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Apple Takes Aim At Netflix

Apple Takes Aim At Netflix, As Competition In TV Streaming Intensifies - StrategyEye StrategyEye

Apple Takes Aim At Netflix, As Competition In TV Streaming Intensifies

Another Apple product launch event, another spate of rumours over its plans in TV, but this time the word is that Apple is moving into original video content. The fourth generation of Apple TV, which is expected to launch this month with much deeper Siri integration, is reported to retail for between USD149 and USD199. That’s a significant step up from the USD69 figure for the current product, suggesting the device will be packed with a lot more features. Apple is expected to release a programming bundle aimed at replacing cable service, with current price estimates pegged at around USD40 per month, next year, according to 9to5Mac sources. However, more interesting news comes in the form of further rumours about the future of Apple’s content plans.
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Content
According to reports by Variety magazine, Apple has held preliminary talks with media executives to start producing original content, seemingly on a scale to rival Netflix. Apple hasn’t released any official details and it is unclear whether it will focus on TV or films or both. Nor is it clear whether external studios or an internal team will produce original content.
It’s just the latest sign of a move towards original programming from a major tech player. Apple was one of the first major names in online film with its iTunes store. While that transaction-driven model is now looking increasingly creaky next to the big subscription streaming platforms, Apple knows the importance of exclusive content in driving revenue. This is particularly pronounced in the independent cinema space where it has secured a number of exclusive content deals for a range of high-profile independent releases, including critically-acclaimed titles like The Trip and Chef.
Earlier in the year, the company reportedly bid unsuccessfully against Amazon for the rights to the new Top Gear. Amazon eventually won the bid for a reported USD250m. Outside of film and TV, Apple has also been moving towards original content with its Beats 1 radio station, which launched as part of Apple Music. Apple has huge (USD200bn) cash reserves, so it has plenty of weight to throw around when the time to move into original content comes.
The expected release of Apple Music for Android also points to an Apple that looks to become more platform agnostic – something that will become more important if it wants to position itself at the heart of the entertainment technology space.
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Other Companies
Netflix recently cancelled its contract with distributor Epix, which has cost the platform thousands of films, including major franchises such as Transformers and The Hunger Games. Fellow streaming firm Hulu will take on the Epix catalogue. In the light of Apple’s gestures towards original content, Netflix’s decision here shows increasing confidence in its own ability to continue sourcing and developing high-quality content – instead of paying high fees for popular studio content. Apple would also follow Amazon into the space, which is also investing in original content.
And while no-one necessarily wants a competitor the size of Apple in their field, more competition is likely to raise the standard of original programming as competitors vie for viewers.
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