History shows us that when Apple decides to invest heavily in a new business venture it will aim for the top. This is a company with cash balances of $230 billion and a business which continues to generate cash. At some point the phenomenon which is the iPhone and iPads will fade away and it looks as though Apple is already looking to counteract slowing sales. So, what can we expect from a move into Hollywood?
Original TV content
The likes of Amazon and Netflix have made headlines over the last few years investing hundreds of millions of dollars into their own production companies. Amazon recently took on the Top Gear team on multi-million pound contracts and a production budget which dwarfed that of the BBC. Netflix is already renowned for its own movies and this is a company going from strength to strength and one which Apple will likely be targeting. So, how will Apple enter the television shows and movies market?
At this moment in time Apple is a production company which distributes other people’s media around the world. Whether this switch towards media production will impact any current relationships with other media companies remains to be seen but who could turn down a relationship with this giant?
Acquisitions or start-up business?
With a $230 billion warchest there is no doubt that Apple could literally acquire the vast majority of media businesses around the world. There is speculation the company is looking at Netflix but insiders suggest this is a red herring. Let’s not forget that Apple is a company which is the master of media manipulation leaking stories and rumours at will. Therefore, we can pretty much dismiss the takeover speculation especially when you bear in mind the company has never spent more than $3 billion on a takeover (that of Beats Music in 2014).
If you look at the figures for Apple you will also see the company has made just one third of the number of acquisitions of rival powerhouse Google. This despite the fact the company has been in business far longer than the search engine giant.
Could Apple alienate Hollywood?
History shows us that Apple tends to get its own way and is not afraid to trample over customers and competitors to get there. The infamous $0.99 music download deal alienated many in the industry and there are some fears we could see a repetition with Hollywood studios. There may eventually be cross deals with Apple and other content providers but the inside line seems to be that movie companies are not keen to jump into bed with Apple just yet. So how will this be resolved?
If you take a step back and look at the situation from a distance, Apple has access to iPhones and iPads which are the perfect medium for content distribution. Therefore it is likely the company will do an array of deals in the end, the terms may be a little more favourable to others than they have been in the past, but it will always hold the distribution ace card. Eventually full-blown content production will likely follow once the company has got its feet under the table and is a little more knowledgeable in the “ways of Hollywood”.