Akamai - leaderboard - 11-5-17
  • Apple Needs More Than Top-Notch Executives to Succeed in Video

    There was plenty of industry buzz last Friday after Apple announced that it had hired Sony Pictures Television’s presidents Zach Van Amburg and Jamie Erlicht to oversee video programming. After all, Apple has long been spinning its wheels in video, and so the hiring of two high profile producers with a string of TV successes (e.g. “Breaking Bad,” “The Crown,” “The Blacklist,” etc.) would appear to signal that the company has finally, belatedly, realized how strategic video is to its future.

    To be sure, it’s almost inconceivable that Van Amburg and Erlicht would take their talents (as LeBron would put it) to Apple without a guarantee from their new boss, and Apple media head, Eddy Cue, that the company was serious, at last, about making high quality TV shows. The problem for Van Amburg, Erlicht and most importantly Apple, is that to actually succeed, the company needs to do far more than just make great shows (which in itself is of course, far from a slam dunk).

    What Apple desperately needs is an overall video strategy and a viable business model for original programming that both leverages the company’s assets, but also fully recognizes the realities of how brutally competitive the video landscape has become.

    While Apple has been dithering over the years, periodically and unrealistically trying to induce TV networks to unbundle themselves, and more recently releasing “Planet of the Apps,” a “Shark Tank” copycat within its Apple Music service, big players have been carving out major chunks of the video market for themselves using innovative business models: Netflix (with inexpensive SVOD), YouTube (with highly targeted, efficient video advertising) and Amazon (with e-commerce enablement).

    Other powerhouses such as Facebook, Snapchat,  Hulu, Comcast, AT&T, Verizon and others are also investing heavily. There are now a record 450+ scripted originals being made, with more coming all the time.

    All of this means that Apple is facing a really high bar to identify a sustainable business model to support high-end original programming. The company doesn’t have a foothold in video advertising or SVOD (though it does have the Apple Music subscription service). And it has never really sought to bundle any services with its iPhones beyond creating the standalone App Store.

    Given all this, it’s totally unclear what mechanism Apple is going to use to actually drive an audience, much less a profit, for shows that Van Amburg and Erlicht will develop (assuming of course that Apple hasn’t hired them to create an in-house studio to produce shows for OTHER distributors, which would seem like a totally wacky move).

    It’s foolhardy to underestimate a company with Apple’s vast resources, but at the same time, given the competitive industry dynamics and Apple’s own position, the company’s video strategy is still quite murky. Hiring two fantastic producers is a significant start, but the question remains, to what?

     
  • IBM Cloud Video - full banner - 11-8-17

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