business news in context, analysis with attitude

by Kevin Coupe

MNB readers know that I like to use Netflix and Amazon as a metaphor for the importance of differentiated product in the retail environment. While those companies used to sell and rent movies and TV shows that had a previous life in theaters and on traditional networks, they moved to producing their own, private label programming because they knew that renting and selling stuff customers could get elsewhere wasn't the most sustainable business model.

This is a realization that Netflix CEO Reed Hastings had pretty early on - that the company could not just compete with Blockbuster, but had to compete with the likes of HBO, if it were going to have a firmer long-term foundation.

I've always thought this is an example that more retailers ought to emulate. Too many retailers depend on products that can be bought elsewhere, as opposed to products and services that customers can only get at their stores. That's dangerous, I think. Differentiated, unique products and services not only allow retailers to compete with their bricks-and-mortar brethren, but also against companies like Amazon that have their own advantages.

The Wall Street Journal this morning confirms a long-rumored story about a major player that has decided to take a similar approach. According to the Journal, Apple now "is planning to build a significant new business in original television shows and movies ... a move that could make it a bigger player in Hollywood and offset slowing sales of iPhones and iPads."

The story goes on to say that "programming would be available to subscribers of Apple’s $10-a-month streaming-music service, which has struggled to catch up to the larger Spotify AB. Apple Music already includes a limited number of documentary-style segments on musicians, but nothing like the premium programming it is now seeking.

"The technology giant has been in talks with veteran producers in recent months about buying rights to scripted television programs. It also has approached experienced marketing executives at studios and networks to discuss hiring them to promote its content, said people with knowledge of the discussions."

Now, the Journal story also suggests that Apple isn't looking at this opportunity with the same sense of scale that Amazon and Netflix have brought to the original content party ... but I'm pretty sure that this largely will be dependent on how successful Apple is in its initial efforts. If it can create a "House of Cards" or a "Westworld" or a "Game of Thrones" or a "Bosch" ... programs that generate high viewership, strong critical reviews and actual revenue ... plans could be changed and visions expanded.

Regardless, the broader message is an Eye-Opener ... and it goes back to a message that Apple embraced many years ago.

Think Different. And even more importantly, Be Different.
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