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Apple Investing in Original Content

Posted on August 18, 2017 by admin Posted in Business Leave a comment

What it is: Apple plans to spend $1 billion dollars for original content.

What makes the Macintosh special is its software. If you want a computer that’s easy to use, you want macOS, which means you have to buy a Macintosh. If you buy a different computer from Dell or Hewlett-Packard, you’ll most likely get Windows or Linux, neither of which are as easy to use as macOS for novices. As a result, macOS is what helps drive sales of the Macintosh.

Now look at the situation with Apple TV. Apple TV offers the exact same movies that Hulu and Netflix offer, but both Hulu and Netflix offer more TV shows because they offer original content such as shows like “Game of Thrones” or “The Handmaid’s Tale.” Because there’s nothing unique about Apple TV, there’s really no reason to buy and use an Apple TV.

That’s why Apple plans to spend up to $1 billion dollars investing in original programming. They have to and silly reality TV show ripoffs like “Planet of the Apps”simply isn’t going to bed attractive enough for people to want. Apple needs its own must-see TV show like “Game of Thrones.” Hopefully Apple won’t create a clone of “Game of Thrones” but creates something unique that’s just as popular.

As Netflix and Hulu realized years ago, you need original content to attract people. Otherwise you risk being nothing more than a commodity service that can only thrive by cutting prices and profits. Witness the cutthroat competition among PC vendors to see how poorly that turns out for them. When you sell the exact same thing as everyone else, there’s no reason for anyone to by from you except for the price.

Most likely, much of Apple’s $1 billion dollar investment will go down the drain creating original shows that nobody cares about. That’s typical of snow business in general. Every year, the TV networks create new shows and every year they cancel more than half of them before the season even ends. Creating original content isn’t easy because it depends partly on the public and partly on the writing and acting.

Still, Apple must either let Apple TV languish or offer original content. They have no choice. One day, Apple will stumble upon a hit, but just as every television network has gone through cycles of up and down, so will Apple, Netflix, and Hulu go through periods where they offer nothing but garbage and other times when they offer the most popular shows around. That’s just the nature of original TV content.

Watch to see what happens with Apple TV in the future. It may not be much right now, but it could continue to languish in mediocrity or it could excel one day. We’ll find out eventually after Apple spends $1 billion dollars to stumble their way to success.

The Fragmented Future of Streaming TV

Posted on August 9, 2017 by admin Posted in Business Leave a comment

What it is: Disney announced that they’ll be pulling all Disney and Pixar movies from Netflix to start their own streaming TV service.

At one time, people only had three choices of TV networks to watch: ABC, CBS, and NBC. Then cable TV arrived and offered niche and unique channels like The Food Network and ESPN. Suddenly people had a huge variety of choices by just paying for a single cable TV subscription.

Then cable TV services started offering various bundles that never seemed to be what anyone wanted. This forced people to pay more, which actually resulted in many people cutting the cord altogether and dumping their cable TV subscription.

Then people discovered streaming services like Hulu and Netflix. For one low price, people could view most of the content they wanted. The problem Hulu and Netflix discovered was that by offering the same TV shows and movies as their rivals, there was no difference between streaming services. That’s why Hulu and Netflix (among others) started offering their own original content, much like how the big three TV networks (CBS, ABC, and NBC) used to differentiate themselves from their rivals on TV.

Now Disney has announced that they’re pulling their movies (and Pixar’s movies) off Netflix and starting their own streaming service. Disney rallied that they create original content and they should offer it to others to make even more money. Suddenly the content creators are becoming the streaming services and the streaming services are becoming content creators.

This means if you want to watch everything you like, you’ll have to start paying for multiple subscriptions. Nobody wants to give one company a monopoly over access like Apple once had with iTunes controlling the music industry. That means the future of Apple TV will rely on original content. Given Apple’s recent tentative forays into original content with reality TV shows like “Planet of the Apps” and “Carpool Karaoke,” this does not bode well for attracting more subscribers to Apple TV.

Disney is in a strong position to benefit from its own streaming service because it has a long history of creating content. Netflix is gaining a reputation for creating excellent original content as well. What this likely means is that every studio will try to start their own streaming service. Sony can stream content to Playstation users as a way to differentiate the Playstation from Microsoft’s Xbox. This could put control of the streaming TV business back in the hands of content creators like Disney, Paramount, and 21st Century Fox due to their long history of creating content. If everyone puts their original content to host it exclusively, this will greatly fragment the market.

The real key might be consolidation and niche marketing. Disney can dominate children’s programming, which makes their own streaming service attractive to programs like The Muppets and Sesame Street, not to mention cartoons like Bugs Bunny or Pokemon. Other services can offer more raunchy cartoons like The Simpsons while others might specialize in something else entirely. For those companies without a strong niche like Paramount Studios, they may need to work with others.

