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Will Apple's Higher Content Budget Foil DIS, CMCSA '19 Plans?


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Apple 's AAPL foray into the streaming space comes at a time when the media landscape is witnessing a shift in viewers' preference to online streaming from legacy platforms.

The iPhone maker is focused on becoming a major streaming provider. This is evident from its aggressive push into the streaming market based on its plans to strengthen content portfolio supported by higher spending that is now expected to hit $4.2 billion by 2022 from an estimated $1 billion in 2018.

Apple Inc. Revenue (TTM)

Apple Inc. Revenue (TTM) | Apple Inc. Quote

By continuously focusing on acquiring/partnering with Oscar-winning content makers, Apple is trying to carve a niche for itself. The company's recent deal with A24 indicates how the company is targeting unique and appealing content in the age of big deals with top stars to draw audiences.

This apart, Apple acquired global distribution rights for two "family-focused movies", Wolfwalkers and The Elephant Queen in September.

Moving beyond family-friendly content, the company is in advanced talks to buy a violent Israeli TV show " Nevelot ", per CNBC . If the deal materializes, Apple and 21st Century Fox will co-produce the series and adapt it for the American market with Richard Gere in the lead, per reports.

This move makes sense as it needs to acquire high-impact content from a variety of genres to serve a diverse audience.

Disney, Comcast Spending More Than Apple

However, Apple's investment is miniscule compared with other dominant names in the video streaming industry. Moreover, the company faces significant competition not only from existing streaming providers like Netflix NFLX and Amazon AMZN but also from upcoming service providers like Disney DIS .

Notably, the combined spend from Disney and Comcast CMCSA post their respective acquisition of 21st Century Fox and Sky is expected to reach $43 billion by the end of 2018, per Ampere report.

This means $2 in every $10 spent on global content and nearly $4 in $10 spent on United States content will be from these two entities. Although Apple has the cash and resources to boost its original content spend, its submissive approach remains a concern.



Disney and Comcast's spend is way ahead of Netflix and Amazon's combined spend of approximately $17.5 billion for 2018 alone. Moreover, Disney's Marvel , Star Wars and Avengers among others are expected to boost its market position after the launch of its own streaming service Disney+.

However, Apple's loyal customer base may help the company get a head start if it gives away its streaming content for free to Apple device users. Also, its low-cost streaming TV dongle is likely to expand the reach of its content to non-Apple device users.

All the three stocks, Apple, Disney and Comcast currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The Walt Disney Company (DIS): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Netflix, Inc. (NFLX): Free Stock Analysis Report

Comcast Corporation (CMCSA): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Business , Stocks
Referenced Symbols: DIS , AMZN , NFLX , CMCSA , AAPL



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