Comment: Battle For Ten More About What Apple Are Doing
The battle for control of Channel Ten is more about content distribution, costs and owning a brand name that consumers know and trust.
News Corporation a prime contender to own Channel Ten, already own 50% of Foxtel, they know that the battle going forward has nothing to do with the Nine, Seven and Ten networks slugging it out for market share, instead it’s going to be a battle between Netflix, Amazon, Google, and the likes of Apple who last week moved to hire former Sony executives to head up a new original content creation division.
There is also speculation that Apple will still roll out an OLED TV in the future.
Apple’s ambitious push into the original-programming business will see the technology Company compete head on with News Corporation’s 21st Century Fox business who are already a major supplier of content to Ten.
Lachlan Murdoch, who is executive chairman of 21st Century Fox and co-chairman of News Corp, knows that the biggest cost burdens for Ten are the content and programming supply agreements it has with the two major studios, the Murdoch-controlled 21st Century Fox and CBS.
From a global perspective, News Corp wants to protect its content business from the likes of Amazon Facebook, Google and Apple, who are now moving to produce content, they already scoop up much of News Corporations previous media revenues.
To compete, News must get scale through either consolidation or alliances so it can underwrite the cost of developing content which is why they want ownership of Channel Ten.
On the other hand, the likes of Apple know that their future is about content not necessarily hardware.
Which is why the US Company has hired Jamie Erlicht and Zack Van Amburg, who oversaw Sony Pictures Television productions such as “Breaking Bad” and “The Crown”.
They will join Apple in new positions as co-heads of video programming world-wide, Apple said.
They will report to Senior Vice President Eddy Cue, who oversees Apple’s $24 billion services business, which includes iTunes and its $10-a-month streaming-music service.
The hires signal Apple’s seriousness about jumping into the crowded programming business, which Mr. Cue has been working toward for more than a year.
The Wall Street Journal said that original content has skyrocketed over the past five years as Netflix, Amazon, CBS a major supplier to TEN with shows such as NCIS and others vie for viewers who are increasingly dropping free to air TV in favour of streaming services.
At the same time, free to air TV networks in Australia are struggling to fund the high cost of sports programs.
Apple has been in talks with veteran Hollywood producers about buying rights to originally scripted television programs.
The move could be transformative for Hollywood and help offset slowing sales for Apple.
Apple’s music-streaming service already has taken tentative steps to carry original video content, cutting deals for shows like “Carpool Karaoke” to differentiate it from rival Spotify AB.
By broadening its video-programming push, Apple could boost its services business, whose revenue Chief Executive Tim Cook aims to double to about $50 billion by 2020.
It also could boost customer loyalty to devices like the iPhone and its Apple TV digital-media player, where its content-delivery services are native.
The departures of Mr. Erlicht and Mr. Van Amburg represent a major blow for Sony Pictures Entertainment, which wrote down $1 billion in February due to its movie-studio woes. The two executives are well-regarded for their ability to identify TV programs and played a critical role in turning Sony’s television business into a formidable Hollywood player by developing shows like NBC’s “The Blacklist” and FX’s “Rescue Me.”
US observers claim that even with the hires, Apple faces sizable challenges in the media business, where its efforts so far have a mixed record.
Its iTunes service revolutionized the music business, giving birth to downloadable, $1 songs. But an effort to bring publishers to the iPad triggered a price-fixing lawsuit, and a more recent play to create a TV-subscription service fizzled.
Apple began to dabble in programming last year with a deal to stream a documentary about a drum machine called “808” on Apple Music. This year it has pushed “Planet of the Apps,” a reality show about app developers modelled after “Shark Tank,” and “Can’t Stop Won’t Stop: A Bad Boy Story,” a movie produced by hip-hop artist Sean “Diddy” Combs.
Still, Apple’s limited programming and its decision to put it on a music service rather than building a TV service sowed confusion in Hollywood, as agencies and studio executives tried to reconcile Apple’s relatively small steps with reports in The Wall Street Journal and elsewhere saying it planned to build a significant new original television business.
Apple Music executive Jimmy Iovine of Beats fame, who works out of the company’s Los Angeles office, first brought Mr. Erlicht and Mr. Van Amburg together with Mr. Cue earlier this year to discuss how Apple could compete in the original-content business, according to a person familiar with the process. The Sony executives’ contracts with the studio were up this August, and Mr. Cue moved to bring them on board because he was impressed with their experience in the industry.
In a statement, Mr. Erlicht said, “we want to bring to video what Apple has been so successful with in their other services and consumer products—unparalleled quality.” Mr. Van Amburg added, “We could not be more excited about what lies ahead.”
In addition to developing shows they hope will break through in today’s crowded media market, the executives will have to sort through questions including whether Apple will launch a new TV-subscription service, as it has long desired. If that happens, they also will have to determine if subscribers could buy both music and TV services at a discounted price.