This creates a new opportunity for a company like Apple. Apple already has strong ties to Disney and Pixar, so could they make a deal or could Apple even acquire Disney altogether? Disney’s content is extremely valuable (think “Frozen” and “Cars” along with Marvel Studios’ entire content of “Thor” and “Iron Man”). Apple could monopolize the family friendly market by simply acquiring Disney and offering Disney’s exclusive content through Apple TV. That would be a faster way to offer exclusive content than to keep offering weak shows like “Planet of the Apps.”

The rumors have been swirling for years that Apple and Disney should merge, and with Apple TV flailing, this could be one way to save it. The only question is whether Apple TV and streaming services are big enough to justify an acquisition of Disney.

Short Attention Span TV?

Posted on July 20, 2017 by admin Posted in Business Leave a comment

What it is: Dreamworks co-founder, Jeffrey Katzenberg, is shopping around a New TV concept.

Apple TV is nothing to get excited about. It works, but it’s not that exciting to use and doesn’t offer anything that other streaming TV boxes offer. Apple TV isn’t bad, but there’s no reason to get it over rival products. To change this perception, Apple has been rumored to be looking at original content.

Netflix and Hulu created their own original content when they realized they were just selling the same movies and TV shows as everyone else. By offering original content, Netflix and Hulu can differentiate themselves from their rivals and give people a reason to subscribe. That’s what Apple needs to do as well.

Apple’s first attempt at original content, “Planet of the Apps,” is a dull, copycat reality show that few people will want to watch. It’s a start, but a poor one. That’s what makes Jeffrey Katzenberg’s “New TV” concept appealing. Because so many people watch video on smartphones and tablets, New TV is designed to offer original content not longer than 10 minutes in length. This is perfect for the mobile video watching crowd although it’s not exactly ideal for Apple TV since that sits in a person’s home.

Still, “New TV” offers one way to think about content. Few people are going to watch two hour movies on a smartphone or tablet, but they will watch a short story of ten minutes or less. Traditional movies last two hours and traditional TV shows last an hour or half an hour. New TV plans to offer original content that more closely fits the lifestyle of mobile computer users.

Offering such short, original content could be an interesting way to attract subscribers. Jeffrey Katzenberg is reportedly shopping this New TV concept to Apple, Amazon, Verizon, and other major companies. Apple could use all the help they can get in getting their original content strategy going, and New TV could be a start.

The world has a much shorter attention span than before. Just watch old TV commercials that focused on one person talking about thirty seconds compared to today’s commercials that constantly flash new images every second or so.

Movies and TV shows aren’t dead, but they’re not optimized for the mobile crowd. New TV could be an interesting concept. Think short and you may have a new world of video entertainment first made popular by YouTube. Original content is necessary, but the length of time for it could mean the difference between success and failure.

Planet of the Apps is Awful

Posted on July 8, 2017 by admin Posted in Business Leave a comment

What it is: “Planet of the Apps” is a reality TV show created by Apple as part of their foray into original content.

Netflix and Hulu learned a long time ago that just showing movies and TV shows turned them into nothing more than an online version of a video rental store. Both companies realized that instead of trying to sell the same content that rivals could sell just as well, they needed to create original content. that’s why Netflix and Hulu have created their own movies and TV shows.

With Apple TV, Apple has positioned themselves as little more than another service offering the same movies and TV shows that everyone else can offer. That’s why Apple is trying to move into original content as well and their first offering is “Planet of the Apps.” Besides being an awful reality TV show, there are plenty of other problems with “Planet of the Apps.”

First, it’s derivative. It’s like “Shark Tank” except instead of people pitching ideas for businesses, they’re pitching ideas for apps. Second, it’s a reality TV show and that by itself makes it cheap to produce but also likely to rely on fake conflict and exaggerated emotions to make the show visually interesting.

Essentially, “Planet of the Apps” violates every principle that has made Apple successful.

When Apple introduced the iPod, they didn’t just introduce another hardware MP3 player, but one that was easier to use and that also included iTunes to make it easy to organize your favorite music. The iPod defined portable music players.

When Apple introduced the iPhone, they didn’t just introduce another smartphone, but one with the revolutionary touch screen interface. Later they introduced the App Store as a secure way to increase the capabilities of your iPhone.

When Apple introduced the iPad, they didn’t just offer another netbook. They used the touch screen interface to define how tablets should work.

When Apple introduced “Planet of the Apps,” they copied existing shows, offered nothing new or better over existing reality TV shows, and created a show that doesn’t quite appeal to their market of higher income consumers. Reality TV shows need to fake emotions so they tend to cater to a crowd less concerned with thinking and more concerned with raw emotional appeal like watching car crashes.

If Apple really wanted to create original content, they should start by focusing on their core market of high-end consumers. What type of show would the average iPhone user want to see? Chances are good, a phony reality TV show wouldn’t even be a close choice.

Instead of copying existing shows and giving it a silly twist, Apple should have focused on redefining what could make a TV show appealing, popular, and important as well – and a reality TV show wouldn’t even make the cut as an option.

