Special Briefing: Could Apple Beat Netflix at Its Own Game?
WHY YOU SHOULD CARE
With Apple’s new focus on creating original content, the streaming wars are truly underway.
By OZY Editors
This is an OZY Special Briefing, an extension of the Presidential Daily Brief. The Special Briefing tells you what you need to know about an important issue, individual or story that is making news. Each one serves up an interesting selection of facts, opinions, images and videos in order to catch you up and vault you ahead.
WHAT TO KNOW
What’s happening? Apple announced today that it’s launching Apple TV Plus in May, its biggest push ever into the streaming video market. While the computing pioneer was the most profitable American company of 2018, according to Fortune magazine, it’s lagged behind companies like Amazon in terms of original video content, and way behind relative upstarts like Netflix. With Apple jumping into this realm, along with a redesigned TV app that lets you watch cable and streaming services on any device ad free, it could mean a future in which industry leader Netflix sees its dominance decline.
Why does it matter? Amazon is currently the biggest threat to Netflix, the undisputed top dog of the streaming game, but today’s announcement puts Apple squarely in the running. Some wonder, though, whether the field is already too saturated given that consumers’ limited budgets cannot stretch to pay for endless streaming services. As a world-renowned brand, Apple has the means to distinguish itself, but a more complicated future may be coming for the TV industry as a whole.
HOW TO THINK ABOUT IT
A history of video. Apple’s film and programming ambitions started long before streaming services were popularized. Macintosh TV, which debuted in 1993 but never really took off, was a hybrid computer-television that could hook up to a VCR. Then came Apple TV, in 2007, although Steve Jobs often referred to it as a “hobby” project: It was a video and music streaming device, but it never really captured the market like Hulu or Netflix. While Apple’s developed further iterations, and even released original video programming, it hasn’t been able to replicate the success of iTunes as a streaming platform.
It’s showtime. Investing around $2 billion with today’s launch, Apple is hoping to challenge Netflix and Hulu with an extensive new slate of original content. That’ll include around two dozen series involving heavy hitters like Oprah Winfrey (who’ll be doing multiple projects and a digital book club), J.J. Abrams, Reese Witherspoon and Jennifer Aniston. And Apple isn’t the only one: Disney (which will own 60 percent of Hulu when its deal to buy Fox goes through) and Warner Media are both expected to launch new streaming services this year. Meanwhile, Google just announced the launch of Google Stadia, a streaming service for video games that will leverage its dominance in the cloud.
Cut that cord. While there has long been speculation that Netflix-loving millennials would abandon cable companies and kill the industry, it might not be something older generations can pin on the young. Instead, the death of cable might come from within that industry itself. Some cable providers are diving deeper into the more profitable broadband internet business. Cable One, for instance, has stopped trying to talk cable-cancellers out of their decision, choosing instead to try and sell them on its own streaming service. While Cable One’s user base pales compared to Comcast, its shares are up 136 percent despite its seeming abandonment of … well, cable.
Or maybe not. Some predict that because 194 million Americans get their internet from cable companies, streaming services will eventually be bundled into those deals the way channels are now. While the streaming era has seemed a ray of hope for those who don’t like depending on TV monopolies for their entertainment, those giants may well be coming back in a different form.
And one…or two…more things. Apple TV Plus wasn’t the only big announcement today. The company also announced the launch of its own virtual credit card, the Apple Card, and subscription-only news apps and gaming services.
WHAT TO READ
Jeffrey Katzenberg’s Vision for the Future of TV Is Snackable Movies, by Ashley Rodriguez on Quartz
“Quibi is thinking about content for the platform as feature-length films, two hours or longer, that unfold in eight-or-so-minute chapters, which is roughly the length of act breaks between commercials on traditional TV shows like This Is Us.”
With the iPhone Sputtering, Apple Bets Its Future on TV and News, by Tripp Mickle in the Wall Street Journal
“It is the tech giant’s latest attempt to reinvent television, something it has tried to do for about a decade with limited success.”
WHAT TO WATCH
History of the Apple TV
“Apple has and continues to experiment in this industry despite never having released a traditional television.”
Watch on Apple Insider on YouTube:
Apple Event ‘It’s Show Time’ LIVE With Brian Tong
“To be a Netflix killer, you arguably have to have at least five must-see TV shows. Not one, not two, at least five.”
Watch on Brian Tong on YouTube:
WHAT TO SAY AT THE WATERCOOLER
Who will buy? The rise of streaming services has also disrupted TV advertising. In the U.K., according to media consultancy Ebiquity, there’ll be a forecasted decline of between 15 and 20 percent in TV ad viewing by adults by 2022, including a 30 percent decline for stay-at-home moms and a 45 percent drop for 16-34-year-olds. The U.S. could also see a drop: MoffettNathanson Research predicted last year that American advertising would see a 4 percent decline in 2019. But this is offset by soaring digital advertising, which is predicted to rise by 18 percent this year.
- OZY Editors, OZY AuthorContact OZY Editors