Following the sale of MGM to Amazon, there is considerable industry speculation that other major players without standout streaming services might follow suit. Apple is an interesting case since it does have its own streamer, Apple TV+, but it doesn’t compete in the same league as the likes of Netflix, Amazon Prime Video, Hulu, or Disney+. The Hollywood Reporter examined the current state of Apple’s entertainment foothold and why it might be smart to purchase a studio of its own.
Apple TV+ launched in November 2019 and has already offered up a number of well-received, award-winning programs including Ted Lasso and The Morning Show, part of what Apple CEO Tim Cook attributes to its aim “to be one of the most desired platforms for storytellers.” Despite that, an April report from Morgan Stanley indicated that subscription figures are much lower for Apple TV+, around 8 percent of respondents, compared with Netflix (58%), Amazon Prime (45%), and Disney+ (31%).
Wedbush analyst Dan Ives explained that “Apple has made a major strategic mistake not buying a Hollywood studio while Amazon, Disney, Netflix and others run away with content. Content is king, and Apple built a mansion with hardly any furniture in it. MGM was a no-brainer acquisition for Apple, and they missed a huge opportunity. Apple and Amazon are unique among tech giants, insofar as they each have streaming services, so there are synergies in owning content libraries.”
Over the Memorial Day holiday weekend, Apple offered up numerous titles for $10 or less, including Mad Max: Fury Road, Ready Player One, Crazy Rich Asians, and The Hangover. While the promotion may entice subscribers, the film content on Apple TV+ doesn’t compare to what its top competitors currently have. Gaining access to the libraries on Lionsgate or another studio that has been speculated as open to acquisition would give it a bigger edge.
Overall, Apple is still wildly successful, with 660 million paid subscribers and revenue of more than $16.9 billion in the first quarter of 2021, up from $13.3 billion one year ago. In addition to Apple TV+, its top businesses include the iPhone, Apple Music, the App Store, and iCloud.