His Master’s Avatar?

THE RINGER provides me with countless hours of audio entertainment and information. so much so that I often forget its roots are in good old-fashioned writing; as its leader and founder Bill Simmons is prone to say, “ya know, my fingers used to work”.  These days, he has some pretty good colleagues doing that, two of who are named Ben Lindbergh and Rob Arthur.  And as luck would have it, a colleague sent along this lengthy and insightful piece they dropped yesterday that declared their surprise that amidst the tumult and news cycle of disappointment after disappointment from so many streaming services in supplying shows they actually want to watch, they realized that Apple TV+ has stood out this year as a near non-stop supply of content worthy of even their precious attention.  As they wrote,

In 2023, Apple has premiered and pumped out new seasons of critically acclaimed and, in some cases, widely buzzed-about shows (not to mention a movie about Tetris). Shrinking. Schmigadoon! Ted Lasso. The Big Door Prize. Silo. Platonic. Hijack. The AfterpartyFoundation…there’s rarely been a week when an Apple TV+ series wasn’t highly recommended on The Ringer’s Streaming Guide. The same day that recent hit Hijack concluded, the third and final season of Physical premiered. The release schedule for the rest of the year includes the debuts of originals Strange Planet, Masters of the Air, and Lessons in Chemistry; new seasons of returning series such as Invasion and The Morning Show; and, of course, the award-bait, blockbuster duo of Martin Scorsese’s Killers of the Flower Moon and Ridley Scott’s Napoleon.

Throw in several other well-received series that haven’t been active this year—SeveranceFor All MankindMythic Quest, Bad Sisters, Dickinson, Black Bird, Acapulco, Pachinko—and Apple TV+ has compiled quite a library of scripted originals less than four years after its November 2019 launch. Awards have followed, too, including several Peabodies and the first Best Picture Oscar for a streaming service. Last month, the service set a personal record by garnering 54 Emmy nominations, which trailed only the much more prolific Netflix and the long-established scripted titan HBO.

With one pretty important caveat, that is: Far fewer people pay for Apple TV+ than for Max (the recently rebranded streaming service that hosts HBO content) or most other major streamers.

The authors then went into a fairly exhaustive and fact-laden analysis as to why even in success, reflected in the relative overall strength of Apple as a company amidst the grandstanding and malingering of the likes of Disney, Warner Discovery, AMC Networks and other struggling content creators, there’s a prevaling belief that Apple management may wake up and ask themselves the same rhetorical question they pose:

how long the tech behemoth will choose to sustain its streaming service as a probable billion-dollar loss leader while the rest of the industry reduces spending.

While they couldn’t avoid giving unwarranted air to the non-metric of Parrot Analytics who their primary source Brandon Katz trolls for, Lindbergh and Arthur went on to cite some more substantial data as evidence that Apple is a lot close to HBO in perception among those that already have it and know about it:

By some metrics, at least, Apple out-HBOs HBO. According to a recent study by streaming guide JustWatch, Apple TV+ movies and TV series boast the highest average IMDb user ratings of any U.S.-based streaming service.

Similarly, data provided by streaming guide Reelgood shows that Apple TV+ leads the streaming pack in the percentage of its catalog considered “high quality,” which Reelgood classifies as anything with an IMDb rating of 7.5 or higher with at least 300 ratings. 

But then Lindbergh and Arthur wisely turned the page to quantitaive assessment, noting that for a variety of reasons relating both to the volume and genre bias of Apple TV’s current portfolio, some of those qualitative numbers, which also help drive Parrot’s meaningless “demand metrics”, can be a tad skewed.  And it is also Reelgood that supplies this more sobering picture:

Reelgood gives Apple an even slimmer slice of the pie in its “viewership share” metric for the first half of the year, which is based on U.S. playbacks initiated through Reelgood apps.

We Luddites who actually worked to compete with HBO used to call that a coverage gap.  Like having a high quality restaurant in a desert of fast food chains.  And as they reminded earlier, Apple as a company effectively sees its streaming service as only one of its businesses, and hardly its prmary one.  They do want to sell a lot of devices.  I Phones, I Pads, and, soon, pricey VR headsets.

But this isn’t the first time that a hardware-focused company has invested in software as a way to compel people to buy receivers.   In fact, nearly a century ago, RCA found itself in a similar position when it wanted to coax audiophiles to move from gramaphones to those boxy living room-size units called wireless receivers.  Radio to you.

So it repurposed the adorable face of its British phonograph division Nipper to be the literal face of its company as NBC was being rolled out, first on radio, eventually on television.  It  hired some of vaudeville and Hollywood’s most prominent entertainers to do show, literally selling TV sets on the promise of delivering Milton Berle’s TEXACO STAR THEATRE variety show to eager viewers.  But it also provided a way for people to see its competitors, realizing that real demand comes from the aggegate, not just the brand.  Sure, I LOVE LUCY would beat NBC.  But more often than not, NBC put on something better, and they won a competitive race.

Hence, the rumors of Apple being an ideal savior for Disney, particularly stoked with Bob Iger–the real one–appeared in a video announcing the fall launch of their VR headsets, appear to have some support from history.   And live sports like ESPN provides is indeed a compelling carrot to put in front of prospective buyers for that.  But let’s also not dismiss that were that absorption to occur it would enable Apple TV+ to join forces with entities like ABC and FX that reach five and six times the number of potential viewers than they do,   And the industry as a whole is clamoring for someone to step up and address the biggest obstacle to all of these walled garden propositions–the consumer wants and demands the ability to more seamlessly navigate between choices.  For as much as analysts are lamenting the erosion of the cable bundle as the biggest catalyst for the financial woes that have beset traditional media companies, there is clear need for someone to step up and invite others to their party so that the party can actually go on.

In Apple’s case, providing the home and preferred device for an array of streaming services as well as the one they own would be an ideal way to push out their current one well beyond their current levels,  Citing an oft-quoted source known as the Entertainment Strategy Guy (ESG), the authors offered up this reasonably sound recap of exactly how large the current availability gap is for Apple TV+”

Based on the best figures available, Apple’s subscriber base is minute compared to streaming’s heavy hitters. ESG estimates Apple’s domestic subscriber count in Q1 at 14.8 million, which puts it eighth among streaming services—far behind titans Netflix (67.2 million), Hulu (48 million), Max (45.9 million), Prime Video (45.4 million), and Disney+ (41.7 million) but also looking up at Paramount+ and Peacock, which were in the range of 20 million to 30 million. 

Back when Ted Turner was trying to prove his network’s success on a relative basis, he and his researchers conceived the concept of a “coverage area rating”–given your footprint, how successful were you?  Ted would regularly tout that Andy Griffith reruns were in the ballpark of a 4 or 5 national rating, when the truth was in reality reaching only a fraction of the country its actual national rating was much less.  But TBS worked diligently with the balance of the cable industry to grow its collective distribution, which reaped parochial benefits for Ted’s networks in the process.

That’s an opportunty and a playbook readily available for Apple TV+, and for Apple as well.  And if their talented team of creatives happened to be buttressed by the kind of executive talent and expert marketers that have propelled FX to best in their class, let alone propped up Hulu to be a worthy competitor, that would be a highly desirable byproduct of such a move.

So here’s hoping someone somewhere in a position to do something about it considers this.  I’d much rather see this dog have its day.

Until next time…

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