but that doesn’t mean that the horse and buggy is a living mode of transportation.
THIS! Plus, Star Trek and Twilight Zone (reboot) are highly aligned with Apple's brand.
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I'm 100% with this as well - the thing I like most about Apple TV+ is that I know whatever I watch will be worth my time. I turned off Hulu and Netflix because of the deluge of junk originals.
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There isn't a snowball's chance in hell that Barbara Broccoli or her future successor green lights all those Bond cash grabs. The Broccoli family has been notoriously careful with the James Bond brand and have nixed many spin off suggestions.
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I would rather Apple stay away from Handmaid actually - I find it too overtly political and agenda based. Apple has been very careful to steer clear from alienating any segments of their audience with politics.
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Sad to see such a label of quality product be in a sad state looking for a buyer
The problem is that a player can last over a decade which means low sales, and low sales mean no manufacturing. Its a problem where the media is easily created, but the device which you need to view them is scarce. I am willing to bet this is true for all dead media formats.
You won't, every time there is a new product service a trillion companies jump in to take a cut but in the end only few survive. In the end, only few will dominate the market, its how capitalism works.
Can you explain why its good to repurchase stocks? I never understood why a corporation buys itself back.
The problem is that a player can last over a decade which means low sales, and low sales mean no manufacturing. Its a problem where the media is easily created, but the device which you need to view them is scarce. I am willing to bet this is true for all dead media formats.
You won't, every time there is a new product service a trillion companies jump in to take a cut but in the end only few survive. In the end, only few will dominate the market, its how capitalism works.
Can you explain why its good to repurchase stocks? I never understood why a corporation buys itself back.
If they think their valuation is too low, buying stock back is a good hedge against the future when they may need to issue new stock.
Got a gift CBS sub - love "Picard" - not gonna bother with ST
(though the Pike Short Trek was good - he needs his own series as well).There's now too, too many Streaming services going on.
On my Apple TV, it suggest what to watch, I don't even know if it is something in my Library, a free streaming service (with Ads), or something I have to rent or pay for (on one thing I clicked on, my Amazon account got charged)... So, so confusing...
If Apple gets MGM, THIS:
Criterion has distribution rights, but they don’t own the underlying film. Apple could presumably make a deal to carry their content, like Criterion previously had with Hulu and then Filmstruck, should there be mutual interest. It’s an excellent collection.
But Criterion started their own streaming service so who knows whether they would want a deal. (Or if Apple would.)
Criterion is a private company, and I’m doubtful their current distribution agreements would remain in force upon a change in control. I’d expect rights would have to be re-negotiated by any potential acquirer.
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I don't know it for a fact, but I am sure Disney has some kind of poison pill provision to prevent a cash-driven hostile takeover, like you're describing.
In theory, I am sure Apple could negotiate some price to buy Disney, but why? There is a theory with pretty solid support that big companies are worth less than the sum of their parts. In other words, AppleDisney would be worth less than Apple + Disney.
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I think people will tolerate even more streaming services tbh. Some will fail of course, but I don't think we'll see any consolidation for a while.
I think what will change is people's subscribing habits. People as a herd tend to be learn how to become very efficient. I think people will begin cancelling and subscribing month-to-month as they want over time.
E.g., I'll have Netflix and AppleTV+ for January and February, then cancel those and get Peacock and HBO Max in March, but then my new favorite show comes back on Disney+ in May so I'll cancel Peacock and get Disney+ instead.
No more than 2 streaming services at any given time, but throughout the year you can watch all the good content from all the providers.
Amazon is really the smartest one by tying their streaming service to shopping. It really hinders people's ability to cancel and resubscribe month-to-month, and thus Prime will probably be the staple that people have year round.
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I would argue that the content wars are only just beginning
I am not so sure. As Apple moves it into gaming and streaming it becomes more viable as a multi use device. The killer, IMHO, is as a hub not just for games/streaming but for home automation. Eventually you could have a device that lets you control devices from a Mac, watch or phone, tells you when you have a new text or play music via an affordable speaker, warns you about smoke or lets you turn of water manually or automatically when it detects a leak, etc. Phone call while watching TV? Record the steam and let you pick up where you left off.
A Tv with an ATV app? just another device to let you use the hub.
The possibilities are endless if Apple has the vision to go there.