“Planet of the Apps”, like the cylinder Mac Pro and hockey puck round mouse of the original iMac, shows that Apple can screw up at times and screw up big. Hopefully Apple will learn from their mistakes and create something more in line with their corporate values and image, and a trashy reality TV show that demands exaggerated emotional reactions will never be it.

Apple’s Original Content

Posted on February 25, 2017 by admin Posted in Business Leave a comment

What it is: Apple is offering original content starting with a show called “Planet of the Apps.”

Netflix, Hulu, and Amazon quickly realized that simply offering TV shows and movies that others have produced reduced themselves to peddling the same products as everyone else. That’s why they moved into original content such as shows like “Orange is the New Black.” That way if you wanted to see those shows, you had to subscribe to one particular service.

Apple has finally realized that they can’t simply offer the same TV shows and movies as everyone else so they need to create original content exclusively for Apple TV and other products as well. Their first offering is a reality show “Shark Tank” clone called “Planet of the Apps” where developers pitch their ideas to celebrities.

While this may be a strange start to original content, at least it’s a start. Reality shows are cheap to produce because there’s no script, sets, or costumes to worry about, which is why major TV networks favor reality shows as well. The drawback of reality shows is that they’re just not that compelling enough to encourage people to subscribe. Reality shows may be cheap to produce, but they lack the draw of a major series like “Game of Thrones.”

Original content is the key to any TV service/network. That’s why ABC, CBS, and NBC created unique situation comedies and dramas that attract an audience. If you wanted to watch “Seinfeld” or “Friends,” you had to watch NBC. The market is no different for online TV services like Apple TV or Netflix.

Creating original content is going to be a hit and miss situation for anyone including Apple. Even the major TV networks had their share of major embarrassments over the years so any original content Apple creates will have its flops as well. That’s just part of the business.

So whether “Planet of the Apps” draws anyone in or not is debatable, but original content is the key. The more interesting content exclusive to one service, the more likely they’ll draw a larger audience. The real key is whether Apple has the stomach to invest in original content over the long-term to insure they’ll eventually have some hits to go along with the many inevitable misses they’ll produce.

Original content is no guarantee of success but without it, there’s a guarantee of failure. Nobody has the key to producing successful original content over time so this is an area where Apple’s brand won’t help them and their past engineering achievements have little basis for predicting future successes in original shows. Apple is a novice in the original content TV business and they either have to accept this fact and deal with the consequences or not even bother trying.

The future will tell how committed Apple may be to original programming. Unlike software and hardware engineering, it’s difficult to design original content successfully on a consistent basis so it will be interesting to watch how Apple TV evolves (or fails to evolve) over the next few years.

The Failed Apple/Time Warner Merger

Posted on May 27, 2016 by admin Posted in Business Leave a comment

What it is: Apple’s Eddie Cue mentioned that Apple considered acquiring Time Warner last year.

Hardware is a commodity. As soon as Apple or any other company creates a product, copycat knock-offs immediately appear. It’s fairly easy to make copies of hardware and that’s what makes relying on hardware sales so risky because copycats will undercut your price, forcing you to compete by cutting profit margins more and more. That strategy is known as the race to the bottom where everyone keeps cutting razor thin profit margins until there’s nothing left for anyone.

That race to the bottom helped kill PC profits and it’s starting to hurt smartphone and tablet sales as well. Android manufacturers are particularly vulnerable because people can buy Android devices from a variety of companies, so the only compelling advantage any company has is to lower their prices.

Apple can somewhat avoid this hardware commodity trap by selling iPhones and iPads. Not only does Apple make money selling hardware, but they make additional money selling services such as music, ebooks, or apps, which is something Android manufacturers can not do.

That’s one problem with Apple TV. Right now it’s just a box that connects a TV screen to the Internet, and any company can sell you a cheaper box that does the exact same thing. For years, Apple has tired to negotiate with various TV studios and networks to get exclusive content for the Apple TV, and that’s why Apple’s Eddie Cue mentioned Apple once considered acquiring Time Warner.

Exclusive content is the reason why Amazon and Netflix can charge subscription prices. In the old days, Netflix simply let you rent DVDs, and anyone can do that. Then Netflix let you stream videos, and anyone can do that. That’s why Netflix created original content so if you want to watch certain TV shows or movies, you have no choice but to subscribe to Netflix.

That’s why Apple needs to create original content of their own. Once they have unique shows that are only available on Apple TV, then they can compete. Until then, Apple TV can have all the fancy hardware features you want and it still won’t matter because copycat clones will immediately appear that offer the exact same features for less cost.

The future of Apple TV is original content combined with links to the Apple TV app store and additional services allowing Apple TV owners to buy music and stream videos. The Apple TV app revolution has yet to take off because Apple TV still doesn’t offer anything more than what other devices offer. Apple TV has a future, but it’s not quite there yet.

Until Apple starts creating original content, rumors will continue about them acquiring a content creator like Netflix or Time Warner. It’s inevitable that Apple needs original content. The only question is who might Apple acquire or how will Apple create original content on their own?