Netflix and Amazon have both done some amazing work in creating original programming for their respective streaming services. Shows such as Sense8, Transparent, Daredevil and Marco Polo have helped increase customer satisfaction and loyalty to Netflix and Amazon. But is it time for Apple to consider planning its own original programming?
One analyst thinks that we will someday see Apple join Amazon and Netflix in winning Emmy awards for original programming.
Susannah Lee reports for Yahoo Finance:
“It’s been a difficult road for Apple TV for us," admitted Munster. "We thought that is was coming in an actual panel and that’s not the case.”
But he hasn’t given up hopes that Apple may one day be nominated for an Emmy and join the likes of Netflix (NFLX) with its 34 nominations and 12 for Amazon (AMZN).
“Apple wants to do more in the living room and this fall, we expect them to have some sort of streaming service," he said. "If you think about their broader goals and ambitions, we think content could be a part of that.”
But this is a long term view. "Fiive, ten years down the road, I wouldn’t be surprised to see Apple getting some sort of a nomination as well,” said Munster.
I'm inclined to agree with Munster about Apple creating original programming, but I hope he's wrong about the timeline. Five years is far too long for Apple to wait to jump into the video streaming market created by Netflix.
Original programming creates strong viewer loyalty
Original shows and movies that are only available on Netflix or Amazon help to create sustained viewer loyalty to those services and lock in subscription revenue. Both companies realized this some time ago, and have made original programming a big priority in their plans and budgets.
Viewers quickly come to appreciate quality original TV shows and movies. I know that this has definitely been the case with me and Netflix. When Netflix didn't have original programming it would have been much easier for me to cancel the service. But once I got hooked on shows like Daredevil, Peaky Blinders and Marco Polo, the very thought of cancelling Netflix became totally unacceptable.
So if Apple is going to eventually launch a competitor to Netflix and Amazon, it desperately needs its own original programming. And such programming is not quickly or easily created if it is going to be a quality offering. It takes a long time to create great new shows and bring them to viewers.
I hope that Apple understands this but I doubt that the company does. It's already years behind Amazon and Netflix when it comes to original programming. While those two companies leap ahead and continue to add new shows and more seasons of current shows to their respective content libraries, Apple has been spending its time negotiating with TV networks and cable TV channels.
Perhaps Apple is doing something quietly behind the scenes to lay the groundwork for the creation of original TV shows and movies. I really don't know, but it seems very clear right now that the company is facing two very formidable competitors in Netflix and Amazon. And the vast gulf in original content between the two companies and Apple is only going to grow as time goes by.
Apple still needs its own version of Netflix
Before Apple can really begin offering original TV shows and movies, it first needs to launch its own version of Netflix. Frankly, I'm somewhat surprised that Apple hasn't already done this. The company has been apparently hung up on launching a TV service that includes bundles of local and cable TV channels. But to me that is an outdated way of thinking at this point since many people think in terms of shows rather than channels these days.
Apple should focus like a laser beam on creating and launching its own version of Netflix. Netflix offers a huge range of TV shows and movies, and now has around 63 million subscribers. Clearly the customers of Netflix are pleased with the service since it keeps growing and growing.
And yet Apple has wasted enormous amounts of time trying to cut deals with the TV networks, local channels, cable TV, etc. And while the company dithers, Amazon and Netflix have both taken extremely aggressive steps to increase the quality and amount of their original programming, thus helping to lock in customers to both services by creating deep affinities for shows, characters and stories.
This is something that seems to have flown right over Apple's head. Who cares about local TV channels or even cable TV channels? Many people these days want quality TV shows and movies, without network censorship or filtering, and certainly without idiotic TV commercials intruding on the content.
So Apple really needs to get its version of Netflix out there door as soon as possible. The analyst Gene Munster thinks that an Apple video streaming service is coming in the fall, but everything I've seen about it seems to indicate that it's more of a replacement for cable and broadcast TV than it is a serious challenger to Netflix or Amazon.
Apple certainly has the money to make movies and TV shows
No discussion about original movie and TV programming can be complete without talking about money. In a nutshell, quality movies and television shows often cost a significant amount of money to produce. There's no getting around that, and it's a reality that even Apple has to face if it wants to jump into the market for original programming.
Fortunately, Apple is sitting on $190 billion dollars or so. Apple's cash hoard gives it an enormous amount of power in terms of funding original programming. In fact, the company has so much money that it dwarfs anything Amazon or Netlix has available to create original movies and TV shows.
But it remains to be seen if Apple will actually do much to create original programming with its vast horde of cash. Apple really needs to put the pedal to the metal and start creating its own library of original content. If it fails to do so it will be left behind by Netflix and Amazon in the streaming video market.
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