Tuesday, June 30, 2015

Apple Should Expand Its Streaming Business

The big news on Apple the last couple of weeks was the Taylor Swift fiasco that turned quickly into a marketing bonanza.  From chastising Apple on refusing to pay artists during their three month free preview to gaining her content on the Apple Music Service.  Not on Spotify or Pandora, Swift agreed to stream her music with Apple.  And Apple's introduction into the monthly music streaming business will provide them with another ongoing revenue stream, month after month after month. 

Apple will get a taste of what the cable industry has enjoyed for years, a regular, measurable, monthly stream of revenue.  And I believe that once Apple starts to see the trickle of dollars explode into a sustainable business, they will start to expand this corner of the business.  That means that Apple TV will be released with an OTT line-up of video content to compete against other video subscription services.  Of course, if Apple chooses, they have the free cash to just buy an existing business.  Should Apple start pursuing Netflix or Hulu? Perhaps partner with Sony to grow their Playstation Vue service or with Dish and their Sling TV subscription service?  Or as it may appear, simply build a video OTT subscription service from scratch. 

The allure of subscription revenue is surpassing purchase and download.  Consumers seem to like the connect and access model for receiving content.  And as more consumers access mobile to connect, the cellular companies especially enjoy watching data plan usage soar and revenues rise.  And as consumers, we pay twice, once for our monthly subscription and second to pay for more data usage.

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