Clash of the Tech Titans: Apple Roars Into Streaming Entertainment

Live streamers could be forgiven for wondering if the Oscars had moved to the Steve Jobs Theater in Cupertino Monday morning, because there were so many big Hollywood stars on stage. Steven Spielberg, Steve Carrell, J.J. Abrams, Reese Witherspoon, Jennifer Aniston, and… why am I burying the lede?

Oprah! Why is she working with Apple to deliver two documentaries and a book club? “Because they’re in a billion pockets, y’all! A billion pockets!” she roared to an adoring crowd.

In a reveal that lasted almost two hours, Apple announced major new forays into the worlds of news, gaming and entertainment. All three are mature industries with a lot of competition. But perhaps the tech giant’s gutsiest move is into entertainment. It’s hard to imagine how Apple TV+ — due to arrive sometime this fall — will be qualitatively different from the wide range of content already on offer.

See the “sizzle reel” from the Apple presentation.

That said, Apple has been late to a game before, and still redefined the field of play. Ian Sherr, editor at large at CNET News, has seen it happen several times: with the personal computer, the tablet, and the smart phone.

“That’s one of the fascinating things about Apple. They always wait to see what works and what doesn’t, and then they come in and they do their own version of it, and it tends to be really successful,” Sherr said.

“Apple’s relationship with customers has started to wane over the past few years as the company has seen the role of its hardware diminish in people’s lives,” said James McQuivey, an analyst at Forrester tracking digital disruption. “Focusing on more media and entertainment experiences that are exclusive to the Apple experience will revivify Apple’s relationship with its customers.”

Alex Ben Block, who writes about the business of entertainment for a variety of media outlets, is more skeptical. “While it is hard to underestimate Apple, this moves them into an area where there is much greater competition. Entertainment is widely available at little or no cost, and competitors led by Netfilx and Amazon are already offering more than Apple, even with the star names involved,” Ben Block wrote.

He added, “The lesson of Amazon is that they had to offer a lot more than entertainment to get people to sign up for Prime, and they floundered until they had a hit series with Mrs. Maisel which got people to sign up and continue. Apple needs to find its Mrs. Maisel quickly or it could lose a ton of money.”

But Sherr believes Apple has the wherewithal to go up against the biggest names in streaming entertainment: Netflix, Amazon, and Disney. Notice how two of the three names on that list are also digital natives?

The biggest threat, if it ever materializes, would be from federal antitrust regulators. “The tech industry broadly has been going towards this trend of what’s called verticalization, where they own every bit of what I’m buying,” Sherr said.

One last thing: Apple is one of the most highly valued companies on the planet. And like its biggest rivals in Silicon Valley, Apple has the capacity to run at a massive loss. Maybe not indefinitely, but for longer than most Hollywood old-timers.

“There is always room for disruption,” Sherr said. “If Apple does it right.”