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tv ? 2
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[Craig Seeman] “You won’t see it on Android. You’d have no problem installing iTunes on Windows though. So to the extent you’ll need iOS vs Android, yet that would be exclusive but Mac vs Windows, that won’t be. Sharing will be through iCloud of course.”
I don’t follow. Netflix is available for WebOS, iOS, Android, PS3, 360, Wii/Wii U, HDTVs, Bluray players, via browser support on OS X, Windows and (unofficially) Linux as well as various media boxes (Roku, Seagate, WD, etc.,). If Apple buys Netflix and turns it into an Apple-only service (iTunes and/or apple hardware) I don’t see all those Netflix users coming along for the ride. Netflix is available on nearly 800 different devices and over 50% of Netflix traffic goes to video game consoles. That’s a whole lof of user base to piss off especially with Amazon and Verizon/Redbox waiting in the wings.
https://gigaom.com/video/netflix-by-the-numbers/
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[Andrew Kimery] “I don’t follow”
Because you’re thinking about market share and Apple things about profits selling hardware.
[Andrew Kimery] “That’s a whole lof of user base to piss off especially with Amazon and Verizon/Redbox waiting in the wings.”
Netflix market share dwarves them all by huge amounts. Apple could lose a a huge chunk of that and still make money. In fact, it might be the only way (or at least an important way) for Apple to make money if they entered the HDTV market with an “exclusive” Netflix feature.
Under stand the “wings” are only as good as the contracts which give access to content. This is why the industry fears that Apple will do to Movies/TV what it did to the music industry with iTunes.
All this is speculative but if Apple is going to sell an HDTV in a flooded market and its goal is exclusive content to sell hardware, buying Netflix would be one way to do it. They’d love for every Windows computer with iTunes to buy either an iOS device or Apple HDTV (if they make such).
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[Craig Seeman] “Because you’re thinking about market share and Apple things about profits selling hardware.”
No, I am thinking about hardware sales and I don’t think Apple will sell a lot of hardware if their AppleTV ‘killer app’ is to buy Netflix, kill it, roll the former Netflix content into iTunes and launch their own Apple-branded subscription streaming service. Are all the customers that currently watch Netflix on non-Apple devices (which I’m going to guess is the vast majority of them) going to buy an Apple device and pay Apple a monthly fee to get back what Apple just took from them? I know everyone loves Apple right now but I just don’t see customers at large being happy and supportive that their once ubiquitous Netflix subscription is now an Apple only service.
I could see Apple paying big bucks for exclusive content and launching a Netflix rival service as a way to kick off a new and improved AppleTV but I don’t seem them acquiring Netflix and making it Apple only. I could also see making a refined voice and gesture based AppleTV that would let you just say, “I want to watch Breaking Bad” and Siri will respond, “Do you want to watch Breaking Bad using Netflix or Amazon?” Other devices, like the 360 w/Kinect, already let you search by voice and then choose which video service you want stream from but UI is Apple’s thing so I’m sure they will do what others have already done but a bit better.
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This started off with the question about a company closely tied to Apple, Disney, having a contract advantageous to Netflix.
Netflix dwarves everyone including iTunes video buy/rental as far as subscriber base. Apple’s main purpose in controlling content is to sell hardware. Again that does not mean having the biggest market share. Apple only needs a subset of the the Netflix customer base to increase sales on all their devices. Apple only needs the increase in sales to be greater than the cost of buying Netflix. If Netflix dominates with exclusive contracts, the customer options for “going elsewhere” will be limited. It has been fairly limited as it is. That’s why customers use Netflix. They have a HUGE library. Getting Disney is big. People will follow to retain their best movie selection.
Apple has not been able to secure the contracts to create a rival in the video buy/rental industry. That’s PRECISELY THEIR PROBLEM. Disney did NOT sign an exclusive with Apple and that has led to this speculation. Their only end run around that is by gaining control of those contracts buy purchasing the biggest company in that business.
Apple’s motive is to sell hardware. A company with close ties to Apple (Disney) signed a contract with Netflix, not iTunes. Connect the dots. What’s the benefit to Apple’s hardware sales? You seem to avoid the Disney connection to Apple in all your reasoning.
Apple doesn’t simply win through better UI. iOS wins because of greater App content (and better more income for developers because Apple users buy more), iOS wins because iTunes has the largest music selection. iOS wins because Apple sells hardware that runs iOS even though it doesn’t always have the dominant market share. Apple is NOT DOMINATING the video market, Netflix is though. If AppleTV and AppleHDTV (assuming they’re making one) is to be profitable it will ONLY be if Apple can dominate in content control as they have done with music.
You seem to be thinking about the customer. Apple’s thinking about selling hardware.
Maybe Disney’s move is meaningless. The alternative is that it would be setting up an Apple move and Apple is not about to provide a service to third party hardware. No way, no how, not with their business model. It will run on Windows because they’ll want Windows users to buy iOS devices (as they do with iTunes music) and/or buy AppleHDTV. I don’t see any viable way for Apple to make money in a commodity market like HDTVs with long buy cycles, unless Apple has control over content.
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On a somewhat related note:
TVBizwire
One Step Closer to ‘TV Everywhere’: Cox and Disney Ink Wide-Ranging Carriage Deal ReutersCox Communications and The Walt Disney Co. have reached a long-term carriage deal that expands options for watching Disney-owned networks both in and out of the home, reports Reuters.
