Netflix presumes Apple’s original content will either be bundled with Apple Music or with iOS

Netflix this week announced the company had a “beautiful Q4” achieving streaming revenue growth of 36% to over $11 billion, 24 million new memberships additions (compared to 19 million in 2016), full-year positive international contribution profit for the first time, and more than doubling global operating income.

Q4 capped a strong year for Netflix original content with returning seasons of The Crown and Black Mirror as well as the international phenomenon Stranger Things. Netflix’s largest investment in original films to date, Bright, a fantasy action movie starring Will Smith, was a major success and drove a notable lift in acquisition. In its first month, Bright has become one of Netflix’s most viewed original titles ever. The company is therefore planning a sequel as well as additional investment in original films.

Netflix also debuted Dark, their first German original drama series. In its letter to investors, Netflix says “high-quality content can travel globally, irrespective of language; for instance, Dark, in addition to being well-received in its home country, has also been viewed by millions of members in the US and has outsized watching throughout Europe and Latin America. Netflix will expand this initiative with over 30 international original series this year, including projects from France, Poland, India, Korea and Japan.

Netflix also lays out the competitive landscape as they see it:

We have been talking about the transition from linear to streaming for the past 10 years. As this trend becomes increasingly evident, more companies are entering the market for premium video content. On the commercial-free tech side, Amazon Studios is likely to bring in a strong new leader given their large content budgets, and Apple is growing its programming, which we presume will either be bundled with Apple Music or with iOS.

Facebook and YouTube are expanding and competing in free ad-supported video content. With their multi-billion global audiences, free ad-supported internet video is a big force in the market for entertainment time, as well as a great advertising vehicle for Netflix.

Traditional media companies are also expanding into streaming. Disney is in the process of acquiring most of 21st Century Fox and plans to launch a direct-to-consumer service in 2019 with a beloved brand and great franchises. The market for entertainment time is vast and can support many successful services. In addition, entertainment services are often complementary given their unique content offerings. We believe this is largely why both we and Hulu have been able to succeed and grow.

Netflix full letter to investors here.

MacDailyNews Take: That would be amazing if Apple bundled it with iOS, but we bet they want something for it. Apple Music doesn’t really make sense.

What we want to see is an “Apple Prime,” as described by Goldman Sachs analysts Simona Jankowski and Drew Borst is an October 2016 note to clients. This “Apple Prime” subscription would include the Apple Music service, access to the iTunes library of TV shows and movies (some for free), Apple’s forthcoming original content, and exclusive sports programming.

Further, we’d really like to see a way to pay for all of the Apple services we choose for one price. Give us a bunch of tick boxes and let us choose our combination of iCloud storage, Apple Music, iTunes Match, etc. and let us pay a single price for all of our choices.MacDailyNews, October 17, 2016

[Attribution: 9to5Mac. Thanks to MacDailyNews Readers “Dan K.” and “Judge Bork” for the heads up.]


  1. I can’t believe Apple didn’t enter this space back in 2013 or even earlier. Or acquire a library from Sony or elsewhere. They seem to have stayed away in the mistaken attempt to focus on core, without realizing this is an important augmentation to core.
    Even their early forays into original content are mistaken as they are trying to pick up executives talent instead of creative talent. Netflix has this down pat, giving creative license to young edgy and even international creatives. Steve had a knack of spotting these creatives but Apple appears talent blind. Their methods more resemble network television than HBO or Netflix.

    1. But Apple just rented space in Culver City to house the highly paid hangers on sucking the Cupertino rubes (Clueless Eddie Cue, et alii ) with lots of money to throw around. How much when all is said and done, Apple has less to show for the money and effort than the competition.

      Being good at one thing does not mean being good at all things or even many things. I doubt SpaceX could make a good bottle of Wine or that Porsche could make a great suit. Likewise, Apple should leave content creation to others and try to fight the ongoing Balkanization of content.

  2. “How much when all is said and done, Apple has less to show for the money and effort than the competition.”
    should say
    How much do you want to bet that when all is said and done, Apple has less to show for the money and effort than the competition?

  3. The only reason it makes any sense to use Apple Music is because of Android Support.

    You can’t tie content to a hardware platform, like iOS, and expect it to be successful.

    I’m all for making it a part of iCloud, though… I really don’t need another monthly service sucking away my money.

  4. I wish Apple the best of luck in the streaming business. Other companies do it so easily and they seem to get endless praise by Wall Street. Only Apple appears to be struggling. I’d love to see an all-you-can-eat Apple Prime streaming service but Apple never thinks in those terms. Apple is going to try to nickel-and-dime content subscribers even after selling them higher-priced hardware.

    I suppose Apple knows best and I’m only giving my uninformed personal opinion. I’m certain Apple isn’t going to lose money but will certainly take a lot of crap from Wall Street when being compared with rival streaming services. Wall Street is only concerned with market share percentage and Apple is going to be stuck in last place, as usual. Consumers are mainly interested in free or cheap content and Apple doesn’t believe in that type of thinking.

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