TV Shows Have Nothing to Do with Apple’s Brand (Premium)

Apple invested $14.24 billion on research and development in 2018, a sharp increase of 23 percent over the previous year and a figure that I assume has infamous cheapskate Steve Jobs rolling in his grave. Most of that sum is aimed at helping Apple overcome its reliance on a single product, the iPhone, which today delivers between 65 and 75 percent of the firm’s revenues, depending on how you measure things. But Apple is also investing in original content for a coming TV service, to the tune of over $1 billion. And … what?

Why on earth is Apple making original content?

Don’t get me wrong: That Apple would want to launch a video service of some kind makes plenty of sense. And it’s in good company: Roku and Amazon, Apple’s biggest competitors in the home set-top box market, both have their own video services that they offer alongside much more popular services like Netflix and Hulu.

But there’s a big difference between a video service—which would fit neatly into Apple’s growing family of services—and what is essentially a combination TV and movie studio that will pump out its own content. Few would object to Apple trying to create a cord-cutting solution like YouTube TV, or, better still, a monthly video subscription service that would to for movies and TV shows what Apple Music does for music. But it seems like the real focus of Apple’s coming service is indeed original content that would only be made available via that service. And the last thing anyone needs is yet another service to look for paid, original content.

More to the point, it’s not clear how this effort will benefit Apple in the slightest.

When the firm launched its first iPod way back in 2002, Steve Jobs said that he and Apple loved music, and simply wanted a better way to enjoy it on the go. That almost experimental offering grew into a legitimate, company-altering business, and it was for a time Apple’s biggest money-maker. But for that to happen, Apple had to get it all right as it expanded iPod to Windows, to new form factors, and to the iTunes Store, which forever transformed the music industry.

And not necessarily for the better, lest we forget our history: Apple’s original plan for 99 cent songs and $9.99 albums was quickly abandoned after record labels threatened to leave the service because the consistently low pricing undermined the revenue levels to which it had grown accustomed. We saw a similar backlash against movie and TV show pricing on iTunes, too: Today, new movie rentals often cost $5.99 or $6.99 per film, not the 99 cents or $1.99 price tags we first experienced.

But what’s Apple’s explanation for original content? That it …. loves TV shows? Seriously? Or is it that it loves the idea of TV shows, but most don’t fit neatly into the Disney-like Puritan worldview of Tim Cook and today’s Apple? What’s the theory here, that Apple will make only wholesome, G-rated content in a world that is drenched by the R-rated super-hits we see from HBO, Hulu, Netflix, and others?

Providing movies and TV shows to its customers makes sense, and is expected. But actually creating that content—having editorial control over what gets made—very much does not. And Apple will almost certainly discover what Microsoft did over 20 years ago, when it, too, made a silly and short-lived push into original content. It’s just not in Apple’s (or Microsoft’s) wheelhouse.

In Microsoft’s case, the software giant had just added Internet Explorer and other Internet technologies to Windows and was aggressively targeting Netscape and other then-new startups that it felt threatened its core platform, Windows. The software giant was in full-blown “embrace and extend” mode, and its solution to Netscape was devastatingly effective: It would make Windows the very best Internet client there was, obviating any need for third-party solutions like Netscape Navigator.

That “extend” bit was taken to its obvious literal conclusion when Microsoft decided in the late 1990s to create its own original content, which would be published to the web in the form of interactive offerings that were, yes, best viewed on Internet Explorer (or MSN, which was based on IE). The one I remember most clearly was an “interactive expedition program” called Mungo Park.

“Mungo Park is available on the World Wide Web and features an interactive expedition program, live Internet chats, a famous-author series, and regular columns from well-known journalists,” a Microsoft announcement from 1997 explains. “Named for the famous eighteenth-century Scottish explorer who discovered the Niger River and mysteriously disappeared while navigating its waters, Mungo Park is about exploring the world – both firsthand and online.”

Mungo Park was free to the public, of course, but the firm received $1.2 million in sponsorships to support the site and its employees. But Mungo Park cost three times as much to make as it ever earned, and that perhaps is what led to its quick demise in December 1997, just 8 months after it first launched.

Cost is only one problem with original content, and, yes, Apple has enough money and cash-like assets to finance many modern, Mungo Park-like shows. The bigger issue is one of focus: While the Microsoft of 1997 was a software powerhouse and widely feared by its competitors, it was a newcomer to the world of original content and had to rely on outside experts. It is perhaps fitting then that the 12 staff members who worked on Mungo Park were placed at Microsoft’s Expedia business, an effort that actually did make sense for the company.

I will give Apple some credit for seemingly moving aggressively to shore up its non-iPhone businesses in an effort to stave off the inevitable revenues shortages that occur as its one important business cools. But the problem with services, of course, is that they are reliant on the iPhone. That is, they are complementary, not a replacement. Those services can’t exist without the iPhone.

As for TV shows and movies specifically, this kind of content can’t benefit as much from the popularity and iniquitousness of the iPhone as do other content types, like music or podcasts that can be enjoyed while the device’s user is doing other things. Video content requires both time and focus, and if my understanding of the modern smartphone user base is correct, both are quite lacking.

Again, it makes sense for Apple to supply a service to address this need, even though it will inevitably be a smaller business than, say, iCloud storage or Apple Music. But creating the content that it will deliver? Come on.

Even companies with vast experience creating both content and the services on which it is delivered aren’t necessarily doing so well. The quality and popularity of Amazon’s original content are generally far below that of the top offerings on Netflix or Hulu, for example. And Amazon just this week announced that it would reprioritize its movie business—yes, it has one—after it delivered six flops in a row. (Most of the movies that Amazon has released have each lost tens of millions of dollars.) Many of its movies are now delivered straight to Amazon Prime, which is a sad new take on the old B-movie “straight to video” strategy.

Apple also risks a falling out with the influential elite that currently proselytizes its products. Some of the movie and TV makers, celebrities, actors, and others who will participate in Apple’s shows will inevitably experience a falling out with the consumer electronics giant as it enforces its world view on the content they are trying to make. The backlash could be devastating, especially when details of how Apple operates become public. As they absolutely will. And that, inevitably, will trickle down to the celebrity-obsessed who make up a large part of Apple’s user base.

We’ll see what happens, of course. But if Apple’s initial original content offering, the poorly-received Planet of the Apps, is any indication, we don’t have much to look forward to. Perhaps the service could simply be called Planet of the Craps.