Arch Rivals Go Over the Top
You’ve got to take your hat off to Reed Hastings, co-founder and CEO of Netflix. Talk about bucking the trend – in 2007 Netflix had 6m subscribers with their biggest rival being Blockbusters. Back in those days DVD’s were mailed out and the thought of live streaming a movie to your phone via the internet was, to many, inconceivable. Investors were alarmed by the fact that only 1,000 films were on the network, and at the time the market seemed microscopic. Now Netflix is worth $138bn with 117m subscribers and predicted to spend more than $8bn on its own shows this year, including 80 original films. In contrast, Britain’s biggest paid TV provider Sky has lost 500,000 subscribers since 2014. During that same period, Netflix has increased by 5m subscribers.
The Sunday Times Business (18th March 2018) said “The living room telly – an impregnable citadel for advertisers, studios and networks since the 1950s is under assault. Apple, which has already upended the phone, music and computer industries, reckons it can step into the breach.”
To do this effectively, Apple has to battle not only Netflix but the other subscription-based OTT (or over-the-top) platforms including arch rival Amazon. However Apple is no slouch, with a $5bn a year investment in original and licensed programming, including its $250m bid last year to snap up the rights to a Lord of the Rings series. The prime objective for both Apple and Netflix is subscription growth, with the former’s most viable revenue generator being services (Apple Music, Apple Pay and iCloud) as opposed to laptops.
However, in this regard, it’s not all been plain sailing for Apple, with their new show Planet Of The Apps being savagely panned as “a bland, tepid, barely competent knockoff of Shark Tank (America’s version of Dragon’s Den). Yet, it would be a mistake to discount their determination and zeal; certainly a few flops and a couple of billion dollars aren’t going to hold back their zeal for the prize.
Entertainingly, current media pariah Facebook were poised to spend a purported $1bn per annum on original content, complete with former Hollywood executive Ryan Murphy manacled to the fray. In light of recent events, it will be intriguing to see how the chips fall.
Head of Broadcast