As stated in my last article about Apple ($AAPL), I said I don’t like to speculate on who Apple should buy, because the larger acquisitions will likely never happen. That being said, in that piece I also highlighted the Apple TV “cord cutting” bundle being rumored and then never appearing as a reason the stock declined.
After we saw the amazing and humorous “Backstage” video made by Apple to open WWDC 2015, there have been rumors Apple was exploring creating their own Netflix-style content. Many people brushed this rumor off as being unrealistic, but their polished WWDC production left everyone wanting more. Today, we got a rumor that Eddy Cue from Apple was looking at Time Warner ($TWX) to acquire it. With such additions as HBO, CNN, the Warner Bros. library, Cartoon Network and more, the content available on the Apple TV begins to beef up. Not only their content, but their ability to create content significantly improves due to newfound industry resources.
Along with buying content and eventually creating content, the selection of programming on the box may still seem limited. It should be recognized that Bob Iger of Disney ($DIS) is on the board of Apple, and the two companies have a tight relationship. Disney’s content, such as ESPN, ABC, their children’s TV content channels, and obviously their film library, might be just enough to seal the deal for cord-cutters. Disney Interactive will most likely develop gaming content for the Apple TV, such as porting the wildly popular Disney Infinity game series.
But wait, there’s more. Comcast ($CMCSA), after seeing the strength of Apple’s new offering, will probably give in and sell their channels on the Apple TV. So far they have resisted and are seen as being the key reason the cord-cutting service hasn’t been released. It is believed they were working with Apple but were secretly developing their X1 platform.
In closing, I do like the concept of an Apple with a media content creation engine running beneath the hood. I believe the Apple TV will be the definitive cable box of the future, but without the cable attached. With their own original content, HBO, ESPN, CNN, ABC, children’s content from TWX and Disney, streaming services from other companies such as Comcast or Netflix, and an iTunes movie rental/subscription service, Apple may have the key to fixing the TV experience alongside their apps. I feel that the Apple TV could be the true winner among millennial cord-cutters.
