Business Technology

Saturday 19 October 2019

Adrian Weckler: 'Can Apple make good movies?'

The launch of Apple TV+
The launch of Apple TV+
Adrian Weckler

Adrian Weckler

Why is Apple about to start making movies and TV shows? Can it really compete as a Hollywood studio against Disney, HBO and Netflix? Not to mention the BBC and RTE?

Last week, the company launched one of its most ambitious and unlikely projects yet. Apple TV+ is the name for its own original programmes and films.

Some of the stars in upcoming productions were on stage at the launch: Jennifer Aniston, Reese Witherspoon, Oprah Winfrey and Steven Spielberg, to name a few.

This wasn't the only launch. Apple also unveiled a new Apple credit card, a News+ subscription service and a subscription gaming service.

But the television content announcement was the most ambitious.

Having watched the entire presentation, one of the biggest questions is: why? Apple makes superbly-designed phones, computers, headphones and watches. It has decades of cutting edge-experience, inspired by the world's most iconic entrepreneur (Steve Jobs) and one of its most famous industrial designers (Jony Ives).

It knows what people want - sometimes before they know it themselves - and how to deliver it.

But what is Apple's similar instinct or expertise in programming? Can it stand apart in developing a comedy, a horror movie or a daily talk show the same way it does for tech hardware? Is this just about diversifying into new 'service' revenue streams because of plateauing iPhones sales? Or is there some deeper strategy at play?

Before looking more at that, I should provide a basic explainer as to exactly what Apple launched, as many commenting on this haven't actually bothered and it's actually a little confusing.

Apple+ is a new subscription service that will show original shows and movies made by Apple. But even though it's straying into Netflix territory, it's not technically a Netflix rival. This is because it won't have its own standalone app, nor will it include movies or programmes from other sources (like Netflix does). Instead, this Apple TV+ content will sit within Apple's existing 'TV' app, which also includes other channels.

Here's where it gets confusing for Irish Apple users: we don't currently get Apple's 'TV' app. It's not available in Ireland, or the majority of EU countries - just the US, Canada, Australia, Britain and a handful of other countries (10 in all).

But just so you know, it's a standalone app that gives access to a mixture of live channels and on-demand services. If you buy an iPhone or iPad in the UK, it comes preloaded. Its main advantage is that you can flick between different offerings quickly on your phone within a single app. However, its content choices are somewhat limited at the moment. For example, a British iPhone user gets to watch the BBC iPlayer, BBC News, ITV Hub and Amazon Prime Video as well as a handful of lesser-known channels. So it's missing an awful lot, including Sky, Netflix and other popular options.

The idea with this new Apple TV+ announcement is that you'll also now see these new Apple shows available within the TV app. Just to make it a little confusing, Apple also has a physical hardware product called 'Apple TV'. In Ireland, we know this as the small black set-top box that you plug into your telly to watch Netflix or iTunes movies.

Caught up on the basic services?

If so, one question is whether Apple will launch the service here. It looks very likely that it will, even if it can't negotiate rights for much else within the Irish TV app. After all, what's the point of spending $2bn on your own programming if you don't show it in as many territories as you can?

I estimate that we'll see a TV app with Apple+ and some version of RTE, possibly with a handful of smaller channels such as Bloomberg TV to fill it out. (Neither RTE or Apple is saying.)

Now back to the original question: why do this in the first place?

Yes, Apple has the money to take anyone on (it has some €250bn in cash).

Yes, iPhone sales have stopped growing, a predictable maturation.

Yes, we live in a business cycle where the market is constantly asking 'what's next'? But making movies?

I wouldn't discount Tim Cook's personal feelings on this subject. Watching him interact with Oprah Winfrey and other screen talent, he seemed genuinely moved. At one point during the extended proceedings, he choked up with tears of joy.

I don't know whether this is Tim Cook's baby or not. But it looks like it. And it is fair to say that he has earned the right to try it.

Not only has he achieved what many thought impossible - a thriving Apple after the untimely demise of Steve Jobs - but he has personally overseen the introduction of two hit products: the Apple Watch and AirPods. (For those who think these are not hits, look again: the Watch and the AirPods are everywhere, outselling the iPod.)

So the $2bn that Apple is currently spending on developing movies and TV shows is a tiny fraction of the added value that has been added to the company under Cook's tenure. If anyone deserves a shot at pivoting, it's him.

All of this, by the way, paints an increasingly challenging picture for what we used to call the main broadcasters in our lives.

In an age where Apple's $2bn programming budget makes it a minnow in an increasingly global on-demand TV landscape, where do conventional broadcasters like RTE and the BBC sit?

Is scripted drama, are film and comedy now to become mainly the domain of online, on-demand services while the likes of RTE and BBC is primarily used for sport, current affairs and talent shows?

And if those outlets can rely (at least) on state funding, what on earth happens to the likes of Virgin Media, Channel 4 and ITV?

Sunday Indo Business

Also in Business