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, Will.i.am Producing Unscripted Series for Apple. The short version:
[Apple] has teamed up with executive producers Ben Silverman, musician Will.i.am 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