The moment the media and technology industries have been expecting for years may finally be arriving: Apple is exploring getting into the original programming business.
Sources indicate the Cupertino, Calif., colossus has held preliminary conversations in recent weeks with executives in Hollywood to suss out their interest in spearheading efforts to produce entertainment content. The unit putting out the feelers reports into Eddy Cue, who is Apple’s point man on all content-related matters, from its negotiations with programmers for Apple TV to its recent faceoff with Taylor Swift.
An Apple representative declined comment.
The scale of Apple’s ambitions vary depending on whom is asked, but one high-level executive who talked with the company said the goal is to create development and production divisions that would churn out long-form content to stream in a bid to compete with Netflix. Apple is hoping to put a headhunting firm on those hires in the coming months, according to source, with the goal of being in operation next year. Unknown is whether the focus is on TV series, movies — or both.
Other sources described the company’s exploration as more of a flirtation, though one pointed to a recent sign that an escalation of interest is clear: Apple is said to have made an unprecedented bid to secure the stars of “Top Gear” when they exited their BBC series earlier this year. But Amazon ended up winning the bidding war for Jeremy Clarkson, James May and Richard Hammond in July.
The prospect of Apple going Hollywood has been bandied about for at least as long as the decade that has passed since Steve Jobs joined hands with the studios to make TV shows and movies available on iTunes. Given the often fractious relationship between the media and technology sectors, there’s often been curiosity as to why Apple doesn’t just build its own content capabilities, if not acquire a studio outright.
Such a move would have huge implications in the content world, potentially setting up a showdown with other streaming juggernauts including Netflix, Amazon and Hulu. Apple’s entry would sharpen a double-edged sword those companies are already swinging at Hollywood: a powerful new competitor that could steer eyeballs away from the traditional pay-TV world but also possibly a new buyer for content from existing studios.
For Apple itself, getting into original programming would be significant, but not necessarily earth-shattering. While financing its own exclusive content would be an interesting strategic shift that could better arm Apple in its global war against other tech giants like Amazon, Google and Facebook to be the ecosystem where users spend the most time, the hundreds of millions — perhaps billions — of dollars necessary to get into TV and movies is chump change to CEO Tim Cook, who has over $200 billion in cash on the corporation’s balance sheet at his disposal.
Given how early Apple is in the process, details are sketchy. It is unclear, for instance, if the company intends to structure itself like Netflix and work with outside production entities or attempt Microsoft’s ill-fated Xbox model, which entailed setting up an internal studio.
Another area where Apple can organically grow its content efforts is in independent film, where the company has quietly been snapping up content on the festival circuit for distribution on iTunes for years. One source familiar with Apple’s efforts in that business says Apple reps have mentioned expanding into original content as a possibility.
Another big question mark is what shape Apple’s content play would take; the company has been criticized for leaving the door open for Netflix’s a la carte model to flourish by opting for a transactional business instead of the subscription VOD route that has proven to get more traction with consumers. Monthly price — if that’s even the model Apple chooses — would be key given the competitive marketplace, though it’s conceivable there wouldn’t necessarily be a price if Apple chose to go the ad-supported route, a path it has contemplated in various iterations of its Apple TV strategy.
That device, which is expected after years of languishing to get a significant upgrade at a press event Apple is hosting next week, could be central to the company’s content plans. With long-developing plans for Apple to employ a virtual-MSO strategy akin to Sling TV or Sony PlayStation Vue still in limbo as content owners drive a hard bargain, it’s possible the company is willing to take on filling the content pipeline itself to at least supplement the service. But it’s highly doubtful the programming piece would be in place by next week, let alone any time this year.
Apple has also shown it’s not averse to pivoting content strategy in the streaming music business, where the recent launch of Apple Music was clearly a response to the success subscriptions have achieved with rivals like Spotify.
Apple Music is also where the company has dipped a toe into original content production for both audio, the format of its celebrity-studded Beats 1 radio program, and video, where some chart-toppers have created music videos with Apple’s backing. Some sources say that the original content efforts could end up being an extension of that strategy.
Episodic video content would be a significantly bigger outlay, though how big will be determined by whether Apple puts an emphasis on long-form scripted fare or hedges its bet with more unscripted content, where YouTube in particular has made a more modest investment betting on digital-native talent.
YouTube recently raised eyebrows by luring MTV programming chief Susanne Daniels to head its original content efforts. Regardless of what strategic direction Apple goes in on the same front, it’s a sure thing that a company as well capitalized and impeccably branded as Apple will attract top-shelf executive talent.
TV operators are looking to launch OTT services to provide multiscreen access and compete with the likes of Netflix, with most favouring a hybrid model, according to research by MPP Global.
MPP found that 60% of operators said that hybrid OTT, combining transactional and subscription video-on-demand in a single service, was the model best suited to their business.
