Why Apple should make its own TV shows, just like Netflix

March 22, 2014
March 22, 2014

Netflix is doing it. So is Sony. And Yahoo. Even Amazon is getting in on the act. Microsoft has been doing it for years. Acquiring or producing exclusive content, that is.

Now, as it confronts slowing growth in the sales of its devices, maybe it’s something Apple should consider as well.

That’s the view of Macquarie Equities, which became the 63rd research house to cover the world’s biggest company this week. And why not? Apple’s mountain of cash is still sky high, it is being criticized for not innovating enough, and it’s an organization that’s not uncomfortable with the concept of exclusivity: The iOS ecosystem is often described, usually disparagingly, as a “walled garden” and Apple’s closed source software is by definition exclusive.

Here are Macquarie’s thoughts on the matter:

We believe that Apple would benefit from the deployment of some of its considerable cash balance toward securing exclusive media content. In our 15 years of covering the interactive entertainment space, we have frequently observed the value that can be generated through high-quality, desirable content that is exclusive to a platform (the original Xbox is a classic example of this, with early-stage growth driven in large part by the popularity of Halo). We think just one or two key exclusives could be very helpful in establishing new products and extending iOS’s reach.

Exclusivity can be a powerful force. Netflix has attributed much of its impressive user growth to its original series like House of Cards and Orange is the New Black. Closer to Apple’s home, wireless carrier AT&T experienced a record lift in users when it was the only US carrier to offer early versions of the iPhone.

There are already reports that, as sales on iTunes dwindle, Apple is trying to convince record companies to provide it with music that only it may sell. It has dabbled in this before with its “iTunes Originals” series of albums last decade, and more recently, the iTunes Festival at SXSW earlier this month.

But now might be the perfect time for a bigger splash. There are widespread rumors that the next version of the Apple TV box might also work as a games console. As Macquarie points out, 82% of the money spent on Google Play and in the iOs App Store now goes on games, suggesting an exclusive game could draw in lots of customers.

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Alternatively, with a new golden age of television upon us, and American appetite for the medium as strong as ever, what better way for Apple to launch an updated Apple TV box (or even the long rumored Apple television set) than with an exclusive show? Of course, there’s no suggestion the company is even contemplating this, but if it ever did, Apple’s ruthless obsession with quality means it would probably be worth watching.

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