Why Apple TV+ is Hollywood’s most intriguing streaming service
Two surprise hits stole the show at Sunday night’s Oscars—one with actual implications for the tech world.
As social media buzzed about the slap heard ‘round-the-world, Apple TV+ became the first streaming service to win the Oscars’ top prize, taking home the best picture award for the poignant coming-of-age story CODA.
The victory offers yet more evidence that the traditional walls between theatrical releases and streaming debuts are quickly crumbling, setting off a new era in the medium. But it also provides a moment to reflect on a question that has been lingering over Hollywood for nearly three years: What is the raison d’être for Apple TV+?
Launched in late 2019, Apple TV+ arrived to the streaming wars fashionably late. Skeptics fairly pointed out that Apple lacked any kind of content library or promising intellectual property. Industry insiders questioned whether Apple understood the production landscape.
Those concerns still bedevil Apple to some degree. Apple doesn’t report subscriber numbers, but available estimates suggest the service totals roughly 20 million to 25 million paid subscribers globally, well behind Netflix, Amazon Prime Video, and HBO Max. It lacks a massive hit with franchise potential (like Disney’s Star Wars or Netflix’s Stranger Things) and older, rewatchable shows (HBO Max’s Friends or Peacock’s The Office).
And yet, Apple seems perfectly content with its current approach: methodically building a platform with really good highbrow movies and TV.
With CODA, Apple earned the buzz that comes with winning three high-visibility Oscars (for picture, adapted screenplay, and supporting actor). On the silver screen, the winsome Ted Lasso earned seven Emmy awards in 2021, including best comedy.
Several other Apple shows and movies drew rave reviews over the past few years: the insightful political documentary Boys State; the dystopian workplace thriller Severance; the charming workplace dramedy Acapulco; and Joel Coen’s black-and-white Shakespearean take The Tragedy of Macbeth. Even series with the potential to skew traditional, such as the video game-office comedy Mythic Quest and the murder whodunit The Afterparty, take ambitious swings that defy convention.
These plaudits, of course, don’t add up to mainstream commercial success. As an old Teamster used to tell my dad on the loading dock: “You can’t eat that sonofabitch.” (Translation: titles and compliments don’t pay the bills.)
While Apple doesn’t report the financials of its streaming service, available media reports suggest Apple TV+ has lost at least a couple billion dollars since launching. Apple can withstand such losses given its $95 billion in fiscal 2021 net income, largely thanks to iPhone sales and App Store revenues. For now, Apple CEO Tim Cook seems nonplussed about his streaming service’s bottom line.
“We don’t make purely financial decisions about the content,” Cook said in a January earnings call. “We try to find great content that has a reason for being. And we love shows like Ted Lasso and several of the other shows, as well, that have a reason for existing and may have a good message and may make people feel better at the end of it.”
Perhaps Cook and company are satisfied with their streaming service as a vanity project of sorts, using it as a way to build customer loyalty. The prestigious tenor of its shows and movies fits snugly within the company’s high-end brand.
Or maybe the folks in Cupertino are simply playing a long game, betting that their meticulously assembled platform will slowly overtake rivals struggling under the weight of shareholder-driven pressure for immediate profits (looking at you, Netflix).
Interestingly, The Information reported in September that Apple “sees its video entertainment service as a stand-alone business, not as a way to peddle more Apple hardware, according to a person familiar with the situation.” (Apple TV+ is part of the company’s service bundle, Apple One, which also includes fitness, games, and cloud storage products.)
True to form, the notoriously secret Apple isn’t divulging its ultimate ambitions for Apple TV+. Instead, the company’s actions over the next several years—corporate acquisitions, intellectual property purchases, investment in original content and marketing—will show Apple’s true appetite for streaming.
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A double split. Tesla shares jumped 8% in midday trading Monday after disclosing plans for a stock split likely aimed at increasing retail investor interest and enabling a stock dividend. In a Securities and Exchange Commission filing, Tesla said it will seek approval at its annual shareholder meeting to split its stock, which has hovered around $800 to $1,200 per share in the past several months. Tesla carried out a five-to-one stock split in August 2020, hoping to make the equity “more accessible” to investors. The company has not set a date for its annual shareholder meeting.
Scaling back. Apple plans to cut its iPhone SE production target by about 20% in the next quarter as the war in Ukraine and inflation pressures weigh on consumer demand, Nikkei Asia reported Monday, citing sources familiar with the matter. Apple still plans to produce about 3 million of its iPhone SE, a budget 5G-enabled device that retails at $429 following its debut earlier this month. Nikkei Asia also reported that Apple trimmed its full-year AirPods production target by about 10 million for similar reasons. Apple shares were unchanged in mid-day trading Monday.
Feeling the pain. Huawei saw a 29% year-over-year decline in revenue in 2021, largely due to the impact of U.S. sanctions on the Chinese telecommunications giant, but the company managed to boost its profitability through cost-cutting, CNBC reported Monday. Huawei reported about $99.9 billion in revenue last year, down from $139.9 billion in 2020, as the sanctions combined with supply chain constraints and underwhelming demand for 5G service in China. Still, Huawei posted a 76% year-over-year increase in net profit, which totaled $17.4 billion.
Poly gone. HP has agreed to buy Poly, a phone headset and audio-video equipment vendor, in a $3.2-billion, all-cash deal designed to help the computer hardware producer respond to the work-from-home movement, Bloomberg reported Monday. Poly shareholders will receive $40 per share, about 50% above the company’s closing price Friday, under terms of the acquisition. HP and Poly saw demand for their products surge following the pandemic’s onset, though Poly has struggled in recent months with supply chain challenges. HP shares were down 4% and Poly shares jumped 50% in mid-day trading Monday.
FOOD FOR THOUGHT
A Scandinavian secret. The Ukrainian invasion has exposed the deep business ties between countless countries and the authoritarian Russian regime. The latest company under the spotlight: Nokia. The New York Times, citing newly obtained documents, reported Monday that the Finnish electronics company has provided the Russian government with the equipment and software needed to facilitate widespread surveillance of President Vladimir Putin’s enemies. While Nokia products don’t directly help Russia spy on dissidents, the records show company officials helped connect the country’s surveillance systems to its largest telecommunications provider. In turn, Russian agents could listen to phone calls, intercept emails, and monitor other communications.
From the article:
The documents, spanning 2008 to 2017, show in previously unreported detail that Nokia knew it was enabling a Russian surveillance system.
The work was essential for Nokia to do business in Russia, where it had become a top supplier of equipment and services to various telecommunications customers to help their networks function. The business yielded hundreds of millions of dollars in annual revenue, even as Mr. Putin became more belligerent abroad and more controlling at home.
IN CASE YOU MISSED IT
Elon Musk says he has COVID-19 again, by Chris Morris
Ex-Google AI skeptic Timnit Gebru starts anew | Insider Q&A, by The Associated Press
Crypto aid for Ukraine: Innovation or just a sideshow?, by The Associated Press
BEFORE YOU GO
Sorry, McLovin. The days of defiant teens throwing booze-filled ragers while the parents are away might be numbered. As The Information cheekily reports, the proliferation of home monitoring technology and location-tracking apps are making it harder than ever for kids to get away with unsanctioned house parties. As one Texas teen told the outlet: “Superbad would not be possible today.” In a delicious twist, some bitter youths retaliated by starting a viral TikTok campaign to bombard a tracking app with one-star reviews. Revenge of the non-nerds, I suppose.
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