Yesterday reports emerged that Apple plans to spend $1 billion to both procure and commission its own TV content over the next year or so, according to the Wall Street Journal. Whilst such a move would certainly count as Apple putting a flag in the ground, it’s a relatively small flag. As many commentators have been quick to point out, a $1 billion annual budget by Apple hardly impressive when you consider what the competition are spending:
- Netflix: $7 billion per year
- Amazon: $4-5 billion per year
- HBO: approximately $2 billion per year
And $1 billion wouldn’t even scratch the surface in other TV areas like sports. Even if you just look at the UK market alone, in 2015 BT and Sky paid £5.4 billion for UK rights to show Premiership football for three years, which works out at £1.8 billion per year. Again, that’s just for UK football rights, nothing else.
So what is Apple planning? Is it really going to enter the OTT market with a half-hearted app with just a fraction of the content available on other services? en the Apple fanboys might .
One strong possibility is that the content will be used as a beachhead/USP for Apple products. The obvious contender on that front would be Apple TV, Apple’s OTT device. But for an already-successful product with a £139 price point, spending $1 billion on content would only provide a relatively Apple with a limited and exceptionally expensive edge over other devices like Roku and Google’s Chromecast.
A more interesting play would be the launch of an Apple TV set, even if the company is thought to have shelved those plans in 2014, after the company struggled to find new features that would make an Apple TV set stand out from the crowd.
However, given the importance of the TV in the connected home, acting as a visual hub for various ancillary services, it seems unlikely that a company with Apple’s resources would shelve those plans completely.
Coincidentally, rumours (completely unsubstantiated rumours we should add) resurfaced today, complete with blurry photos from someone on Weibo, a Chinese microblogging surface, which they say are thought to be of a prototype Apple TV in a testing environment.
These ‘spy’ photos of various Apple products surface regularly and should always be taken with a big pinch of salt, but considering it has taken Apple suspiciously long to make a move into the OTT content space, at the very least it’s fun to speculate that perhaps there’s a link between the TV set and content deals re-emerging at the same time.
Here are some of the photos that were posted: