In five years, Apple will ramp up its content development under the yet-to-be rebranded Apple Music banner -- rising to $4.2 billion by 2022 from $1 billion this year, according to one analyst.
Apple will still be behind the two other big digital/online content developers -- Netflix at $6.8 billion and Amazon surpassing Netflix at $8 billion. In 2017, it is estimated Netflix will spend $8 billion and Amazon will spend $4.5 billion.
CBS just ironed out another testy deal with big traditional pay TV provider Dish Network. This was also about content.
A key part of the deal for Dish went wanting: Getting CBS to sign up for Dish’s virtual/digital multi-program video distributor Sling TV. Right or wrong, Sling TV represents the future for Dish -- especially as it continues to lose traditional TV consumers for its satellite service.
According to reports, Dish wanted to do a deal with CBS, but only for a select number of its TV stations/affiliates. Why would it do this when it needs to show consumers it has all major networks on its digital live, linear TV service?
Because CBS wanted a premium when it came to subscribers' fees. Les Moonves, chairman/CEO of CBS Corp., says when a consumer switches to new digital pay TV providers, CBS’ carriage fee “doubles” what it gets versus its traditional distribution platforms.
Dish doesn’t want to be saddled with this expense for future carriage renewals. Future digital distribution services of TV networks will yield, at least initially, much smaller profit margins than Dish and other pay TV providers receive for their respective pay TV platforms.
So it comes down to content -- and money. Virtually all other new digital services -- DirecTV Now, Hulu with Live TV, PlayStation, YouTube TV -- have all the major broadcast networks on their platforms. Sling, the oldest service, has all the big broadcast networks but one.
And the future doesn’t look so hot -- especially when Netflix, Amazon, Hulu and Apple look to spend billions on movie/TV content, trending more than the big legacy media companies -- movie/TV studios that own broadcast networks.
That’s not a good scenario if you believe content is king -- and if money for that content is king. Are distribution services for TV networks -- of all types -- out of favor in media’s royal court?