Apple is making a multi-billion dollar mistake or something

“The world has become clogged with quality content. Netflix makes so much of it that it’s hard to keep up, and Amazon throws in a bunch of highly regarded shows as a perk for people who pay for free two-day shipping,” Daniel B. Kline writes for The Motley Fool. “Add in HBO, the slew of top-tier programs offered on basic cable, and even the occasional quality program offered by the broadcast networks, and there’s simply too much for most people to watch.”

“Apple, however, has chosen to ignore the crowded marketplace. It wants to plunge into the original video market, with plans to spend $4.2 billion by 2022 according to Variety,” Kline writes. “The company has not made it entirely clear what it’s going to do with billions of dollars worth of original content.”

MacDailyNews Take: But, I’m going to puke up a few buckets worth of speculative blather anyway.

“There are rumors that the company will start a streaming service to take on Netflix, Amazon, Disney+, HBO, and the rest, but that actually seems not all that likely,” Kline writes. “Instead, it’s much more plausible that Apple intends to make video part of its streaming music service. The shows would be a sort of bonus for members, and a way to differentiate Apple Music from its near-identical rivals.”

MacDailyNews Take: Not according to CNBC, which reported in October that owners of Apple devices will find the content in the “TV” app and it will be free to Apple device owners along with subscription “channels,” which will allow customers to sign up for HBO, etc.

Try to keep up, Daniel.

Kline writes, “Both ideas are sort of terrible.”

MacDailyNews Take: So much for keeping up.

“Apple — even with its huge customer base — lacks the intellectual property to build its own streaming service,” Kline writes. “It could certainly create a few good shows, but that would not be enough to get customers to sign up when so many rivals offer so much more.”

MacDailyNews Take: Again, “free to Apple device owners.” And, “Apple lacks the intellectual property to build its own streaming service?” Whaaa?

Kline writes, “Video as a bonus for Apple Music subscribers also seems like a waste.”

MacDailyNews Take: Again, “in the TV app,” not Apple Music because – duh – it’s not music.

“It’s easy to see why Apple wants this: Hit shows bring a level of prestige that’s hard to attain otherwise. The gap between that prestige and any business metrics, however, is too big a gulf to bridge. Premium content is expensive, and most of it will get a niche audience at best,” Kline writes. “Consumers aren’t going to broadly add or keep a service because it has a couple of hit shows.”

“The potential rewards make creating premium video a bad bet for Apple,” Kline writes. “This is a vanity project that will deliver negligible benefits at best and pour money into an expensive drain at worst.”

Read more in the full article here.

MacDailyNews Take: Kline’s pronouncements are David Goldstein-esque:

This is a vanity project that will deliver negligible benefits at best and pour money into an expensive drain at worst. – Daniel B. Kline, December 11, 2018

I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake.David Goldstein, Channel Marketing Corp. President, commenting on Apple’s plan to open retail locations, May 21, 2001

iCal’ed for future use.

SEE ALSO:
Apple plans to launch TV streaming service first in the U.S., then swiftly expand globally with free original content – October 23, 2018
Gene Munster: A free content strategy is the right approach for Apple – October 16, 2018
Apple plans to give away original content for free to device owners as part of new digital TV strategy – October 10, 2018

8 Comments

  1. Marketing and PR value of one hit show for the Apple brand will outweigh the cost associated with it… let alone a few great showes and a comprehensive line up of entertainment services.

    But i pray they Dont Go the Convolution Master Eddie’s way and have a dedicated channel of distribution rather than than mix it up with Apple Music.. ( couple of Apple produced showes were already distributed through Apple Music.. which i think is absolutely stupid, but the excuse there can be that they were music related..but still ..)

    So lets pray they dont take the same stupid approach with their upcoming lineup. 🤞🤞

    1. MDN seems to ignore completely that distributing “tv shows” through Apple Music is EXACTLY what Apple has done to date. Giving Apple the benefit of the doubt is one thing (which is no longer deserved) but pretending they wouldn’t do the foolish things they’ve already done is downright Orwellian.

      I think the “duh” is on the wrong foot.

  2. Based on what shows have been announced already, For my personal tastes of viewing, I see virtually nothing the Apple has announced that would make me give it the time of day..

    Whether or not there video venture is DOA or not, we’ll find out in the next couple years, if and when we actually see anything roll out, other than all these announcements, I’ve seen nothing that production on any of this is in progress, and maybe it is, if its not, it will be late 2019 or 2020 before you see anything appear in the TV App..

  3. Apple has a video streaming on demand platform already, it’s called “iTunes”. Apple already has my credit card, and since I’m not a customer of Netflix, they do not. iTunes actually works pretty well: you search for what you want, put your password in and WHAM! it’s on your iPhone, Mac or iPad and a day or two later the bill shows up on you credit card. Imagine that.

    It seems to me that Apple has about 600 million credit cards on file. I doubt ANY streaming service has that many. PS: this way of thinking means that they’ll be just two really big winners in this “streaming battle” : Apple and Amazon. Why does one of those companies have the highest market value and the other is owned by the richest person in the world? Oops, I just told you. 🙂

    1. Years ago, Apple bulls were bragging about those 600 million credit cards on file and yet those credit cards haven’t done anything for Apple’s overall value. Apple should have had video subscription content like Amazon and Netflix has, a long time ago. Apple has basically squandered all those credit cards and now Apple is worth less than both Amazon and Microsoft and is likely going to stay that way. Apple never really used all those credit cards to their advantage. It was like Apple sitting on a gold mine and not bothering to dig for gold.

      All those credit cards certainly aren’t doing anything much for Apple when it comes to AppleMusic as there are only about 50 million of those credit cards being used by subscribers. I think Apple will always be inferior to Amazon because Jeff Bezos is hungry and smart. Tim Cook is far too interested in changing the world in ways where it won’t increase Apple’s value.

      1. ANY company in the world (including Apple) would love to have 50 million people giving them money EVERY month. That’s a big number.*

        It’s a VERY big number for a “side” business like Music is to Apple. 🙂

        In addition, I would assume that only Netflix, Amazon Prime, and Spotify have numbers that exceed this as far as PAYING customers.

        I’m not an Apple Music subscription customer but with the addition of movies and television, I might be. You see only the 50 million, I see the difference between 600 and 50 million as a 550 million person opportunity for Apple.

        *Warren Buffet got rich by attracting lots and lots of insurance customers paying premiums every month and investing those premiums every month in high yielding stocks (picked correctly) and well performing companies instead of lower yielding bonds and real estate.

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