Published on: March 25, 2019
The New York Times
reports on the pitched battle that is about to break out between Apple and Netflix, as there two giant companies face off over content as they battle for viewer attention.
Today, the Times
points out, Apple is expected to unveil “its most ambitious media project yet - a news and entertainment bundle that is likely to offer access to magazines, newspapers, music and, perhaps most intriguingly, original shows and films. And when a tech giant like Apple jumps into entertainment, it’s going to create waves.”
The story notes that the amount Apple is committed to spending “on new material is nowhere near the $10 billion Netflix will plow into content this year, but Apple has something Netflix does not: more than a billion devices all over the world, which amounts to an infrastructure. That beats out the 139 million people worldwide who have subscribed to Netflix. If Apple is suddenly able to fill the screens of those devices with its own content, as well as programming from other companies it has struck deals with, it will turn itself into a beast sure to put a scare into Netflix.”
Apple is said to have committed $1 billion to its content ambitions, with that money going to some first-class talent - Steven Spielberg, JJ Abrams, Reese Witherspoon, Jennifer Aniston, Steve Carell and M. Night Shyamalan are among the names toi be mentioned at today’s unveiling.
The Wall Street Journal
offers this assessment of Apple’s ambitions: it is “to become an alternative to cable, combining original series with shows from other networks to create a new entertainment service that can reach more than 100 markets world-wide. It is the tech giant’s latest attempt to reinvent television, something it has tried to do for about a decade with limited success.”
And why? At least in part because it has to - iPhone sales, long a cash cow for Apple, are “sputtering,” and if hardware can’t generate growth, then software is the next best bet.
In the past, the two got along, and one could even sign up for and get content from Netflix on Apple devices, with Apple getting its standard cut of such transactions. But these days, while you can still watch Netflix on an iPad or iPhone, transactions are made on an external site, which means Apple doesn’t get to dip its beak. And, the Times
writes, “Netflix has decided to opt out of the Apple bundle, which will upsell subscriptions to HBO and CBS in addition to its original programming. Netflix’s absence from the new platform says a lot about the state of play in the highly competitive streaming industry: a fight is brewing over how content is distributed.”
(FYI…the New York Times
and Washington Post
reportedly also have decided not to be part of the bundle, apparently because they were not happy with the financial terms. The Wall Street Journal
, however, is said to have opted in.)
Netflix CEO Reed Hastings says that it is all about having some control over the service: “We want to have people watch our service — or our content on our service. And so we’ve chosen not to integrate into their service, because we prefer to have our customers watch our content in our service.”
explains it this way: “Netflix is a service, or a pipe, that would sit on another service, or pipe, if it agreed to be included in the Apple bundle. And if it had joined forces with Apple, Netflix also would have received little to no data about who is subscribing or watching its stuff. Further muddying the company’s identity, from the Netflix point of view, would be the fact that Apple users who spooled up ‘Stranger Things’ or ‘Orange Is the New Black’ may not be aware that they’re watching a Netflix show. Retaining the brand is as important as owning the data … The companies are battling for credit card numbers, email addresses and direct access to consumers.”