With over $145 billion in cash, should Apple start their own content company?
Content, content, content. Access to streaming, for sale, pay-per-view, subscription, and/or video-on-demand content will seemingly be what drives the success and failure of all media companies in our Internet-connected world.
But just providing access to someone else's video content alone doesn't seem like it may be enough anymore. Just look at HBO: Oz, Game of Thrones, The Wire, The Sopranos, Entourage... The list goes on. HBO will (hopefully?) eventually offer a monthly subscription to their content without the need for a traditional cable subscription. Showtime will likely follow, as will other premium cable channels. Accordingly, Netflix already has House of Cards, Hemlock Grove, and Arrested Development, with more on the way. Amazon has started several, and Redbox/Verizon are rumored to be starting their own production venture also.
It's all coming down to exclusive content. Like Netflix's Chief Content Officer Ted Sarandos said, "The goal...is to become HBO faster than HBO can become us." All of these companies are looking for ways to stay competitive and promote their product, leading inevitably to exclusive content.
But what about hardware companies?
Microsoft wants to sell more Xbox's, and is bringing its own exclusive content by way of Halo and Steven Spielberg. Amazon wants to sell more Kindle's to then sell more books, hammers, cables, bed sheets, shampoo, TVs, light bulbs, beach chairs, etc. And having exclusive content for Amazon Prime members helps them get there.
That said, it begs the question: with over $145 billion in cash, would it behoove Apple to at least consider the idea of building their own entertainment company? If Netflix could do House of Cards on a $100 million budget, imagine what Apple could do with a $1 or $2 billion budget and some of the top actors, producers, directors and writers in Hollywood? We already know that Apple likes to control all aspects of the ecosystem for the benefit of user experience. Why not offer their own exclusive content as well?
They could offer exclusive content (on the level of House of Cards, The Walking Dead, Disney or Game of Thrones) as part of a monthly subscription in addition to a standard library of titles for streaming, and still offer individual purchases like today's traditional iTunes Store. That could be a real boon to an ecosystem like the Mac, iPod, iPhone, iPad, iCloud and most of all, Apple TV.
Top notch exclusive content streamed only to iOS and OS X devices using iCloud accounts could lead to even more hardware sales for the company, making for an even more robust ecosystem.