Apple finally preparing to take on Netflix

“Over the last few years, Netflix has produced some of the most enviable results in the tech world,” Danny Vena writes for The Motley Fool. “The streaming pioneer has more than doubled both its revenue and member count since the end of 2014, with revenue topping $3.28 billion and subscribers exceeding 117 million.”

“Several recent moves by Apple, however, show that it may be ready to enter the streaming wars in earnest,” Vena writes. “Apple has signed noted creator M. Night Shyamalan, who will produce a 10-episode psychological thriller for the iPhone maker… This is only the latest project ordered by Apple. Late last year, the company inked a deal with Hollywood bigwig Steven Spielberg to revive his renowned ’80’s television hit Amazing Stories.”

“These recent deals suggest that Apple may finally be getting serious about its programming. It’s reportedly planning to spend $1 billion on content this year as it enters the streaming fray,” Vena writes. “By hiring some top-shelf Hollywood names, Apple has taken some important first steps. Your move, Netflix.”

Read more in the full article here.

MacDailyNews Take: If committed, Apple will do very well (and so will Apple TV sales, if Apple positions this and delivers this original content correctly), regardless of what competitors attempt:

Those who can wrap their heads around Apple’s massive cash mountain and the company’s unparalleled ability to generate cash can clearly see who the winner will be. The most talented producers, writers, directors, editors, actors, etc. are attracted to exactly what Apple has and makes in vast abundance: Cash. The king.

Like bears to honey, it’s happening already.MacDailyNews, January 3, 2018

M. Night Shyamalan to produce straight-to-series thriller for Apple – February 27, 2018
Apple hires Carol Trussell as Head Of Production for Worldwide Video Programming division – February 22, 2018
Apple’s TV tactics: Can Cupertino figure out the television formula? – January 16, 2018
Apple orders ‘See’ series, a futuristic drama from ‘Hunger Games’ director – January 10, 2018
Life after iTunes: Apple’s big media challenge – January 9, 2018
Apple developing new original drama ‘Are You Sleeping’ starring Octavia Spencer – January 3, 2018
Three more Amazon Studios executives move to Apple – December 26, 2017
Apple orders space drama series from ‘Battlestar Galactica’ producer Ronald D. Moore – December 15, 2017
Apple gives Jennifer Aniston-Reese Witherspoon series a 2-season order, confirms Spielberg’s ‘Amazing Stories’ reboot – November 9, 2017
Apple outbids Netflix for show starring Jennifer Aniston and Reese Witherspoon – November 8, 2017
Apple eyes iconic studio as base for Hollywood production push; vying with Netflix for high-profile Jennifer Aniston drama – September 1, 2017
The magic and misdirection of Apple’s streaming strategy – August 18, 2017
Apple wants to spend $1 billion on 10 original TV shows over the next year – August 16, 2017
Former WGN America president Matt Cherniss joins Apple in latest TV push – August 15, 2017
Rivals leaving Apple behind as Apple TV remains stuck in a test pattern – August 8, 2017
Apple’s so-called TV ‘strategy’ continues to be an embarrassing joke – June 30, 2017
Apple poaches Sony TV executives to lead major push into original content – June 16, 2017
Apple’s Eddy Cue alienated cable providers and networks with an assertive negotiating style – report – July 28, 2016


  1. I don’t think MDN can sound ANY more biased towards Apple in their takes. It’s always about the cash Apple has..blah blah blah. Shut up or say something constructive. This comment will be removed like many others before it, because MDN is a bunch of p@ssies.

      1. This is a recipe for brainless polarization with neither side informed with credible information. The best way for Apple to counter misinformation would be to tell the whole story, backed by objective testing. Instead Apple goes years between product updates, leaving rumors to grow. It also means that inbetween slow Apple updates, the competition now always catches up. Apple should not rely on unpaid fanboy sites to counterbalance what you or Apple perceive as biased against Apple. According to the MDN narrative, people who don’t always brainlessly choose Apple are uninformed idiots. So how do these supposed anti Apple media outlets stay in business? By deluging the reader under the same pile of ads that MDN does?

