Apple’s move into content creation could devastate Netflix and Amazon

“Apple funding content creation could remove the advantage Netflix and Amazon have enjoyed, as well as the leverage of traditional TV and motion picture studios,” Mark Hibben writes for Seeking Alpha.

“Assuming that Apple can hire the requisite talent, Apple will probably have a very good chance of bettering the content quality of Netflix,” Hibben writes. “Apple will be able to attract the best talent and field the best offerings because of its huge resources… This content will almost certainly go into a streaming video service for the current and next generation Apple TV systems.”

“Apple distributing its own exclusive content also offers a couple of other advantages. The first is that production can take place overseas, so that it can be funded by the offshore component of Apple’s cash, about 90% of the total. The other advantage is that marketing costs can be very effectively limited,” Hibben writes. “Netflix and Amazon have probably a year’s breathing space. Depending on how secretive Apple is about their content efforts, Netflix and Amazon investors may go on blithely assuming that their companies’ positions will go unchallenged. Once Apple’s content efforts are revealed, I expect the Netflix stock bubble (and to a lesser extent Amazon’s as well) to burst.”

Read more in the full article here.

MacDailyNews Take: There is a finite amount of top flight producers, writers, directors. The company with the deepest pockets (and the willingness to reach into them and dispense the contents) wins this game.

SEE ALSO:
Why would Apple want to make their own movies and TV shows? – September 1, 2015
Apple exploring entry into original entertainment production – August 31, 2015

18 Comments

  1. Amazon makes 90% of its income from sales, not entertainment. I doubt Apple entertainment would destroy it anymore than iBooks destroyed it. So many articles about Apple destroying this and that. Apple Music has shown that it is not destroying anything. 11 million users out of 100 million iTunes accounts? It will be a long time earning that 3 billion dollar mistake.

      1. All this devastation produces is another Apple sell-off. Apple isn’t seen as destroying any company except maybe itself. Apple is likely past the point of exciting any investors with some future products or services. Everything Apple does is pretty much seen as ho-hum.

  2. Are they gonna ‘devastate’ Netflix the say way Apple Music is ‘devastating’ Spoitfy??

    Don’t get me wrong. I love Apple, but unless they introduce something truly disruptive there’s NO WAY they’re gonna catch Netflix.

  3. Apple entertainment would buoy, rather than destroy Netflix or Amazon, as cord cutters move away from cable TV and the addressable audience to non-traditional streaming media increases. As the traditional media sphere consolidates under draconian conglomerates like Comcast, peoples’ viewing preferences are getting stomped because of bias and bad programming. Apple Entertainment will fill a programming void left by Comcast who ignores its customers in favor of SHITFUCK corporate dogma.

    1. This is a likely scenario. As consumers begin to drop cable companies, they will create their own lineups, utilizing the services that cater to their tastes. We will be able to choose our own bundles, and pay less over all.

      If I pay for AppleTV, HBO Now and Netflix, I will pay much less than what I currently pay to Comcast.

  4. Long form entertainment is the new movies, like Game Of Thrones and so many others we’re seeing in this new Golden Age of Television offerings. I’m in the industry and I get bored by the limitations of cinema, and the ticket prices for which only one ticket or two is mostly the price of the Blu-Ray. From theater to disc or online viewing, the window there is now so short anyway, and who’s in a rush? Certain films like the recent MAD MAX though are event movies best served by a great venue with superior sound & digital projection. Most though, not so much.

    Anyway I look forward to our new Apple Entertainment Overlords should that happen.

  5. I’m sorry but: Thinking of Apple going into ‘content creation’ is total fantasyland. Devastating Netflix and Amazon with Apple created content is an absurdity. It constantly astonishes me how little certain people comprehend Apple the company, and how little the comprehend how functional companies work and succeed. Apple is a focused company. Keep it that way. Let organizations with actual media content creation skills devastate Netflix and Amazon with superior media. Kind of simple.

    1. In the eyes of a journalist telling a story, it’s always about competition. Good vs evil and the story is always made into a black or white choice with no shades of grey. In the real world, most industries have multiple companies with each company taking a worthwhile share of the action. As Tflint says, Apple can provide competition with devastating the industry.

      In the linked article Mark Hibben makes a very good point that if Apple produces content which is shot outside of the US, it can do so without needing to repatriate cash earned from overseas. The other important thing to remember is that although the executive producers will know where the money is coming from, the rest of the operation can be done under the name of a company that nobody has heard of. Apple could finance content production at any time and nobody need know that they are doing it until it’s shot, edited and ready for distribution. For all we know, they might already be quietly doing exactly that. It’s not as though Apple has a need to keep telling people what it is hoping to do in the future, it just goes ahead and gets on with it, only talking about it once it’s finished and ready for release.

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