Gene Munster, Loup Ventures:
At the helm of the company’s content efforts are Jamie Erlicht and Zack Van Amburg, who Apple hired away from Sony in 2017. Erlicht and Van Amburg ran Sony’s primetime series division since 2005. They will report directly to Eddie Cue, who runs Apple’s Services business. Apple has also hired an array of industry veterans from a range of backgrounds including streaming platforms like Hulu and Amazon Studios, and mainstay media companies like WGN America and Legendary Entertainment.
Nice rollup of Apple’s content efforts to date. Amazing to see it all together like this.
And this comparison with Netflix:
At first glance, it appears Netflix’s lead in original content is insurmountable. Netflix will end 2018 with close to 1,000 original titles and spend an estimated $3.5 billion on new titles this year. Keep in mind that almost half of that content is outside of the U.S. That compares to Apple, which has 2 titles out today and another 16 in the works (to be released in 2019 at the earliest), expecting to spend about $900 million this year.
But:
However, history is on Apple’s side, given that just five years ago Netflix had 13 original titles including the debut season of House of Cards. In other words, with the right resources, which Apple has, Apple’s original content titles can ramp from just under two dozen to potentially over one hundred. We note that Apple has stated they are focused on quality vs. quantity.
To me, that last is the key. Can Apple figure out how to deliver the quality? If I was looking at a model for how to do this, I would start with Netflix, but then move on to HBO. Netflix has plenty of swings and misses, HBO less so. If I was on the Apple team, I’d be asking the question, “What is HBO’s secret sauce?”
If you review the series archive in HBO Go you’ll see lots of misses as well. Nothing like the vast quantity of crap on Netflix, of course, but still the hits are few compared to the rest.
Who is the person from Apple’s senior management that has the experience or the skills to undertake the creation of new content? I don’t think that I know who has ever done this so it seems to me like there is significant distance between top management and this business unit.
It really isn’t a volume game except to the extent that Apple needs to deliver a set of video entertainment that can justify a subscription. I don’t care about most of what Netflix has… but I care about enough of it that it’s worth the ~$10/month. Same for Hulu. However, something like the CBS streaming plan isn’t worth it to me even though I’d like to see the new Star Trek show because that’s the only show I want to see on that plan.
There’s no secret sauce. HBO and Netflix both produce hits and misses. There is no company that is able to produce nothing but hits in the world of video entertainment.
All creative industries suffer from a fundamental problem – creators are not machines. Some creators are consistently bad, some are more often good than bad, but every single one sometimes produces something bad. And most creators are too close to their work to judge accurately whether or not it is any good, when they have a hot idea and when they have a rotten one. On the other hand, producers and studio executives have no creative talent and no sense of when a story is working and when it’s going off the rails. So the people with the money making decisions about what projects to fund and what projects to pass on are even less qualified to tell when something is good or not than the original creators. Thus you get the situation of Sturgeon’s law (90% of all creative work is crap).
You can certainly produce work that takes a good idea and ruins it with underfunded, shoddy execution. Cheapening out or rushing on a production, or settling for second rate directors/actors when your first choices are unavailable, are very common ways to get a crappy show out of a golden idea. On the other hand, no amount of care and money and talent can turn a turd of an idea into a hit.
Video entertainment is a group endeavour, which makes replicating success even harder. Some creative teams produce superb shows. But you can’t head hunt the team leaders for your own project and get results nearly as great, because it’s not a roster of individual people responsible for a hit show but the cooperation and interfacing of all the members of the organization, and moreover the organization’s unreproducible group culture. Production houses are ephemeral and temporary constructs, and they are the real creators whose quality we measure when we say that one show is great and another one is meh.
All of which is a long winded way of saying I am extremely skeptical that Apple will be able to achieve a better batting average than any of the other major studios responsible for creating shows these days.
If Planet of the Apps is any indiction of what Apple thinks is quality… Ugh.