According to MPP, four out of five operators see changes in how their customers are accessing goods and services, and three out of four are integrating new pricing and delivery models such as SVoD and TVoD. The research found that 86% of operators anticipate that revenue from SVoD and TVoD services will increase over the next 18 months.
According to MPP, 37% of organisations believe that these new pricing models deliver competitive differentiation, while 32% believe they provide additional revenue opportunities and 32% believe they reduce churn.
The research found that TV operators favour three broad pricing and packaging models. The first is to introduce smaller, tailored or personalised bundles of content and channels users have chosen for themselves, rather than a big bundle. Second, they are favouring time-limited passes, such as the day, week and month passes offered by Sky for its Now TV service, and third, they are looking to make use of video metering technology to offer freemium services, providing consumers with limited free access to video content, based on a choice of considerations which the operator can define, such as happy hours offering free access at low usage periods. With the latter model, operators have an opportunity to attract customers by offering free access before asking them to sign up for a transactional or subscription service.
Some 56% of organisations surveyed believe that cloud technology has been the primary driver for new delivery models.
“This research shows how the OTT market is constantly evolving and growing. With an increasing need to reach and attract customers and stand out from competitors, more and more TV operators are shaping their business models to accommodate consumer demands while offering a reliable revenue stream. We can expect to see the number of OTT models continue to increase with consumers embracing the changing way they can view and pay for video content,” said Paul Johnson, CEO of MPP Global.
Facebook is making a “serious play” for content owners and looks poised to take on YouTube’s dominance in video content, according to a new research report.
Ampere Analysis said that Facebook’s video views are “rocketing” and that recent trials with content owners like NFL and Fox Sports “suggest it’s primed to become a plausible alternative to YouTube.”
The report claims that Facebook’s video views are “catching up” with YouTube’s and will exceed two trillion this year – two thirds of YouTube’s projected total for the same period.
Ampere said it expects Facebook to trigger an “advertising ‘arms race’” by competing directly against YouTube for user-uploaded video audiences and predicted that it would start to introduce pre-roll ads on some of its video content to improve revenue-return for key content partners.
“As Facebook moves from testing its advertising models to more actively soliciting content creators to join the platform, it will come under increased pressure to match the opportunities and per view returns generated by other platforms – notably YouTube,” said Ampere research director and former IHS analyst, Richard Broughton.
“Ultimately, despite Facebook’s current reticence around offering pre-rolls, it may have to bite the bullet and add them to its repertoire. If the social network’s own video ambitions are to be realised, and if it is to convince content owners it is a viable alternative to YouTube, it must deliver comparable returns.”
According to Ampere estimates, almost 15% of internet users across Western Europe and the US have watched videos on Facebook in the last month, while a sixth of Facebook video viewers have not watched YouTube in the same time period.
At its F8 developer conference earlier this year, Facebook said it would now let viewers watch and interact with Facebook videos from anywhere on the web, with the launch of its new embedded video player. At the same time the social network previewed an “immersive, 360-degree video experience” in the service’s news feed that lets viewers choose the viewing angle to explore your surroundings.
Earlier this year, Facebook reported an increasing shift towards visual content, claiming that in the past year the number of video posts per person has increased 75% globally and 94% in the US. Since June 2014, Facebook claims it has averaged more than one billion video views every day.
Online video platform Vessel launched its paid subscription service on Tuesday, offering programming at least three days before other websites in a bid to reshape an industry dominated by free content on Google Inc's YouTube. Vessel, which costs viewers $3 a month, was founded by former Hulu Chief Executive Jason Kilar and Chief Technology Officer Richard Tom. "There are a lot of consumers who would love to see something early." More than 130 creators will provide early access to content on Vessel. After the exclusive period ends, videos can go to YouTube, Vimeo, Vevo or other free, ad-supported sites, and are free on Vessel.
In December of 2012, Flurry released an analysis on the rapid growth of time spent inside mobile applications. In a post titled “Mobile apps: We Interrupt This Broadcast” we talked about how mobile and its apps have put the desktop web in their rearview mirror and set their sights on television.
So, for once (at least), experts were right The mobile consumption is increasing and becoming very very big. And it should keep to grow in the coming years.
hile, is definitely on the rise, jumping to 11 hours per month, up from seven hours per month this time last year. An increase in exclusive content, like the Netflix hit Orange is the New Black, is likely driving much of the interest. Netflix also noted recently that it is paying $90 million for a new series, Marco Polo. Content-wise, that's second only to HBO's Game of Thrones investm
Serial entrepreneur and mobile consultant Hannah Bree Hanson and I were in attendance at the Streaming Media West Conference last week in Huntington Beach, CA. The event featured a veritable who's-who of industry leaders including Verizon, Limelight ...
Very interesting though some were already trending in 2014.
Still, the 10th is a pity. Let's hope it will be gone by 2016.
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