Picture source @Visual China
text | Lei Technology leitech
At the 2020 Oscars ceremony, Netflix's " The Irishman " failed to produce any results, which triggered a heated discussion at the time. Many people believe that behind this is the profound contradiction between traditional film academies and streaming media.
Recently, Apple TV+’s two 2023 masterpieces "Killers of the Flower Moon" and " Napoleon " received 13 nominations for the 2024 Oscars. As for whether Apple can make any gains this year, we have to wait until the Oscars ceremony on March 10 to find out.
Regardless of whether Apple's two movies win awards, they have already earned enough eyeballs in 2023. This is naturally a good thing for Apple, which continues to develop its streaming media business.
spends US$400 million, does Apple TV+ not care about the box office?
"Killers of the Flower Moon" produced by Apple and directed by the famous director Martin Scorsese. Interestingly, 2019's "The Irishman" was also produced by him. Moreover, the investment amounts of "Killers of the Flower Moon" and "The Irishman" both exceeded US$200 million. Netflix and Apple's attitudes toward the film's box office are also surprisingly consistent: let it happen. Apple's other 2023 masterpiece "Napoleon" hired another famous director, Ridley Scott, and also cost $200 million.
(Source: Apple)
Compared with traditional film companies, Apple appears to be very willful in investing in movies: giving directors huge budgets and ample creative space, while not setting box office targets. On the surface, Apple is the magical investor that most directors long for.
The reason why Apple is so generous is mainly due to the huge difference between streaming media and traditional theater models. In the traditional model, the difference between box office and investment determines whether a film makes a profit or a loss. Therefore, the relationship between film industry investors and directors is often a game, and they need to compromise between the expression of creative intentions and market performance.
In the streaming media model, Netflix and Apple invest heavily in homemade videos in order to attract paying users. To put it simply, under the subscription system, users usually do not pay for a certain film for a long time, but for the film and television library in the platform. In this way, if one or two movies do not perform well in the market, they will not be as damaging to the company as in the traditional theater model.
At the same time, Netflix invested in "The Irishman" and Apple launched two blockbusters, "Killers of the Flower Moon" and "Napoleon", with the primary goal of expanding their influence. Recruiting well-known directors and engaging in large-scale productions is a very typical Internet-style money-burning marketing. For them in a state of expansion, profitability is not the highest priority.
(Source: Netflix)
Of course, judging from audience reviews, "Killers of the Flower Moon" and "Napoleon" have relatively average reputations. The subject matter of "Killers of the Flower Moon" is relatively unpopular, and its running time of more than three hours is enough to persuade people to quit. "Killers of the Flower Moon" has a Douban score of 7.3, which is a moderate level. As for the box office, as of the end of last year, "Killers of the Flower Moon" had grossed approximately US$100 million worldwide.
"Napoleon" has received more negative reviews. As a biopic, it has been accused by a large number of viewers of deviating from historical reality and vilifying Napoleon. "Napoleon" has a Douban score of 6.4, which is a poor level. The global box office of "Napoleon" in 2023 is probably more than 200 million US dollars, but it still cannot cover the total cost of the film.
It should be noted that "Killers of the Flower Moon" and "Napoleon" are both invested by Apple, but Apple also cooperates with traditional film companies and is released in theaters and streaming media at the same time. Among them, the offline distribution of "Killers of the Flower Moon" is handled by Paramount, and the offline distribution of "Napoleon" is handled by Sony Pictures. Although the two films may not be profitable in the end, Apple has made enough buzz and traffic this time to achieve its expected goals.
has been online for 4 years, how is apple tv+?
Since its official launch at the end of 2019, apple tv+ has received a lot of attention. Its emergence means that Apple has launched a film and television streaming service.Apple has spared no effort in promoting Apple TV+. Many of Apple’s massive devices come with pre-installed video apps, and you can often see promotions about it in the app store.
So, after more than 4 years since its launch, has Apple TV+ produced any results?
First of all, in terms of works, apple tv+ has made some achievements. Apple invests heavily in self-made films and television every year, producing batches of movies, TV series, TV shows and other works, many of which have gained good reputations, and some have won many awards. According to incomplete statistics, there are more than 40 film and television works produced by Apple that have a Douban score of 8.0 or above, such as "Morning News", "Football Coach", "Life Cutting Technique", etc.
In terms of awards, in 2021, "Football Coach" won four Emmy Awards that year, including Best Comedy Series and Best Actor in a Comedy. In 2022, the low-cost film "Hearing Girl" purchased by Apple won three Oscars for Best Picture, Best Supporting Actor and Best Adapted Screenplay.
(Source: Apple)
Secondly, in terms of user number and revenue, since Apple has not officially released exact data, we cannot make accurate judgments. Justwatch, a streaming media aggregation search platform from Germany, has released a market report for 2022. This data shows that among global streaming video platforms, Netflix’s market share is 23%, Amazon’s is 20%, and Apple’s is only 5%.
(Source: justwatch)
Netflix’s number of subscribers in 2022 will be approximately 230 million. If Apple’s number of users is extrapolated from this, the result will be approximately 50 million. Even if each of these users purchased an annual membership, Apple's annual revenue would only be more than $3 billion.
Apple’s Q4 financial report data for fiscal year 2023 shows that Apple’s service revenue for the quarter reached 22.314 billion U.S. dollars, accounting for nearly one-third of total revenue. The criticality of the services business to Apple is self-evident, and its contribution to revenue is second only to the iPhone. However, Apple’s service business specifically includes multiple business segments, of which apple tv+ is only a small part. In terms of subscription services alone, Apple also includes apple music, apple arcade, icloud+, apple fitness, apple news+, etc.
At present, Apple TV+ has not made a big splash in the streaming video market and has not had much impact on the original giants. After all, the operating model of Apple TV+ is essentially the same as that of Netflix and HBO. When giants such as Netflix already have first-mover advantages and occupy large swaths of the market, it is not that easy for Apple, a latecomer, to catch up.
The potential is still there, and Apple cannot give up on apple tv+
At the Oscars ceremony in March this year, whether "Killers of the Flower Moon" or "Napoleon" wins the award will become a hot topic on the Internet. As a newcomer to the film and television industry, Apple, which has already won Emmy and Oscar awards, has fully proven its ability in film and television production.
apple tv+ has not yet achieved good enough results in terms of market share and other data, but Xiao Lei believes that Apple will continue to spend money on this business to try to open a gap in the streaming media business.
For Apple, mobile phones, PCs, tablets and other hardware are already highly mature products, and their market capacity has already bottomed out. Even though Apple remains the leader in the mobile phone industry, annual iPhone shipments continue to decline. To this end, Apple’s product strategy for mobile phones has shifted from pursuing sales to increasing unit prices and profits. However, there is a visible ceiling for the growth of the hardware business, unless products like Vision Pro can become the next iPhone (which is unlikely in the short term).
At this time, using the existing massive devices and users to vigorously expand service business revenue is Apple's best choice for finding growth. Therefore, Apple has given users free trial qualifications for subscription services again and again, and advertised apple music, apple tv+ and other services on various occasions.
Moreover, compared to Netflix and HBO, Apple has an important advantage that no one can match - thick blood. Apple holds hundreds of billions of dollars in cash flow, is fully patient with Apple TV+'s profit time, and is also rarely generous in investment in film and television.If Apple continues to invest heavily in high-quality content, it may one day successfully challenge the streaming media market structure.
