From “BTIG Eleven” Media Thoughts for July 2017 by media analyst Richard Greenfield.
5) Will Apple Music Be the Next Bundle? Whether or not you believe the recent Recode article (link) that states Amazon Prime is now at 79 million domestic subscribers, there is no doubt the number is very large and well over 60 million in the US alone. In turn, we are increasingly confident that Amazon Prime will have more subscribers than any US basic cable network over the course of the next few years (cable networks losing subs and Amazon growing subs rapidly). Amazon keeps adding value to the Prime bundle itself (spending over $4 billion on video content, catalog music, free 2-day shipping, etc) and at the same time looking to leverage that existing Prime relationship to push subscribers to add additional subscription products such as HBO, Showtime, Amazon Music Unlimited, Sling, etc.
Now think of Apple, where iTunes music and video sales are facing increased competition (link), whereas their subscription music business, Apple Music, has already grown to over 27 million subscribers. To supplement the music offering, Apple has recently added video content. Whether or not you consider Planet of the Apps a successful start in original video programming, we believe Apple’s ambitions to build a content business are far larger (see our June 16th blog, link, on their hiring of two senior Sony Television execs). With Apple making their video content available within Apple Music solely for subscribers, we cannot help but think that Apple sees the power of Amazon’s bundle and wants to create their own bundle of products and services (music, video, could iCloud be next?, what else?). Maybe it should be renamed Apple Media or Apple Prime.
Five out of eleven ain’t bad.
Below: Greenfield putting Eddy Cue on the spot at Code 2017 (at 56 min. point).