Why TV exclusives won’t do for Apple what they did for Amazon

More hit shows mean more Amazon Prime members which means more goods bought on Amazon.

Apple’s feedback loop won’t be as robust, says a venture capital partner at Andreessen Horowitz.

From a tweetstream posted early Tuesday by Benedict Evans:

Trying to work out whether any other tech platform company has potential for the same strategic leverage from content that Amazon now does.

The challenge for Apple is that device replacement decisions are probably too infrequent to be determined by hit shows.

You could cancel Prime any time: TV is a strong reason not to. But is a cool show last year a strong reason to buy iPhone v. Android now?

Posit: exclusive content gives no leverage if everyone does it. HBO alone was compelling but now if you cancel one service there are others

Music and books now have no strategic value to tech. TV seems to have it for Amazon, but for anyone else it seems just to be marketing.

6 Comments

  1. Richard Wanderman said:

    I’ve been an Amazon Prime subscriber since it was hatched and for me it’s always been about the shipping and even though I have a fire stick, it remains about the shipping. I’ve watched some content on Prime but I’d never join Prime just for the TV content. Netflix is a much better service and they overlap enough so I’d choose Netflix (which I use too).

    As John said the other day, Apple ought to keep it’s eye on being a platform company and leave content to others. If Planet of the Apps and Carpool Karaoke are what Apple content is going to be about, it’s not likely they’ll have a large subscription base.

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    July 11, 2017
  2. John Kirk said:

    Let me make this very clear — I really, really respect Benedict Evans’ opinions. However, I read this tweet storm too and I’m not quite sure I agree. Let’s see if I can break this down. I’ll quote Benedict and indicate where my thoughts differ from his:

    Trying to work out whether any other tech platform company has potential for the same strategic leverage from content that Amazon now does.

    The challenge for Apple is that device replacement decisions are probably too infrequent to be determined by hit shows.

    JOHN: I’m not quite sure that’s the right way to think of it. Evans is definitely correct that Apple’s focus should be on getting people to remain with the Apple ecosystem and to buy new Apple phones every 1, 2 or 3 years. I’m not a big fan of exclusive content, but exclusive content might be enough of an add-on to keep some people with the ecosystem. If so, it’s served it’s purpose.

    Posit: exclusive content gives no leverage if everyone does it. HBO alone was compelling but now if you cancel one service there are others

    JOHN: Hmm. Not sure I agree with this. HBO was selling itself. HBO exclusive content got people to watch HBO. Apple is selling hardware. Actually, Apple is selling an experience and using hardware sales to monetize that experience. Very different model from HBO.. So wth Apple, people buy a hardware ticket to enter Apple World. And if Apple World, like Disney World, has exclusive “rides”, that’s all well and good, right? But as I’ve pointed out before, Disney World has exclusive rides, but that’s not really what draws and keeps people at Disney. It’s the overall experience that matters. Same with Apple. In other words, Apple can enhance their brand wth an exclusive here and there. But it’s an add on, not the main draw.

    Music and books now have no strategic value to tech. TV seems to have it for Amazon, but for anyone else it seems just to be marketing.

    JOHN: Apple has been trying to break down TV for years. Actually decades. But, as we know, things degrade slowly at first and then very quickly. Cord cutting is a very real thing and the TV industry is about to go through a major upheaval. Whether Apple, with it’s Apple TV and apps approach, will be the winner, I don’t know. But Amazon and Apple are playing different games here. And the fact that Amazon, like Netflix, has decided to become another channel on Apple TV should be telling us that Apple’s platform approach may be the dog that wags the content tail, not the other way around.

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    July 11, 2017
    • CORRECTION: You were right, John. It was announced at WWDC in June (see below). I got confused because I don’t have it yet.

      – – – –

      JOHN: …”And the fact that Amazon, like Netflix, has decided to become another channel on Apple TV should be telling us that Apple’s platform approach may be the dog that wags the content tail, not the other way around.”

      PED: A rumor, not a fact, and one that surfaced in early May. What’s up with that, I wonder?

      From Recode, carefully hedged: “Amazon and Apple may have reached a truce.” https://www.recode.net/2017/5/5/15552954/amazon-video-apple-tv-app-jeff-bezos-tim-cook

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      July 11, 2017
      • John Kirk said:

        Ah, I thought that was a report, not a rumor. And I too was wondering why it hadn’t happened yet. Faulty analysis, based on faulty memory. My bad.

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        July 11, 2017
        • Jens Krueger said:

          PED, that was announced at wwdc. Weren’t you there?

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          July 11, 2017
          • Yes! I was! Thanks for reminding me. So it was an announcement. Better than a rumor. More than a report.

            Yet, we still don’t have it on our Apple TVs.

            1
            July 11, 2017

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