I’ve long argued that Apple, Inc. (NASDAQ:AAPL) should move into original programming. Back in Jan., I wrote that the time was ripe for Apple to get moving. At the same time, the WSJ reported, Apple stock had “been in talks with veteran producers in recent months about buying rights to scripted television programs. It also has approached experienced marketing executives at studios and networks to discuss hiring them to promote its content…and hope to start offering original scripted content by the end of 2017.”
We got the official announcement a couple of weeks ago from AAPL: the company will invest a billion dollars in original content.
Now, let me parse this for you in ways few other people can, since I was in Hollywood for 12 years. Apple stock is going to benefit from this move, because AAPL made the right choices in people to run its video business: Jamie Erlicht and Zack Van Amburg.
I know Jamie from my days in television. He’s probably the best executive in the TV business, having built a 15-year successful career at Sony Pictures Television, after previously being at talent management company Artists Television Group, and before that, at Columbia-TriStar TV (now Sony).
Executives frequently get a bad rap. The studios and networks have to protect their investments, and executives are charged with overseeing programming. Executives operate in a vertical hierarchy, each having not only to oversee the programming, but navigating the politics of their employment situation, making sure that neither they nor their superiors look bad. Hence the reason why some TV shows can get watered down and be uninspired. When too many people fear for their jobs, risk-taking is non-existent.
Sony TV, under Erlicht and Van Amburg, already had a reputation of producing quality television as an independent studio that isn’t tied to a given network. For example, Sony produced “Breaking Bad” for AMC Networks Inc. (NASDAQ:AMCX). Under the auspices of AAPL, which one can assume hired them to think out-of-the-box, there is the potential to develop some really great television. A billion dollars is a lot of money.
Cash-rich AAPL at the movies
In fact, Apple has so much cash that it can launch multiple TV shows and create a massive film studio that could put rivals on the defensive. Not only that, Apple could buy up entire movie-theater chains – although that business seems to be struggling.
Apple can now fill a space that the studios abandoned when they went all-in on Marvel and LucasFilm and DC Comics and Pixar and established franchises.
Apple can now play “Moneyball” by producing solid films for a price, and with the right model, create a streaming package that may just turn them a profit. It’s all about cost controls on great content.
As for AAPL stock price, there is no question this will be of benefit, provided the content is solid. I trust the execs Apple has put in place. AAPL certainly has the money. It also has something the other studios don’t. It has an exhibition format that can be enhanced continually to optimize the viewing experience – the iPhone.
As a cinefile, I hate watching content on a phone. However, younger generations don’t distinguish. Apple can create a terrific iPhone viewing experience that also can be packaged with the phone itself – get streaming plans as part of a new iPHone purchase.
The possibilities are endless.
Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance and is the Manager of The Liberty Portfolio at www.thelibertyportfolio.com. He does not own any stock mentioned. He has 22 years’ experience in the stock market, and has written more than 1,600 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.
