Apple Inc. (NASDAQ:AAPL) is set to start taking advantage of the booming internet film and TV streaming industry – an industry that is blowing the traditional film rental services clear out of the water.
Apple’s current ventures into this market include a set-top box that can be plugged into most televisions. This device, available at a retail price of around $99, allows users to stream films from up and coming movie provider Netflix, Inc. (NASDAQ:NFLX) and TV programmes from the MLB channel.
Not satisfied with marketing add-ons to other developer’s televisions, Apple began negotiations with EPIX – an online film enterprise funded by three movie studios, earlier this year. The proposed deal would allow apple to stream thousands of movies from the EPIX catalogue directly to its mobile devices and set-top boxes – and, more excitingly; to a rumoured Apple TV.
Following the death of Steve Jobs last year, Apple’s new CEO Tim Cook is a man with a mission; and is under a lot of pressure to prove that he is able to continue the visionary tradition lain down by Apple’s founder.
The new Apple TV – very much Cook’s brain child – is rumoured for release in early 2013. It could be just what the new Apple front man needs to secure his reputation as worthy leader of the world’s most innovative informative technology firm.
However, a TV is surely only as good as its content; and this is where there may be some fingernail biting going on in Apple’s boardroom.
Netflix defends its film monopoly
Netflix, the reigning kings of internet film streaming, have been petulant about what Apple can currently stream to its devices and what it cannot. For the last year, Apple has been blocked from streaming much of the breaking Hollywood content Netflix procures from EPIX.
It is no surprise that a frustrated Apple has decided to cut out the Netflix “monkey” and go directly to the EPIX “organ grinder”. Despite talks between Apple and EPIX being in a very preliminary stage, Netflix may yet attempt to throw a spanner in the works. And who can blame them? Netflix pays dearly for its exclusive rights to film hot Hollywood content to its 23 million American subscribers – in excess of $200 million per year.
With Netflix’ current deal with EPIX expiring in September this year, Apple are waiting in the wings to strike their own bargain. No one doubts both that Apple has the cash, prestige and reputation to secure a favourable partnership with EPIX; or that Netflix will relinquish its online film monopoly without a fight. Netflix is not a small player, and will have deep pockets from which to grease EPIX’ palms if necessary.
The outcome is by no means certain. Not everyone is overjoyed at Apple’s meteoric rise to prominence. In 2012 a direct approach by apple to a number of Hollywood film distributors for rights to stream online content was rejected.
One thing is beyond doubt – whatever the outcome of the wrangling between Apple and Netflix, EPIX are going to come out as the silent victors.
