Apple TV+’s huge advantage: The deepest pockets in Hollywood

Apple TV+ has a huge advantage: Apple has, by far, the deepest pockets in Hollywood. And Loup Funds estimates that in early 2021, streaming subscriptions made up 95% of global entertainment revenue market share (excluding digital downloads).

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Rebecca Mulberg and Gene Munster for Loup Funds:

Apart from Amazon Prime sitting on more than 20K titles from MGM’s pre-1986 catalogue, we think it’s Apple that is best positioned to grow share from its fractional 2% streaming revenue share today (30m paying subs). Funded by nearly $100B+ in annual operating income, Apple’s content spend is without bounds. This gives them an advantage in Hollywood development deals and attracting top tier talent. On the company’s March 2022 earnings, Tim Cook said that Apple doesn’t make “purely financial decisions” on its content acquisition—which underscores the company’s commitment to developing quality content. In terms of UI, Apple may also be the only streaming service that can run ad-free in the long term. Currently, Prime Video and Peacock have part of their library supported by ads, while HBO, Disney+, and Netflix are exploring ad-based models. The bottom line: it seems inevitable that most streaming services will show ads in the future, which can become a selling point for Apple TV+.

MacDailyNews Take: Uh:

Apple’s content spend supports its growing list of talent, including a recent deal with Tom Hanks’ production company, Playtone; Natalie Portman’s production company, MountainA; Leonardo DiCaprio’s production company, Appian Way; and Idris Elba’s production company, Green Door Pictures. Not to mention contracts with Oprah Winfrey, Alfonso Cuarón, Ridley Scott, A24, and Sesame Workshop. Separately, Apple continues to develop its sports broadcasting capabilities, with its MLB Friday Night Baseball deal and a 10-year deal with MLS. We believe that NFL and Formula 1 races will follow within the next two years.

The one downside of Apple TV+: While the quality of its content is high, its library isn’t filled enough to compete with the likes of Netflix, Hulu and HBOMax. In the end, we believe quality will win over quantity.

MacDailyNews Take: Loup estimates that Apple TV+ currently has 6% of the U.S. streaming service market with some 40 million paid subscribers as of calendar Q222.

As for deep pockets:

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

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4 Comments

  1. “Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying ‘we’ve done something wonderful’ – that’s what matters to me.” – Steve Jobs

    Premium content, content… content.

    “Ad-supported content”.

    Cable TV was first introduced as an ad-free alternative to airwave TV. Then, slowly, they started introducing commercials, to ‘support content producers’ and ‘lower cable bills’. They lied.

    It was all a money grab using incrementalism to get subscribers to accept it, and now look at the content of cable tv and the onerous way cable companies treat ‘customers’. People are turning to streaming for a reason. Crappy commercials and crap content.

    “This propaganda brought to you by PhiZZerrr.” Yeah, no thanks.

    1. Well said. The guy above gets it.

      Then we get to the cynical BS’ers on this site. Those two are the dumbest pockets of MDN.

      If you ever want to know what the correct course of action is, look for their comments, read carefully what they have to say, internalise it deeply, and then do the opposite.

  2. Sorry if this sounds repetitive – I want to hear Apple explain why it’s getting into the ad business, and how it’s not just a sleazy as Google. I want someone to explain morally where they’re coming from.

    Tell me you’re not tracking, but please pitch it to consumers. We’re seeing ads pop up left right and center.

    Would I like a business model where paid users see no ads? Hell yes. But that doesn’t work – advertisers want the wealthy customer. This is the problem with getting into the ad business in the first place – it’s hard to pitch to customers. Google can do it because everything they do is free… Apple is charging and posting ads, a fucking lose lose for consumers.

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