If the rumor mills are to be believed, Apple is all set to announce the long-awaited streaming video service next month. And as per the latest report, the streaming service is expected to cost $15/monthly.
While many think that Apple’s new venture will be a big hit, Jefferies analyst Tim O’Shea has a different view. O’Shea asserts that the road ahead for Cupertino-based company will not be smooth sailing.
Road Ahead Of Apple’s Streaming Video Service Seems to Full Of Challenges
The analyst says that there are two ways to succeed in the streaming video service sector. While one way is to create original and unique content pretty much like Netflix, the other is to have access to the popular content from the big studios and networks.
O’Shea stresses that the tech giant currently doesn’t seem to be perfectly poised to accomplish any of these two pivotal things.
“Apple’s spending a fraction of what Netflix is spending on original shows and movies, meaning that at least at first it will likely be far more dependent than the streaming video giant on third-party content. But the company’s plans to take a 30% cut on revenue may not sit well with many Hollywood studios and networks. It’s hard to see how those economics fly,” O’Shea said.
However, the analyst thinks that Apple does have the resources to lead the streaming video service industry, thanks to the ever-reliable ecosystem and the massive install base.
But even if the tech giant succeeds in amassing 250 million users by 2023, the service would still be able to generate just 5% of its total revenue. That means it won’t be able to deliver the kind of money that its iPhones have yielded over the years.
Only Time Will Tell Whether Or Not Apple Succeeds in Ruling The Roost…
As of now, all I can say is that it’s going to be extremely challenging for Apple to become a noted player in the streaming video streaming. Of course, it does have both the manpower and the billions of bucks to turn the tide in its favor.
But only time will tell whether the tech giant takes away the crown from Netflix, which boasts an enviable 139 million users or fail to live up to the expectation.
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