Good news for all the movie and television show lovers. It seems that the streaming media market will gain another player and not just any player. According to the Wall Street Journal, Apple (NASDAQ: AAPL) took into a serious consideration a possibility of producing their own content. The problem is that such reports have already appeared in the past. The question is whether this time these rumors are true. However, everything seems to indicate that the reports about Apple's plan should be taken seriously as they even provided us with a specific date - first productions are to appear before the end of this year.
Surprisingly, Apple doesn't intend to compete with Netflix (NASDAQ: NFLX), Amazon (NASDAQ: AMZN), HBO, and other companies in the streaming media industry. To support this point suffice it to note that although Apple has been in discussions with producers for several months regarding the implementation of potential projects, the company has no intention to spend hundreds of millions of dollars on their productions as does Netflix.
Therefore with whom does Apple want to compete? According to the Wall Street Journal's article, it turns out that it's a ploy to improve the company's market position in relation to the Swedish music service - Spotify. The thing is, however, that Spotify is currently the most serious competitor of Apple Music. The new video content would be available just for the subscribers of Apple's music streaming service and their number is far lower than the amount of Spotify paying users. At the end of last year, in terms of the number of subscriptions, Apple Music was way behind its main rival who counts 40 million subscribers compared to "only" 17 million Apple Music users. As you can see, the difference is quite big.
Apple's investment makes much more sense considering the fact that the company has reported its first decline in annual sales in 15 years. The tech giant registered in 2015 revenue of $244.7 million and $217 billion a year later. The 8% decline constitutes another, tough perhaps temporary, problem for the company, reason for which happens to be the decline in sales of the company's most important product, the iPhone. The sales of the smartphone dropped by 5% compared to the same quarter last year. If we're focusing on the iPhone, let us reflect for a moment what Tim Cook's comapny wanted to suprise us with. The Apple Watch turned out to be a flop - a few months after the release, its sales decreased by 90%. So maybe now's the perfect time for Apple to suprise not only their customers, but the enitre world with something new and exciting.
Will Apple succeed? Of course they will. The streaming media are currently extremely popular and I don't think it'll change soon. Let us recall that Apple is still the most valuable company in the world, so they surely know how to achieve success and they shouldn't run out of resources for creating new and interesting products. I just wonder if after introducing additional video content the Apple Music subscription price will chage which in the US is currently $10 per month.