Apple may be a relative latecomer to the streaming video arena but media consultant Michael J. Wolf of Activate Consulting thinks that it’s got a big advantage. Along with Amazon, that is.
In an interview with CNBC‘s “Squawk Box,” Wolf laid out reason why. And it’s a twist on the old Alan Kay saying that a company serious about software should build its own hardware, too.
“Apple is not only going to make money on their own service they’re also going to make money selling everybody else’s services,” Wolf said. “And so will Amazon.”
Wolf thinks Apple will be victorious in the streaming wars because their infrastructure is relied on by many competitors. The idea is that Apple will also benefit from subscriptions taken through the App Store for services like Netflix. In the past, Apple has taken a cut of up to $3.30 every time someone paid $11 for Netflix using an iOS App.
Netflix has since protested this, much as Spotify has done in the music space. Spotify told the European Union this spring that Apple’s 15%-to-30% cut of subscription fees is anticompetitive. The European Commission started a formal investigation of its claims this summer.
Apple TV+ has a big advantage
The reason this reminds me of Xerox PARC (and former Apple employee) Alan Kay‘s quote about hardware and software is because it’s all about who controls the platform. The person who builds a computer has ultimate control over the software running on it. The company which owns the platform media is shown on has a massive advantage over the company that just produces content.
Disney CEO Bob Iger briefly touched on this in a recent New York Times interview. Iger noted how Disney’s acquisition of content like Marvel and Star Wars was a response to the realization that tech giants were going to take over the entertainment space.
At present, Disney+ seems like it’s the streaming company to beat. But Michael Wolf’s comment underlines the advantage that Apple has. It also makes me think that calls for antitrust investigations are only going to ramp up with the arrival of Apple TV+.
Or that a whole lot of would-be Apple TV+ competitors are going to have to avoid the App Store, one of the world’s biggest online marketplaces for services, while they try and grow.