Historic Oscars win for CODA is just the beginning for AppleTV+
Opinion
Chris Rock wasn’t the only one to get a slap in the face last night. Apple just dealt a huge blow in the streaming wars, writes the editor.
“When the facts change, I change my mind. What do you do, sir”, the great economist John Maynard Keynes once said and for which will be endlessly quoted for eternity.
When it comes to AppleTV+, my opinion has changed starkly over the course of the pandemic, as my Twitter feed shows. When the streaming service first launched in 2019, it seemed like the nascent streaming service had overextended itself by ploughing a reported $15m per episode on the Jennifer Aniston-led drama The Morning Show, but offering little else for charging the best part of a tenner each month.
I’ve had Apple TV+ for free for the last year and I’ve watched precisely one series on it. I can’t be the only one – what’s the point of it?
— Omar Oakes (@OmarOakes) October 28, 2020
In a previous column, I even had a go at poor old Ted Lasso, branding it as a “sentimental comedy based on a reheated ad campaign”. But I’m still right about that.
The difference now is that Apple’s huge investments are paying off and will enable AppleTV+ to seriously rival the longstanding incumbent Netflix, and Disney+, which has soared in global subscription growth despite launching after Apple.
The fact that AppleTV+ became the first streaming service in history to distribute a Best Picture winner at the Oscars, CODA, is hugely significant. Not least because it appeared to coincide with the first time a host had been slapped on the show.
In December a report by Ampere Analysis said Apple TV+ had invested over $8bn in original content in 2021, as had Disney+, HBO Max, Peacock and Paramount+. Apple is consistently being linked with acquisitions for production studios – Ted Lasso is shot in south-west London’s Richmond and the tech giant is reportedly interested in bidding for a development in Enfield (as are Netflix) to add to its studio space in Aylesbury, Buckinghamshire.
But there are two main differences between what Apple seems to be trying to do with streaming that differs from the Netflix or Disney+ playbooks.
The first is (perceived) quality versus quantity. To an extent, Netflix is beginning to suffer from a version of ‘licence-fee syndrome’, in which people struggle to evaluate how much utility they get from a streaming service because it is difficult to compare with alternatives.
The argument is often made by critics that the BBC licence fee offers “poor value for money”, but there is no other media service in the world that offers a comprehensive global news service, national radio network, national TV network, and online output for a sum that is comparable to a streaming account. If you want a pay-TV package that includes Sky Sports, you can easily pay close to the equivalent of a licence fee per month.
Likewise Netflix has felt like the ‘must-have’ streaming option because there is so, so, so much content on there. But, as I wrote last September, having ‘too much choice’ in media services suggests there is not enough curation. Any regular streamer knows the pitfalls of endlessly scrolling through electronic programme guides because there always feels like something better around the corner.
This is what partly explains the meteoric rise of Disney+ – its content catalogue is nowhere near as deep or broad as Netflix, but the shiny lights of Marvel content, Star Wars content, Pixar content, Disney animated content, are a massive draw as the places to get exclusive content.
This is why, as Wavemaker’s Monica Majumdar has written today, Disney’s streaming strategy has benefitted from what I’d compare to good old-fashioned appointment-to-view broadcasting. I will watch Moon Knight this week because I’m invested in the Marvel never-ending-storyverse. It’s the anticipation of what’s to come, as Majumdar identifies, that makes me loyal to Disney+, instead of hoping I stumble across another House of Cards or Tiger King.
Where AppleTV+ seems to have been canny so far is to offer exclusive content that, being the brand that Apple is, is regarded as super-premium. The kind that wins awards and provokes thought, rather than rely on rehashing wildly popular IP or expanding its library so wide that it seems too cheap to cancel. Hence Apple’s investments in Jon Stewart, the excellent Ben Stiller series Severance, and WeCrashed, in which Jared Leto portrays WeWork founder Adam Neumann.
And then there is the massive advantage of being vertically integrated. Any iPhone or iPad user can almost seamlessly access the streaming service whenever they are sent a notification from Apple to their device. The TV app is preloaded when you buy that device. The headline price of buying it can be made cheaper bundled with cloud data and access to ad-free games.
Unless Netflix or Disney plan to launch their own hardware, vertical integration will always be a massive advantage for Apple in the streaming wars.
How much of an advantage? More than half of people in the UK use a device with Apple iOS software.
Amazon has done well to offer budget Fire tablets, while YouTube owner Google produces excellent Pixel phones, and I would look at those two tech giants as ones to watch as these wars continue to intensify.
For Netflix, meanwhile, the next step must be to acquire or be acquired. Last week it announced its third acquisition in the gaming space, and that might well be a path to diversified revenue success.
But a bolder move, such as a merger with Spotify or Roku (both of which sell advertising), might be the only way to broaden itself sufficiently to complete with tech conglomerates for which multibillion-pound content investments are small compared to income from hardware and cloud computing sales.
It seems that Chris Rock wasn’t the only one to get a slap in the face last night. Apple just dealt a huge blow in the streaming wars.
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