Despite bonafide hits such as comedy series “Ted Lasso,” drama series “The Morning Show,” and the miniseries “Defending Jacob,” Apple is seen by some Wall Street analysts as lacking multiple, regular breakout hits, leading some to argue for a Hollywood studio acquisition.
Georg Szalai for The Hollywood Reporter:
“Apple has made a major strategic mistake not buying a Hollywood studio while Amazon, Disney, Netflix and others run away with content,” Wedbush analyst Dan Ives says. “Content is king, and Apple built a mansion with hardly any furniture in it. MGM was a no-brainer acquisition for Apple, and they missed a huge opportunity.”
Hal Vogel, CEO of Vogel Capital Management, suggests that Cook is “afraid of shareholder blowback if he goes Hollywood in a big way.”
MacDailyNews Take: Or he’s afraid to spend nearly 3X as much money as Apple’s biggest acquisition to date ($3B for Beats) with an uncertain return on the investment.
AT&T’s $43 billion deal to merge WarnerMedia with Discovery and Amazon’s MGM buy underscores the “intensifying streaming wars as a potential catalyst for the next wave of industry consolidation, with some of the big tech companies increasingly seen as potential acquirers,” CFRA Research analyst Tuna Amobi says.
Apple could choose to ramp up its Hollywood division with a mega buy of a studio the size of, say, Lionsgate, which gets mentioned as a possible takeover target given its relative lack of scale — Lionsgate’s market cap is $3.8 billion, while Apple’s is $2.1 trillion — as well as its 17,000-title library and film and TV franchises like “Hunger Games,” “Twilight” and its Starz drama “Power.”
MacDailyNews Take: Apple is looking for fresh quality content for Apple TV+. They can do that by contracting with quality producers, not studios, as they have been doing for years now.
For just a few examples:
• Apple TV+ signs Natalie Portman and Sophie Mas to multi-year first-look deal – March 17, 2021
• Apple inks multi-year, first look feature film deal with Ron Howard and Brian Grazer’s Imagine Entertainment – March 11, 2021
• Apple TV+ signs multi-year first-look deal with Martin Scorsese – August 11, 2020
• Ridley Scott inks multi-year Apple TV+ overall deal – May 13, 2020
• Apple inks deal with movie studio A24 to make feature-length films – November 15, 2018
This strategy does not preclude taking a concurrent track by making the right deal at the right price for a Hollywood studio in the future.