Monday, October 31, 2016

Why Apple Should Buy A Content Company

In a world where a box is just a box and distribution needs original and exclusive content to drive growth, media is big business.  And given the insatiable appetite for content affecting every consumer, content drives usage and multiple revenue streams.  Content can be purchased, it can be rented, it can be advertised; it can be downloaded and streamed and provide rich, measurable date about the user and usage.  And Apple should invest more in the business.

It is true that Apple has been dabbling in content with a trove of downloadable content on its iTunes platform.  And it has been build out a music streaming business.  But there is much more room to grown and acquisition may be the means to building a bigger better business model.  I have suggested a bid for Time Warner for its cable programming and theatrical distribution business and I have suggested other cable networks as a stepping stone into the media production and distribution universe.  Business Insider thinks that Apple should make a play for Netflix.  In the article, Stratechery analyst Ben Thompson says ""If Apple wants its usual ownership of end users it needs to buy its way in, and that means buying Netflix." With original and acquired content, Netflix's streaming model could enhance the Apple Music value, enabling packaging scenarios to drive further adoption of both models.  And it could also add value to the Apple TV business. 

Is Apple even looking at Time Warner, Netflix or other content creators and distributors?  The worry is that Apple is not innovating enough, not driving further adoption, not expanding, and facing increased competition from those eager to push Apple off the top of the mountain.  Maintenance and remodels of current products are not enough to remain a leader; rather, it says that you are treating your business more to maintain value than drive growth.  Beyond any possible plans to create a new technological product, Apple should look at content makers like Netflix to grow its business.