Analysts Think Apple is Missing Studio Deals and More Streaming Content By Not Making Studio Deal
Apple may need to make a strategic purchase to keep up with its competitors according to some industry insiders. In May, Amazon acquired MGM, bringing more content to its streaming service, Amazon Prime Video. Wall Street analysts are weighing in and believe that Apple TV+ is currently lacking in content.
Many of those analysts feel that Apple needs to purchase a studio or perhaps multiple studios to remain competitive in the streaming race. At this point, it’s unclear why Apple has yet to purchase a studio. Analysts agree that acquiring a studio wouldn’t set the company back financially. In the first quarter, Apple reported $16.9 billion in revenue and has 660 million subscribers.
Hal Vogel, CEO of Vogel Capital Management, has a possible explanation for Apple CEO Tim Cook’s reluctance to acquire a studio. Vogel explains Cook may be “afraid of shareholder blowback if he goes Hollywood in a big way.” In an interview this year, Cook said, “We’re about making the best, not the most, and so in the TV Plus area, we’re about originals only on Apple.”
Apple TV+
Apple TV+ is a subscription video streaming service for $9.99 a month that includes high-quality original shows and movies including Best Picture winner “CODA,” popular sitcom “Ted Lasso,” and dramas like “The Morning Show” and “Severance.” Apple TV+ is also home to MLB baseball games on Friday nights and MLS Season Pass.
While Cook doesn’t seem to be concerned by the competition, analysts think that Apple missing out on MGM and other studio deals is a problem.
“Apple has made a major strategic mistake not buying a Hollywood studio while Amazon, Disney, Netflix and others run away with content,” Wedbush analyst Dan Ives said. “Content is king, and Apple built a mansion with hardly any furniture in it. MGM was a no-brainer acquisition for Apple, and they missed a huge opportunity.”
“Amazon’s smart acquisition of MGM will spur studio M&A by its big tech streaming competitors [that] now face a crisis of content,” said Peter Csathy, chairman of advisory firm CreaTV Media. “Netflix is in search of franchises. Apple, too. Even Amazon may not be done yet — for both offensive and defensive reasons.”
Per a MoffettNathanson study, most Apple TV+ subscribers are those using the free trial offer included with the purchase of an Apple item. It seems that part of the reason that users aren’t paying for the subscription themselves is due to the lack of content. While Cook may not want to create a large content library, it may be necessary for the success of Apple TV+.