One of Apple’s films, “CODA,” became the first movie of the streaming service to win an Oscar for Best Picture this week. This milestone means that the founding of Hollywood is finally embracing the movies and TV series that we see as legitimate entertainment over an Internet connection.
But wait: why doesn’t Apple have a streaming video service? And what effect do we have when corporate money piles up the market for the convenience we love? (I asked similar questions about Amazon last year.)
An Oscar is beautiful, but success for Apple is largely defined by making more profit each year. Sorry, those are the rules of capitalism. It’s hard to say whether streaming video contributes to that goal, or if it’s a costly disruption to Apple.
Spending money sometimes recklessly for potential future profits is a years old business strategy. Sometimes it works. At other times it leads to Moviepass, which spends billions of dollars selling an almost unlimited movie theater pass for $ 10 a month, and then bursts.
Either way, companies throwing money around can be wonderful for us, at least for the moment. It has probably brought us cheaper and better streaming video services than we would otherwise have, lower priced Uber rides and cheaper gasoline. Yes, I would make a connection between cheap gas and streaming video. Stay with me
Sometimes products produced as a result of irrational spending in the short term can be a glorious miracle for us and a dangerous mirage when and when money dries up.
Some background: Apple launched a streaming video service called Apple TV + in 2019. Some people who buy a new Apple device get the service for free for three months; Otherwise Apple charges a monthly fee of $ 4.99 in the US which is about one third of the cost of streaming subscriptions of Netflix and HBO Max, with more content to watch.
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Apple rarely explains why it does anything, and the company is unclear about its goals for TV +. But the traditional wisdom is that streaming video is part of its strategy to keep Apple device owners loyal and entice them to spend a little more money.
Does this justify the expense and energy devoted to Apple video streaming? Shrug. It is also unclear whether Amazon’s streaming video service is a successful way to attract and retain Prime members.
Maybe running the Hollywood entertainment empire is just fun. Apple and Amazon are so successful that they can spend some money to find out if they will one day become richer by offering streaming video. But when companies decide that their grandiose cost is no longer a smart bet, it’s worth considering the potential disruption to the products and services we like.
Until about 2020 Uber rides were mostly cheaper, as the company had the money from investors to go after a lot of riders even if the trips were not profitable. Similar financial negligence is now subsidizing city residents who deliver Doritos and milk orders to their homes within 15 minutes. In the 2010s, investor cash flow enabled US energy companies to use new fracting methods to extract oil and gas from the ground.
In all these cases, money that did not need to be spent consciously reshapes our world. We’ve got cheap gas and Uber ride and convenience services that didn’t exist without investors throwing money around and hoping it would pay off in the future. Irrational money also made Netflix an entertainment titan, and now even Amazon and Apple are throwing their cash around.
If there were fewer companies selling entertainment subscriptions we would probably get better and less expensive streaming services than ours. People involved in entertainment have more potential buyers for their work. Nice.
But what if money is more directly linked to sudden profits? Netflix has long needed investors to subsidize its services, and the company is now on sound financial footing. But Uber remains profitable and rides are no longer cheap. Freckers burned their investors’ money so recklessly that they are now wary of digging for more oil and gas even in an energy crisis, because their investors no longer trust them.
Maybe Apple and Amazon make it big in streaming video. But what if one of those companies decides it’s not ready to give up billions of dollars on entertainment that doesn’t help its bottom line? Will Netflix cost 40 per month because there is less competition? Will the script writers end up like Pennsylvania homeowners who relied on royalties from dried shell drilling?
As long as it lasts we can enjoy the money spent on entertainment. But know that it is possible that a lot of money will run out, and it can be painful for entertainers and for those of us who watch it.
Before we go
Uber and taxis unite! Imagine if Duke and University of North Carolina basketball fans held hands and watched the final four together. (For non-sports people: No. Those fans hate each other.) That’s something that’s happening now, as Uber and taxi agencies in multiple cities have begun ordering Uber or taxi rides from the Uber app. My colleague Callen Browning reports on a similar deal coming up in San Francisco.
The company’s technology enables Russian surveillance: Internal documents reviewed by my colleagues detail the work of the telecom equipment company Nokia, which played a key role in Russia’s system for spying on its citizens and dissidents. This is an interesting article that reflects on the role of technology that can be used aggressively and the responsibility of the companies that make it.
Fake LinkedIn people: Disinformation researchers used profile photos to identify more than 1,000 LinkedIn accounts that were not real people but instead computer-generated images. NPR discovered that this was, in essence, an aggressive ploy by the sellers.
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