Blogs & Comment

The world really doesn’t need a Netflix knockoff from Apple

Apple has never nailed me-too products like Maps or Music, and a rumoured Netflix-killer is likely to follow the same script

Apple TV


Another day, another Apple rumour. Or perhaps that should be: another Apple television rumour.

This one, courtesy of Variety just ahead of Apple’s iPhone event on Sept. 9, has the company looking to launch a streaming video service to rival Netflix, complete with its own original programming.

According to Variety:

One high-level executive who talked with the company said the goal is to create development and production divisions that would churn out long-form content to stream in a bid to compete with Netflix. Apple is hoping to put a headhunting firm on those hires in the coming months, according to source, with the goal of being in operation next year. Unknown is whether the focus is on TV series, movies — or both.

Like virtually all unsubstantiated reports regarding Apple, which refused to comment, this one is short on details and proposes a range of possible routes the company could take with a streaming service.

It’s hard to like Apple’s chances in any case if true, which means a streaming service isn’t something the company should expend too much effort on.

Apple ascended to its lofty heights on the backs of the iPod, iPhone and iPad, which collectively account for about 70 per cent of its revenue (the iPod is actually just a smidgen of that now).

None of the three products were the first entries in their respective categories, but they did turn out to be the best. In each case, Apple took its time and looked at what competitors had done, then improved on them to create best-in-class experiences. The same goes for its computer products.

Apple looks to be repeating that formula with smartwatches. The company looked on as other manufacturers’ products failed to catch on, then came to market earlier this year with the Apple Watch, which many consider – or expect to be after another iteration – best-in-class.

(Of course it’s still a smartwatch, a product category of dubious usefulness to the broader population, but that’s another story.)

When it comes to video streaming, where Netflix is leading an increasingly crowded market, the same conditions – where Apple could swoop in and easily dominate the market – don’t exist. Netflix works well and is pretty much everywhere, has a slick interface with decent recommendation technology, and a great monthly price.

Netflix has indeed perfected the video streaming experience. There isn’t much weakness that Apple could exploit.

A case could arguably be made that Netflix’s library isn’t as current as it could be. The company’s movie collection is often likened to a Walmart remainder bin, more so now that it’s losing blockbusters such as Hunger Games and Transformers, and its TV shows are usually limited to whatever was on a year ago. 

Apple could launch a service featuring the latest episodes of hot shows or movies that were just in theatres, or perhaps even add live sports, but that content is expensive to acquire. Studios and sports leagues would charge top dollar for it and cable providers would fight tooth and nail to avoid being cut out of the picture.

Having its own video streaming service isn’t imperative to the ongoing relevance of Apple’s main business – it’s a handy bonus at best – so it’s hard to see why the company would want to bother with such an expensive proposition, even if it does have $200 billion (U.S.) in cash to burn. There are at least a dozen other businesses it could get into and quickly dominate (one of which I’ll suggest in my next post).

It’s true that Apple has made the leap into streaming music, but reviews so far have been mixed. Like Netflix, there are other streaming providers – Spotify, especially – that are well advanced and doing their jobs quite nicely, without many weaknesses. Apple Music is thus a me-too product, up there with most of its software offerings: Aperture, Apple Productivity Apps, Maps, and so on.

There’s an argument to be made, and has been made for years, that Apple needs to transition iTunes – which makes money via individual transactions – to a subscription model, since that’s what consumers are increasingly preferring.

But me-too products aren’t what made Apple a great company. Focusing on them rather than inventing or reinventing new products and services won’t sustain the momentum the company built with the iPod, iPhone and iPad.