Apple may be looking to spend some of its $200 billion cash pile on original programming to compete with Amazon and Netflix. Jordan Golson explains.
Apple is quietly reaching out to Hollywood studio executives about funding and developing original content, much like Netflix and Amazon have done in recent years, according to a recent report from Variety.
The report follows Apple's biggest foray yet into content with Beats 1 earlier this year, a 24-hour radio station that launched at the end of June. Beats 1 saw Apple hiring a number of prominent DJs, including Zane Lowe, who had worked at the BBC for a decade.
Apple has been working on an internet-streaming subscription television service over the past several years. However, the company is said to have pushed the service back to 2016 because of difficulties finalizing negotiations with content providers, largely over the monthly charge for the service.
Getting into original content would see Apple competing with Amazon, Netflix, and other companies in the burgeoning video market. Netflix has seen significant success with original video content like House of Cards and Orange is the New Black, while Amazon recently paid a quarter-billion dollars for three seasons of car shows from the former Top Gear crew of Jeremy Clarkson, James May, and Richard Hammond.
That last show is particularly interesting, as Variety claims Apple actually made an ambitious bid to secure the trio to anchor its content play.
Apple's massive cash supply means it could easily spend hundreds of millions or billions of dollars on exclusive content without breaking a sweat. Like Apple Music, Beats 1, and the App Store, exclusive video content could potentially increase lock-in—especially if it's offered free, like Beats 1 is.
More likely, Apple might simply sell the content exclusively on the iTunes Store a la carte, like the rest of the content there. Or it might lean towards a Netflix-type model (like it does with Apple Music) and offer a large amount of video content from the iTunes Store for a monthly subscription fee.
With Apple Music, Beats 1, and the upcoming television subscription service, Apple is clearly looking to expand its content offerings significantly to add value for its customers—though Apple Music will be available on Android, like iTunes was with Windows a decade ago, in an attempt to show users on competing platforms how wonderful the Apple ecosystem is.
Next week, Apple is expected to unveil a new version of its Apple TV set-top box. Priced at $150 (USD), the box should include a new App Store and universal search feature that will allow users to search every content channel on the box for a movie or TV show, instead of needing to search each one individually.
Would exclusive video content make you more likely to buy an Apple product? What do you think about its plan to compete with Netflix and Amazon? Let us know your thoughts in the comments below.