The Guardian: Apple eyes Time Warner and TV for its next act

Posted June 02, 2016

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Apple has stagnated of late.  Over the past 5 years Apple just seems to have lost some of its innovative magic.  The company hopes that it can regain some of that magic by expanding its TV business.

The nexus of TV and digital video is very much the media frontier of our time.  We are in a time where the definition of TV is constantly changing and the role that video plays on the web (and in our lives) is very much in flux.  To a company like Apple, this is a great opportunity to solidify a place in this process.

Sam Thielman of The Guardian reports on the story:

When you’re the biggest company in the world, with a lead product that is arguably the most successful consumer electronic product of all time, what do you do for an encore?

That’s the luxury problem now facing Apple. And it appears the company thinks it may have found the solution on TV. The iPhone maker has reportedly considered buying Time Warner, owner of Game of Thrones maker HBO, CNN, Adult Swim and Warner Brothers movie studio.

As the larger company struggles with a business model increasingly focused on a single product – the iPhone – Apple is looking to diversify its holdings. Executives held meetings with media giant Time Warner about buying the media firm, according to the Financial Times.

The deal, suggested by Apple senior vice-president Eddy Cue to Time Warner’s Olaf Olafsson, didn’t progress – respective CEOs Tim Cook and Jeff Bewkes never officially sat down – but according to the FT, which confirmed a previous story in the New York Post, what began as a deal to include Time Warner’s programming on a streaming video platform (which Cue oversees) briefly turned into a discussion of how to acquire the whole company.

Netflix and Amazon’s Prime TV service have shown there is an appetite for new TV services backed by subscriptions not ads. And Apple likes the idea of a subscription model, as should be evident from the company’s commitment to troubled audio service Apple Music.

It also needs some new products. Sales of iPhone dropped far enough last quarter to result in the first revenue decline at the company in 13 years. The smartphone is also worryingly dominant for Apple – it made $32.9bn of the $50.6bn Apple received in the quarter; the company’s “services” sector, which made up $6bn over the same 90 days, is where Apple appears to be trying to expand.

Read the full article here.