Customer Focused Video Content Superseding Broadcast, and Apple is on Board

| Editorial

For a long time, the TV entertainment model was for content creators to work through a middleman, a network. That meant appealing to as many as possible viewers and serving up the accompanying commercials. The Internet is changing the rules, and now focused content, direct to the viewer, is taking off. Even Apple is on the bandwagon. But can Apple make it work?

Two items crossed my desk today at almost the same time. As it so often happens, the intersection of two ideas got me thinking. Here they are.

#1. Ben Silverman, Producing Unscripted Series for Apple. The short version:

[Apple] has teamed up with executive producers Ben Silverman, musician and Howard Owens’ Propagate for an unscripted series about the Apple app ecosystem. Apple is offering few details about the project, but Silverman says it will, at least in part, highlight the stories of how Apple apps are developed.

#2. Netflix Content Portfolio Down 32% Since 2014 The title misses the key point, which is:

Clearly, Netflix is spending money on content. It’s just not buying in bulk anymore. While observers may question the quantity decline, Netflix would rather attention be paid on quality — as in original and exclusive content. [Emphasis mine.]

This all fits in with what Apple had been trying to do for a long time and failed: become just another middleman, squeezing the price down for the customer and being forced to cough up the premium prices asked for modern content. I've explained why this just didn't work. "3 Reasons Apple’s TV Subscription Service Failed." I noted:

So when a company like Apple comes along and threatens to settle for very minor profits as it proposes to cause a net loss in total industry revenue, the natural reaction by the entrenched players was likely, 'Hey, you can have this service so long as our total revenue goes up, you don't threaten our business partners, the carriers, and we get to control the relationship with the viewer. Here are our terms for that.'

What Netflix figured out before Apple is that once you have the infrastructure to connect directly to a customer/viewer, it's generally very hard to pay big bucks for content, keep your prices reasonable, and still make money. And so you get more integrated, create your own content, and cut out the middleman. HBO figured that out. ShowTime figured that out. As have others.

And even though HBO Now has only captured a fraction of the total HBO subscribers on cable/satellite, the future trends are unmistakable.

Next page:  Apple Gets On Board With Content

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Great points John!  Bezos has also figured this out (Amazon is just warming up to providing its own content), just as Elon Musk and Jeff Bezos both figured out that vertical landing and takeoff with reuse is the key to affordable space access.  This reminds me of Mark Twain’s comment “When it’s steamboat time, you steam.”, which was his way of saying that when the economic and technological feasibility is in place, change happens. As many have pointed out, the steam engine was first developed about 2,000 years ago but it wasn’t until the 19th century that steamboats really happened.  It is now time for end user IT providers to become content providers and cut out the middleman.


If everyone has there own voice ... I really don’t want to have to buy separate devices and subscriptions to get the content I want from all the different places. So long as I can pay for just what I want and view it on devices I already have, then this could work.

Example: the only TV show I pay for is Dr Who. It is available on iTunes so I use that.

Counter example: I have not bought a new generation Apple TV so any content that requires that device I cannot enjoy. Similarly I do not have a Netflix or Amazon Prime account so cannot enjoy their unique, proprietary content. Fortunately I haven’t heard of anything that I am really interested in anyway. (My wife’s solution is to have parties at friends houses, who has access to what show chooses the venue.)

I am also not excited about Apple becoming too distracted by getting into content creation. If they manage to keep it in subsidiary brands and run by the executives of those companies, like having Beats do all the Apple Music content, so that the Apple computer executives can focus on computer-like devices, then I’ll be happier.


All this maybe true in the USA, but it many other countries where the majority of viewers have free to air TV and access to Sky, Netflix et al are going to have an uphill struggle.
Here in our house, we have Netflix, but we also have Freesat and if we felt like paying Sky, we could have even more. Save to say, when we first got NF we watched everything it had, but now our usage is tailing off. The majority of films are more than 12 months old, TV series the same (except for NF’s own content). But all these streamers are up against a formidable and entrenched opposition, who still pump out a lot of very watchable materials.
I’d say now our main viewing is 80/20 in favour or Freesat and unless NF or any other streamer starts producing the levels of variety that we get on Freesat, I don’t see that changing soon.
I mean good luck to Apple if they go the NF route, but my guess is that they will struggle with traction outside the USA.

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