Saturday, June 17, 2017

Apple Doubling Down on TV

Apple announced Friday that it had poached Zach Van Amburg and Jamie Erlicht, two high powered TV executives, from Sony. Van Amburg and Erlicht are known most famously for their work on the hit series Breaking Bad and the preamble Better Call Saul that were tremendously successful for AMC and have since become a binge watching favorite on Netflix.

I found this move by Apple to be interesting as I did not foresee the hardware/software giant wishing to compete in such a crowded arena, where new competitors are popping up left and right. While Netflix is at the forefront of the market due to similarly significant investments in content, players like Amazon and Hulu continue to plug away as well, making Apple a bit late to the party. Nevertheless, the production business and live streaming will actually be accretive to Apple's P/e trading multiple, which I found to be very interesting. To my knowledge, Apple and Amazon do not do much in the way of advertising and drive the majority of revenue through subs. With that said, I think it will be interesting to see if Apple plans to employ a different model that leans more heavily on advertising, or chooses to differentiate itself based on its viewing platforms or, what Van Amburg and Erlicht were likely hired for, content.

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