Apple (NASDAQ:AAPL) Video Will Humiliate the Skeptics AgainDate Published: 2017-02-14
Updated 2-19-2017: Apple has released a trailer for its second show - an impossible to copy stake in the ground using the massive celebrity and talent already on Apple Music (trailer below).
Written by Ophir Gottlieb
Cord cutting is coming -- and Apple (NASDAQ:AAPL) is ready to disrupt the video world, with the added bonus -- to humiliate the skeptics again.
A revolution has already arrived with respect to video. Some estimates have us consuming 80% of our content from video by 2020. Facebook and Snapchat boast their numbers of over 10 billion video views a day. Alphabet Google's YouTube has more viewers aged 18-49 than any other broadcast or cable network in the United States -- and that's on mobile alone.
Average daily time spent with online video has grown from 35 minutes to over 70 minutes in a matter of years:
Even further, Netflix and Amazon have become absolute masters of the original content world -- producing their own shows, winning Emmys and now, for the first time ever, Amazon has an original feature film that has been nominated for six Oscars.
But the real question everyone wants answered is -- where is Apple?
By now we all know the story for Apple (NASDAQ:AAPL) -- turn its hardware heavy business, namely the iPhone, into a Service heavy business, which has the benefit of recurring revenue rather than one-time revenue from a phone (or Mac) sale. Apple Services include the App Store, iTunes, Apple Music, Apple Pay and iCloud.
Apple Services has hit lift-off trajectory, reporting over $7 billion in sales in the latest quarter and well on its way to being the size of a Fortune 100 company on its own by the end of this year per CEO Tim Cook. Here's a quick look at the revenue trend rolled up into a 4-quarter moving average:
Source: Six Colors
Even more impressive was Apple (NASDAQ:AAPL) CEO Tim Cook stating that he intends to double Services revenue by 2020. Here's what he said:
While the App Store and Apple Music have been pushing growth in Services, it's time for Apple to look at video -- but that will come inside the Apple Music subscription. On January 12th, CML Pro reported Apple Goes After Video - Yeah It Really Matters. From that dossier we got this:
And just a few days ago, we see the Apple (NASDAQ:AAPL) first trailer for its first original show, called "Planet of the Apps." While the general reception has been negative by skeptics, that's because people have no idea what they're talking about, really. In fact, it's actually fun to relive the skeptics' reviews. Not fun -- hilarious.
Appl Inc. (NASDAQ;AAPL) has now released its second trailer and it has put a stake in the ground -- using the talent and celebrity that is already on Apple Music to make an impossible to copy show, called "Carpool Karaoke." This is a stake in the ground -- and Amazon, Netlfix, and Google have no response to Apple's moat with respect to celebrity.
Here is the trailer:
There was (and still is) hope that Apple (NASDAQ:AAPL) would step into original content with some hard hitting dramas like the famed "House of Cards" from Netflix and various other gorgeous fictional narratives. Apple (NASDAQ:AAPL) will do that. But for now, it's getting into reality TV -- with a twist. Its original content is for its App Store.
Apple is doing what it always does -- giving people what they want, not what they need and there simply has never been a better company ever that has delivered to want better than Apple. But there's more.
Bloomberg reported that Apple hired the former director of Amazon's Fire TV business to head up Apple TV marketing.
While the Apple TV will be the hardware conduit for this new content -- this is about service revenue. We're talking a monthly subscription, like Netflix, and access to content.
We can doubt Apple Inc -- we can laugh at how late the firm is and listen to skeptics, or we can remember that Apple is almost never the first to market. Blackberry was a giant as 60 million smartphones were sold in 2006, the year before iPhone. Now Apple sells 200 million phones a year and the market bears 1.2 billion a year.
There has always been cacophonous sneering from skeptics at Apple. Matthew Lynn of Bloomberg now infamously known as "that guy" said, and we quote:
But you know what, others made similar comments, and other products were also laughed it. Try these "reviews:"
Friends, we don't know if Apple Inc will succeed with video, but we do know that everyone doubting it is pretty much par for the course.
The author is long shares of Apple (NASDAQ:AAPL) at the time of this writing.
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