Live and on-demand content from Disney networks, including ABC and ESPN, will be available to Cox customers through its pay TV service and on a range of devices, including gaming consoles and mobile phones, the story says.
The deal is part of the cable industry’s effort to achieve the goal of “TV Everywhere,” allowing viewers to watch what they want at different times and on various devices, the piece notes.
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and add to that
A&E, HISTORY, and Lifetime launch iPad apps with full episodes, additional content for Xfinity TV users
https://9to5mac.com/2012/12/13/ae-history-and-lifetime-launch-ipad-apps-with-full-episodes-additional-content-for-xfinity-tv-users/Xfinity is Comcast.
You don’t need an iOS devices as these apps will also be available on Android. You’re still encouraged to have cable (Comcast/Xfinity) to get access to additional content.
Basically all this is an example of why Apple can’t really make headway in video sales/rental on iTunes as a driver of iOS device sales. Do you think Apple is going to give up in this arena or might they be working on counter maneuvers?
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[Craig Seeman] “Apple has not been able to secure the contracts to create a rival in the video buy/rental industry. That’s PRECISELY THEIR PROBLEM. Disney did NOT sign an exclusive with Apple and that has led to this speculation. Their only end run around that is by gaining control of those contracts buy purchasing the biggest company in that business.”
Contracts are not necessarily transferable.
It’s very likely that Disney has the right to cancel the contract if Netflix is acquired, specifically to protect themselves against the situation you’re describing.
Walter Soyka
Principal & Designer at Keen Live
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
RenderBreak Blog – What I’m thinking when my workstation’s thinking
Creative Cow Forum Host: Live & Stage Events -
[Walter Soyka] “Contracts are not necessarily transferable.
It’s very likely that Disney has the right to cancel the contract if Netflix is acquired, specifically to protect themselves against the situation you’re describing.”
Specific to Disney is their relationship with Apple. I’m not sure what their position would be. Generally speaking, sure contracts are not necessarily transferable nor do we know which ones have such built in. Keep in mind the flux Netflix went with announcements about splitting the Optical Disc service into a separate business. Also they lost a big one with Starz.
There’s dealing with the “first release” contract stuff that goes to retail buy first, then disk rental and finally streaming. The last often being the furthest from the release of a movie for “Hollywood” movies. At the other end there’s the TV market.
Overall Apple’s video library is small, unlike their music library, so they’re going to have to get “aggressive” one way or another if content is to be the hook. I don’t doubt they’d try to expand their video library through acquisitions if direct negotiation with distributors is failing. I can’t assume one way or another on the contract state of the entire Netflix library. It just has to have enough that Apple can gain control of for it to be valuable. What “enough” is is anybody’s guess.
We don’t know how substantial their HDTV rumors are but I can’t even see looking in that direction unless Apple had a “content ace” up their sleeve.
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[Craig Seeman] “I can’t assume one way or another on the contract state of the entire Netflix library. It just has to have enough that Apple can gain control of for it to be valuable. What “enough” is is anybody’s guess.”
Honestly, I’d be shocked if any the distribution contracts were assignable. Otherwise, Studio A could simply buy Netflix and control Studio B’s streaming distribution against their will for the length of Studio B’s contract with Netflix. What’s in it for the studios to make Netflix so valuable by sacrificing downstream control of their streaming distribution rights?
Personally, I find it frustrating I have to “buy” multiple digital copies of media from different vendors to be able to watch it on different devices. As a consumer, I’m cheering for a hardware-independent digital distribution system.
Walter Soyka
Principal & Designer at Keen Live
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
RenderBreak Blog – What I’m thinking when my workstation’s thinking
Creative Cow Forum Host: Live & Stage Events -
[Walter Soyka] “Honestly, I’d be shocked if any the distribution contracts were assignable. Otherwise, Studio A could simply buy Netflix and control Studio B’s streaming distribution against their will for the length of Studio B’s contract with Netflix. What’s in it for the studios to make Netflix so valuable by sacrificing downstream control of their streaming distribution rights?”
I’m not sure the contracts for Optical Discs subscriptions are the same as for streaming. Notice the differences in content. It seems not all of their optical disc contract even becoming streaming available so far down the road in its life that the value has declined considerably. In fact I think this is part of Netflix’s dilemma. i don’t think you can lump them together. Neither did Netflix apparently. I understand part of the attempted split was the hope that they’d negotiate for better content on the streaming side.
In other words if Netflix were purchased it may mean a near complete loss of the optical disc catalogue. Given that Apple has some portion of that, they may really have an interest in the streaming catalogue to “bulk up” their iTunes offerings and give them an avenue to a subscription based service. Even if it means a renegotiation, if Apple feels they’d be in a much better position to negotiate it might be worth it to them.
[Walter Soyka] “Personally, I find it frustrating I have to “buy” multiple digital copies of media from different vendors to be able to watch it on different devices. As a consumer, I’m cheering for a hardware-independent digital distribution system.”
Which would seem to be opposite of Apple’s goals. You can get Netflix on virtually anything at the moment though. That’s about as hardware independent as I can imagine. That’s valuable to both Netflix and the Studio distributors. Apple will have to play hardball to get the Studio distributors to budge… and they may. Again though, keep in mind that Netflex streaming library is not their most valuable stuff. This has been Netflix’s problem as well.
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