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Apple is competing with Netflix, Amazon, Disney, and Hulu to become a streaming entertainment company. Zack Van Amburg and Jamie Erlicht, former Sony bosses head up Apple’s TV efforts. The team is said to be 40 staffers and there is a billion dollars in programming money.

According to this report, Apple is spending money and beating other streaming services as a buyer, but rest of the details about its efforts remain pretty murky.

“I’d sell one-off deals with Apple all day long. But I’d never do a [major, long-term talent deal] with them because I don’t know what it means to be an Apple show. How do they market it? Where’s it going to show up? How are people going to see it? It makes no sense to me.” Hollywood Agent.

Apple’s play here is very much like its efforts in the music streaming business. In music it doesn’t have to be as big as Spotify, it just needs to have a music service that is big for Apple’s platform and in turn makes the company a lot of money on a monthly basis. The 40 million and growing Apple music subscribers are adding to the “revenues” of the company, which sooner or later has to contend with peak iPhone.

Television too offers similar revenue opportunities. It doesn’t need to be as big as Netflix, which has 125 million subscribers. It just needs to be good enough and big enough on Apple platform. However, like Music, Apple’s TV efforts are not going to be as margin rich as say its app store. Ben Schacter, analyst with Macquarie Research estimates that Apple’s App Store gross margins are around 90 percent.

That said, most of the shows Apple is linked with so far, don’t inspire me to sign-up for Apple TV. My quasi-free Amazon Prime TV is plenty good for now.

Read article on IndieWire

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Read article on IndieWire

Om Malik

Om Malik is a San Francisco based writer, photographer and investor. More....

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Letter from Om

A (nearly) bi-weekly dispatch about tech & future.

You will get my reporting, analysis, conversations, and curation of the essential information you need to make sense of the present future.

Check your inbox or spam folder to confirm your subscription.

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