Join top executives in San Francisco on July 11-12, to hear how leaders are integrating and optimizing AI investments for success. Learn More
In the midst of Apple’s recent quarterly results, reports emerged that Apple’s video streaming service is ready to launch this spring. And the company has confirmed it will be investing in original content as “viewing habits shift”. If the reports are to be believed, Apple will be beating Disney+ — the streaming platform from Disney — to the market.
Much like the competition between the giant studios of the 1930s for winning scripts and identifying the best talent, there is a burgeoning tension between those vying for a stake in the streaming revolution. The battle between tech companies (the likes of Netflix, Amazon, Apple) and traditional creative powerhouses (such as Disney or the BBC) is intensifying by the day, and one thing will determine the winner: content.
Audiences will turn to the platform with the best stuff. Knowing this, Netflix ramped up investment in original content to $13 billion in 2018. Combining this level on investment with its 130+ million subscribers across 190 countries is paying dividends for Netflix: The company recently announced it has tripled profits to $403 million after its “broad slate of original programming helped drive a solid quarter of growth”.
Disney may have realized how much of a threat the Netflix model is slightly too late. Now the company is making up for lost time by removing Disney and Marvel content from Netflix. This creates an interesting dynamic: Netflix has the advantage of moving first and having an established user base, but it’s being forced to spend astronomical sums to produce its own content. Meanwhile, the mouse-mascotted media mammoth has an unrivaled encyclopedia of content but no current platform or user base.
The scramble to create content has come with unforeseen consequences. There is now a mass congestion for studio space. The demand for content simply exceeds the space to make it. Netflix and Amazon are booking studio space years in advance for projects that are all still titled “TBC.” This is an issue I became aware of through my company, Rebellion, when looking to shoot our own productions. We found the congestion so bad that we decided to purchase our own 215,000 sq ft movie studio.
The medium no longer matters
The battles for original, engaging content signify that the power is returning to entertainment’s two fixed points — the consumers and the creators. Consumers just want the content they care about; they don’t care which medium it comes through or what brand delivers it. For creators, it is their content that keeps these services alive. Original ideas have never been more sought after, or more valuable.
For Apple, these new dynamics are important to consider. The brand revealed a drop in revenue and profits during its latest results, with revenues from iPhone sales (which accounts for around two-thirds of Apple’s total revenue) declining 15 percent for the last quarter despite revenue from “other products and services” growing by 19 percent. These results indicate that Apple’s streaming service may become increasingly crucial to maintaining the brand’s fortunes.
There is much to be said about the strength of Apple as a brand, but if the company wants to emerge victorious as the dominant streaming platform, it will have to acknowledge that it’s brand influence counts for nothing in this arena. Only content is king.
In any case, as we watch these content wars develop, we can at least hope to be entertained.
Jason Kingsley is Co-founder and CEO of game developer Rebellion.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.