        If you can’t convince a person of technical superiority based on clear unbiased facts, then you had better question why you’re acting as an unpaid cheerleader for a corporation that is too big to care about attention to details and end user experience. Apple isn’t the scrappy underdog anymore. It is the very Big Brother/ lazy gorilla that Apple enthusiasts used to find objectionable.

        I recommend you balance your MDN biased propaganda with several other non-brand affiliated tech sites. Most are very accurate in their assessments.

    1. they generally include a nugget of truth, even if they are rather heavily biased towards Apple.

      As far as the money story goes, who can really argue with it? Apple’s resources enable it to go after the best talent and ideas and develop many concepts in order to select a handful of great ones. So, the money does matter.

      Distribution and availability is another big key. If Apple limits itself to the Apple ecosystem of AppleTV and such, then it will significantly limit its growth potential in this area.

      1. I’m thinking they’re talking about taking over ‘eyeballs’ in which case NetFlix may be a laughably high bar considering what each company currently has to offer.

  2. If Apple had a monthly TV service with a $10 monthly all you can watch cost, like Netflix, and a decent library with some original content, it would add lots of revenue. It is very odd that after all these years of Netflix Apple is still selling shows one-at-a-time like an old Blockbuster store. It is a remarkable failure of Apple to ignore such a critical market when the solution requires no more than doing what it did with iTunes, or what Netflix did 10 years ago.

    1. Anyone can set up a money-losing video streaming service. We see them everywhere: Netflix, Amazon, the networks, many major cable systems around the world, sports leagues, soon Disney, etc. They’re all spending huge amounts on content (it’s a golden age of television). But no one has yet found the ultimate business model.

      I don’t believe people will pay $10+ per month to each of these content providers. It’s simply too fractured. Some movies here, some there. Great new shows popping up everywhere — no time to watch them. Older shows scattered randomly. I can’t keep any of this straight in my head. None have a full range of content. And none of them have mastered content discovery yet.

      Apple has a huge opportunity, but it will take the right model rather than just more new shows.

      1. If Netflix is losing money then why is Netflix’s market cap almost worth as much as Disney’s market cap? Why does Netflix command a P/E of 217 if anyone can set up a money-losing streaming video service? Why is Netflix part of the almighty FANG group and valued by Wall Street far higher than Apple will ever be?

        Something is very wrong when it comes to company valuations. Netflix’s share price just keeps climbing higher and higher and everything Netflix does is infinitely praised by Wall Street for having unlimited subscriber growth. If Apple had a Netflix-like service I’m sure it would do just as well as Netflix and Apple can certainly afford to absorb any losses. Apple can just use a Netflix-type video streaming service to sell more Apple hardware to make its money back.

        I personally don’t see what’s so great about Netflix that Apple couldn’t duplicate. I personally prefer watching Amazon Prime Video because I’m a Prime subscriber and I mainly watch educational videos. All I know is Wall Street is endlessly praising Netflix for how many subscribers they have and mediocre profits don’t seem to matter. Greedy big investors seem to love Netflix although I don’t really see any huge moat around Netflix when there’s only a monthly subscriber fee. That’s hardly a solid lock-in for subscribers. Amazon’s yearly Prime subscriber fee has a much better lock-in than Netflix.

        I’ve been offered free Netflix trials a number of times and I’ve never once jumped at the opportunity. I think Netflix is OK but hardly to the excess that Wall Street believes it is. A P/E of 217?! C’mon, that’s a total BS valuation. Apple needs to take some air out of Netflix’s over-inflated balloon. I’m not talking about Apple clobbering Netflix. I’m just saying Apple should grab some of the easy pickings if streaming video is that great of a market to be in.

        1. You answered your own question: Netflix has a market cap almost as high as Disney’s because Netflix’s P/E ratio is a whopping 252. Despite making almost zero profits, investors are valuing the company at 252 times earnings. It’s grossly over-valued unless you think Netflix can continue to dominate, grow and grow their user-base, and then raise their rates enough to generate profits. The trick is that it seems lots of streaming services are getting good at commissioning great content (Amazon, perhaps Apple) and some great content companies are getting good at streaming (HBO, soon Disney).

