How Will Apple Distribute Its Original Content?

Dave Zatz —  March 29, 2018

As Apple’s original video production costs reportedly balloon past a billion and given recent music video app consolidation, I wonder what sort of distribution methods the company will employ when content begins arriving in 2019. Will these shows be accessed via an Apple Music subscription (as Carpool Karaoke is) similar to Google Play Music with YouTube Red and to better take on Spotify, sold independently via iTunes, or packaged within an entirely new video streaming offering? The latter strikes me as unlikely – for comparison, Netflix had millions of customers before venturing into original content (and marketing still remains a challenge). Might they employ a multifaceted approach that also includes syndication to a Hulu or leverage existing partner Disney, with its own upcoming streaming service? And then there’s the episodic question – all at once like Netflix or a weekly trickle like CBS All Access and Hulu?

7 responses to How Will Apple Distribute Its Original Content?

  1. If they only offer them via Apple devices they have a problem…

  2. “If they only offer them via Apple devices they have a problem…”

    Yeah, platform availability is the real question here. Given that Apple Music is available on Android, I expect them to replicate that here. But I wonder if they have a notion to try to reinvigorate the Apple TV business by restricting the lean-back platform, at least at first…

  3. As I posted on another site recently, it’s possible (though I wouldn’t necessarily say it’s probable) that Apple decides to offer their original video content for free exclusively on recent model Apple devices: Apple TVs, iPhones and iPads. Apple has historically seen software and services as second-fiddle business lines, with fat-margin hardware being the star of the show. As Android phones continue to improve, and Roku and Amazon dominate TV streaming devices (thanks largely to their lower prices and ad-supported UIs), I could see Apple trying to differentiate their hardware with free bonus content that creates buzz and adds to the brand halo.

    Apple has averaged annual net profits of nearly $50 billion over the past three years. They could easily afford to plow $1 billion of that each year back into original content to attract and retain buyers of their hardware. (Another data point: in 2015, the last year they reported their total advertising budget, it was $1.8 billion.)

    Looks like Apple may be on track to produce a slate of original content that rivals the original line-ups of HBO, Showtime, Starz and Amazon Prime in terms of quantity and quality. But without also having a decent library of non-originals content (movies, past seasons of series that debuted elsewhere, music and comedy specials, sports, etc.) — as well as a broad distribution strategy supporting all hardware platforms, and maybe even add-on partnerships with the likes of Hulu, Amazon, etc. — it’s hard to see “Apple Video” really succeeding as a standalone paid subscription service.

  4. “Apple has historically seen software and services as second-fiddle business lines, with fat-margin hardware being the star of the show.”

    True. But they’ve been making a determined effort in the past few years to increase service revenues and profits.

  5. HarryKerryJr. April 3, 2018 at 3:26 am

    IMHO, Apple is a one-trick pony. It has been and still is all about the hardware, specifically the PHONES. This is the same compnay that could not wrap their billion dollar, highest profit brain around the TV biz or the virtual MVPD biz when they were seriously considering it. They were confounded and, to really illustrate how they don’t understand a lot of other business, they took the attitude that the content owners would be beating a path to ink deals with Apple, just because they are Apple and have conned entire generations with their “brand.” when Apple let known they are seeking to enter the entertainment biz. WRONG! “Content is King!” and it is the content owners who sit back and wait for Apple to beat down the gates of the major studios. Studios will not make deals with Apple; Apple has to accept that Apple will have to make deals with content owners and bend over, not the other way ’round.

    I believe all the virtual MVPD’s are operating at a LOSS with payout and profits years away, just like it was with MSO’s and later satellite. That is a business model utterly foreign to Apple. They make money NOW, TODAY, and TONS of it. Even Amazon still does not post a profit (only one quarter during the last recession). Apple’s mountain of money made has to be admired, but here is the problem: Android is far away the most used mobile OS; a generation of gullible kids is growing up to find needing an Apple to show how “cool” they are and pay through the nose for it is becoming irritating when compared to Android. The number of “FORMER” Apple fan boys is growing (it seems a new video everyweek on YouTube of people having invested TONS in the Apple universe who are now “DONE” with Apple), who also cite “lack of innovation” at Apple the last few years, and more reasons, but the point is this: Apple is not going out of business tomorrow, but could be out of business within 5 years if they don’t get into ANOTHER business. They will die right along other former KINGS like RIM (Blackberry–weren’t they the huge monster in thier day?); increasingly irrelevant Microsoft, and the list goes on for other companies who could not adapt or adapted TOO LATE only to have a huge come-down to death or irrelevance. In other words thier core suckers–I mean customers–are growing up and CHANGING with shifting priorities besides sleeping overnight to be the first to get a stupid phone and now have to consider a famlily budget and WIFE in what phone they will get and find that even the Moto G line is SHOCKINGLY sufficient to operate as smartphone for like 1/7th the price of the last $900 they spent on their COOL Apple phone they so proudly displayed to all their loser friends–“That’s were I thought it was at back then? OMG, I was such a idiotic kid back then.” Today with how good Android phones are and how superior and OPEN music and TV is with other services, Apple is selling its BRAND more than it ever has, and the brand is starting to tarnish–in the view of CURRENT APPLE FANS, no less.

    The future of Apple is the most interesting case of all companies because they are supremely successful, and yet, as of today, a headed for a huge fall and earth shattering crash unlike any predecessors. IMHO, with all the money Apple has today, what it really needs to do, or more precisely what Tim Cook needs to do is admith to himself that he is out of his depth outside the phone branding business and hire the best individual to head the Apple business of entertainment content and services and spend the money to make it work and then Apple might have a good chance being around past 2023.

  6. First rule of trying to guess what Apple will do..
    1. Be prepared to be wrong
    2. Go back to rule 1

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