How Ap­ple can es­tab­lish its new video ser­vice

A lot needs to hap­pen be­fore you can start stream­ing orig­i­nal pro­grammes to your Ap­ple de­vice, re­veals Ja­son Snell

Macworld - - Contents -

It’s clear that Ap­ple is build­ing a video ser­vice. That much was ob­vi­ous the mo­ment it hired vet­eran en­ter­tain­ment ex­ec­u­tives Zack van Am­burg and Jamie Er­licht. But you can’t flip a switch and cre­ate a stream­ing ser­vice – not even if you’re Ap­ple. (You could buy one, but Ap­ple has ap­par­ently cho­sen to build, not buy, at least for now.)

What has to hap­pen be­tween now and the day we all sit down and watch the first episode of van

Am­burg and Er­licht’s first ma­jor ac­qui­si­tion to play through our Ap­ple TVS or on our ipads and iphones?

Make the deals

Ap­ple hired van Am­burg and Er­licht away from Sony be­cause they’re well-re­spected ex­ec­u­tives with great con­nec­tions. (Ap­ple has since hired sev­eral other im­pres­sive ex­ecs from pro­duc­tion com­pa­nies and Ama­zon and the BBC.) Af­ter a quiet pe­riod as the team was as­sem­bled, Ap­ple has be­come in­volved in the bid­ding on nu­mer­ous ma­jor TV projects. Mac­world has com­piled a list of all the Ap­ple deals sealed so far, but they in­clude high-pro­file pacts with well-known pro­duc­ers, writ­ers, and stars. Re­ports sug­gest Ap­ple’s con­tent bud­get for 2018 is as much as $1 bil­lion, and it could grow at a rapid rate.

TV takes a long, long time to make. Ap­ple is short-cir­cuit­ing part of the usual de­vel­op­ment process by or­der­ing its shows ‘straight to se­ries’. Tra­di­tion­ally in tele­vi­sion a sam­ple episode, called a pilot, would be pro­duced be­fore an en­tire sea­son would be or­dered. By­pass­ing the pilot isn’t quite the same as buy­ing a show sight un­seen – pre­sum­ably Ap­ple has seen pitch doc­u­ments and po­ten­tially even a few scripts, and will give in­put on cast­ing and other creative de­ci­sions along the way – but the com­pany saves sev­eral months by by­pass­ing the pilot process and buy­ing en­tire sea­sons of se­ries up front.

So pro­duc­tion on these shows is start­ing to crank up, with stars like Reese Wither­spoon,

Jen­nifer Anis­ton, and Oc­tavia Spencer, and cre­ators like Ronald D. Moore, Steven Spiel­berg, and Bryan Fuller signed up. (Ap­ple’s also ap­par­ently bid­ding with HBO for the next J.J. Abrams project.) The ques­tion is, where will they go when they ar­rive?

Build a cus­tomer base

Any new video sub­scrip­tion ser­vice starts with zero cus­tomers and has to build from there – un­less they can find a way to get a leg up, like Net­flix (with its pre-ex­ist­ing DVD busi­ness) and Ama­zon (with its ex­ist­ing Prime ser­vice) did. I have a hard time be­liev­ing Ap­ple won’t charge ex­tra for its video ser­vice, but it’s pos­si­ble that it could repur­pose ex­ist­ing Ap­ple Mu­sic sub­scrip­tions.

It seems more likely that Ap­ple would start off with a free trial of­fer, as it did with Ap­ple Mu­sic, with the hope of build­ing its cus­tomer base that way.

And of course, every Ap­ple de­vice is part of Ap­ple’s cus­tomer base – so if ev­ery­one who owns an iphone, ipad, Ap­ple TV, or Mac got in­stant ac­cess to Ap­ple’s new shows (for a lim­ited time), that would be a quick way to build a sub­scriber file.

The other way to build a cus­tomer base quickly would be to buy out one or more ex­ist­ing stream­ing ser­vices. Again, the hir­ing of van Am­burg and

Er­licht sug­gests Ap­ple’s de­cided against this for now, but it’s not im­pos­si­ble that it could swoop in and buy a smaller ser­vice out be­fore it launches.

Build a stream­ing in­fra­struc­ture

Send­ing HD video to mil­lions of cus­tomers re­quires a pretty so­phis­ti­cated stream­ing in­fra­struc­ture. While icloud has cer­tainly had its shaky mo­ments from time to time, Ap­ple is a tech com­pany that’s been learn­ing about this stuff for a while now, and itunes streams an aw­ful lot of video al­ready.

Con­trast that with a ser­vice like CBS All Ac­cess, which had some ma­jor prob­lems with its con­tent­de­liv­ery net­work, or CDN, dur­ing an early episode of Star Trek: Dis­cov­ery. It takes a lot of tech­ni­cal ex­per­tise to run a stream­ing ser­vice, which is one rea­son Dis­ney in­vested so heav­ily in BAMTECH, a spin-off from Ma­jor League Base­ball widely thought to be a leader in stream­ing tech.

One type of con­tent Ap­ple hasn’t yet been linked to is live sports, which seems to be the hardest job

in stream­ing. Pre-recorded shows such as Game of Thrones can be pre­loaded across a CDN in ad­vance of re­lease, thereby spread­ing the net­work load – but live sports have to be trans­mit­ted in real time, and un­der a huge load, the streams still fail. Ask any­one who tried to watch the na­tional foot­ball cham­pi­onship on ESPN ear­lier this month.

Find a means of dis­tri­bu­tion

Net­flix got its stream­ing ser­vice em­bed­ded in just about every In­ter­net-ca­pa­ble de­vice in ex­is­tence. Ama­zon’s done much the same. Ap­ple, of course, comes with its own home-field ad­van­tage: the TV app on every iphone, ipad, and Ap­ple TV out there. Prob­lem solved.

Will Ap­ple of­fer its video ser­vice on other de­vices? It’s pos­si­ble, but it sure seems un­likely. The point of Ap­ple’s video ser­vice is to ex­pand ser­vices rev­enue – but it’s also to ac­crue more value to­ward Ap­ple’s hard­ware of­fer­ings.

Get the prod­uct out there

It seems un­likely that any of the se­ries Ap­ple has al­ready bought will be ready be­fore late this year. It takes time to assem­ble a writ­ing and pro­duc­tion staff, write, cast, shoot, and edit. Au­tumn 2018 seems like the ear­li­est an Ap­ple TV ser­vice could pre­miere, and even that feels like push­ing it.

But it’s def­i­nitely hap­pen­ing. An Ap­ple video ser­vice is in our fu­ture, with a bunch of shows from peo­ple you know, who have cre­ated stuff you’ve loved in the past. Will the shows Ap­ple is buy­ing

now be good enough to drive sub­scrip­tions to yet an­other video stream­ing ser­vice, when there’s al­ready a lot of sub­scrip­tion fa­tigue out there?

These are ques­tions for late 2018, or quite pos­si­bly for 2019. But the shows them­selves are on their way.

Ap­ple has or­dered a se­ries star­ring Reese Wither­spoon and Jen­nifer Anis­ton

Could Ap­ple of­fer its stream­ing video ser­vice out­side of its own de­vices? It’s pos­si­ble, but it seems un­likely

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