          A P/E of 252 in such a competitive landscape seems quite foolish.

        2. “If Apple had a Netflix-like service I’m sure it would do just as well as Netflix and Apple can certainly afford to absorb any losses…”

          Apple *does* have a Netflix-like service, and it *is* doing as well as Netflix. But it’s not generating losses; it’s making more profits than Netflix. It’s called Apple Music.

          Apple hasn’t created its “Apple Music for video” yet. As you say, they’re not doing anything Apple couldn’t duplicate. Perhaps it will be a free-standing service, or perhaps it will be an evolution of Music. Hard to know. But when it comes, how long will it take to catch up? Impossible to say. But with Music they’re quietly picking users, and building a profitable business.

          1. Apple may have a more difficult time with video streaming if they are simply thinking it is enough to copy what they do with music. Netflix is not just creating and licensing content, and managing servers. They are considered on the cutting edge of video compression research. Video files these days with HD/4K streams are magnitudes larger than any audio file. Netflix constantly pumps money into improving the ‘video experience’ with limited resources on the user device end. Though Apple has money, IMO it is still going to be a hard battle.

            1. “Netflix is… considered on the cutting edge of video compression research.”

              Apple essentially invented digital video, and created a lot of the most advanced compression technology. I’m sure Netflix is innovating in this space, but they are not creating foundational computing technologies the way an Apple or a Google is.

            2. I didn’t necessarily say they worked alone at the cutting edge mind you. But there is no other company actually implementing and pushing the cutting edge technology at the scale NetFlix does and actually sharing their real-world experience with their partners. To properly compete with NetFlix I believe Apple will have to invest a lot more money into server space than they do now.

      2. Netflix is NOT a “money-losing video streaming service.” They had $4 billion in profit last year.

        Personally, I do not believe Apple is can compete with this. Apple counts on high-margin products.

      3. Netflix doesn’t “lose money”. Who are you referring to? Netflix has built an amazing market cap (shareholder wealth) much like Amazon, with a very high P/E but a business model that investors obviously think is good. Apple has failed to do this, with a P/E of about 18, versus 252 for Netflix. I am an Apple investor but I sure would like Apple to learn something from the Netflix and Amazon’s so it could get investors to reward it with a far higher P/E ratio.

        Apple can continue to do as it is and its investors can continue to be punished as Netflix and Amazon build the media and retailing platforms of the future. But you can then take satisfaction in lecturing them on their inadequate profits. But their shareholders can take solace in the fortunes they are accumulating.

        1. I don’t think you can take that lesson from this. What Netflix and Amazon are doing “right”, Apple is not necessarily doing “wrong”.

          Apple is outperforming on so many fronts (including from subscription revenue from streaming services). And perhaps that’s the issue. Investors don’t see the discrete wins, and don’t recognize the the strong positions Apple is building (well, some investors recognize this, ahem, Berkshire Hathaway).

          Why is Apple’s P/E so low? That’s the big question. It seems that investors believe Apple (P/E 18) is always just one product cycle away from ruin. Wh are others’ so large? I guess investors believe Amazon (P/E 250), Netflix (P/E 255), etc. can continue to grow by leaps and bounds, and then tune in a suitable profit margin as they go. I don’t believe there’s enough revenue to be had to justify these valuations. I think these are closer to speculative bubbles. Ride them on the way up if you can. Cross your fingers they one day justify their lofty valuations, or get out before the bubble bursts.

    2. Apple has had a streaming business for years, its called rentals for Movies. The difference is that Apple doesn’t have any original content (yet) to stream and yeah, its per title.

      TV shows are Season Pass $20-$40 or buy depending on whether its current or retired TV show On a retired show they give you a break on the first season ($10) and then assuming it has more seasons available, they cost you usually $30 each.

      In Comparison to Netflix, you pay your monthly fee, you can binge watch your TV shows, however Netflix usually does not have current TV shows, you have to wait for those, if they show up at all, Whereas iTunes probably has most new shows available for season pass.

      So unless Apple intends to become more like Netflix and actually change their pricing structure for Movies and shows, there is no comparison.

  3. Apple wants to make a profit. You know that lemonade story with little Steve and little Mike? Well, Netflix doesn’t care about profits. Same with Spotify.

    I am not so sure it’s that simple for Apple and its cash. In the end it’s the shareholders cash.

    1. I have no doubt that Apple intends it’s venture into original programme making to be profitable.

      People seem to be looking at the Netflix model, but there are other ways to make a profit from this sector. One way would be to make exciting and compelling series, initially keep it as an Apple exclusive for a short while and then sell it to other streaming services or TV channels. By doing that, there are opportunities to make money on a massive scale and in many cases to benefit from merchandising rights too.

      The calibre of the people that Apple has recruited so far points to them making top tier content, or to put it another way, if the content that they produce isn’t top tier, then there can be no excuses about the budget.

      This is not a guaranteed winning venture for Apple. There are any number of ways for a project to go wrong, such as casting an actor who suddenly becomes the centre of a scandal, or having a subject matter which unexpectedly becomes outmoded. You can look around the TV and movie industry to see any number of expensive flops or projects which have been released at an unfortunate time, but Apple has stacked the deck pretty well in it’s favour.

    2. If all Apple cares about is profit, then there in no point for MDN to exist. Everyone could just get their Apple news from the Wall Street Journal and their stock brokers. And predictably, we soon would speak of Apple in tones today reserved for our favorite cable TV operator.

      The reason Apple can’t compete with Netflix isn’t one thing, it’s everything. Apple’s iTunes is a messy combination of too many different things. Apple’s pricing for movies has always been high. Apple TV is also pricey but offers the user no exclusive content. The Apple TV customer not only has to pay additional subscriptions, he also has to manage apps and put up with a useless remote control. Other TVs and set top boxes are easier to use.

      Finally: Apple keeps trying to push Siri into everything. That is a losing strategy. You can accomplish more talking to your redbox vending machine, which actually delivers Blu Ray in full high definition without you having to pay for the super expensive ISP service, assuming you live where high speed internet is offered. Most rural areas have one realistic internet option for the home, which is satellite TV. you know how that works. When it’s storming outside and you want to huddle inside for family movie night, the satellite feed will drop out. Apple of course is oblivious to these real world issues.

    1. Just the other day I was discussing with a friend why Apple would want to become another Sony when television’s heyday seems to be waning and few people go out to movie theaters anymore. He contended that Apple is run by old rich people, so they don’t know what’s the next thing. They are slowly losing grip with their old and new audiences for all things non-iphone.

      It’s not like people don’t enjoy video. the millenials are even more into escapism than most generations. they simply cannot afford much top quality entertainment, live or telecast. They watch YouTube because it’s free. They use their parents netflix account, not their own. The millennial generation, at least before they have kids and a professional job, can’t even consider owning a nice stereo system or home theater. They rely on the phone for most of their audio and video because it’s what they can afford.

      A strategist would ask why Apple has not already delivered a kickass dedicated app where an iPhone could be plugged into a TV for high definition video and audio playback. The Apple TV isn’t needed at all, it just needs to be a nice long wire. If your internet is slow, a good video rental app could allow you to schedule your movie ahead and the phone could download it while you eat dinner.

      But no, Apple is instead trying to sell people a watch and a phone and a tablet and a laptop and an allinone Mac and a settop box and a talking speaker and headphones and subscrptions as well. Most of it doesn’t even work well together anymore. It’s ludicrous to support every tiny device niche when the reality is that few fanboys can afford it all, fewer still can get them all to work together seamlessly, and none of them are super user friendly for video consumption on a large wall mounted video screen. (The Mac Mini probably would win over any other Apple gear but it costs about ten times what an ethernet connected BluRay or Roku costs)

      So Apple will lose the millennial generation if they don’t get their act together. Pun intended. Apple doesn’t need to chase after Netflix. Apple needs to figure out how to manage the ecosystem it already has without going 5+ years between hardware updates or being totally destroyed in video playback software usability.

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