Apple's Embrace of Content & Channels

But are they firing on all cylinders?

Apple’s rebirth, post the return of Steve Jobs, came from its simplicity. When he returned, he stripped down their line-up to four areas:

He was a big fan of simplicity:

That's been one of my mantras - focus and simplicity. Simple can be harder than complex: you have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains.

I’m not sure how he would have got on with the release of the iPhone 12, iPhone 12 Mini, iPhone 12 Pro and the iPhone Pro Max. Indeed, the company’s very different to when Jobs was the CEO. Now, around half their income comes from iPhones - with tablets, computers, wearables and services all making up the other half.

‘Services’ has been a key focus for the company. Subscriptions are a key growth business for Apple, which already around Storage, Music, TV, News and now even fitness. Indeed Apple One is their attempt at a RUNDLE - bundled recurring revenue subscriptions - by bringing together many of their services. Many of these subscription products are built around content that was originally other people’s - its Music and News subscriptions - but now they’ve expanded to services around their own created content in TV and the new Fitness+.

Fitness+ was mentioned in the Apple Keynote last month. It’s basically going to be a TV-like service with trainers doing work-outs for you at home, hooked up to your Apple Watch, if you have it.

Whilst I think it has a sort of Fifteen Million Merits Black Mirror vibe, it is a pretty innovative service. It brings together devices - screens and watches and combines it with specialist video and Apple Music. If you have someone in your household who Zoomed a gym class in lockdown, you know how it could definitely be a thing.

In some ways it seems a sort of choose-your-own-adventure keep-fit TV channel.

Over at Apple Music the innovations have remained a little lacklustre. Their three radio stations, born out of the embers of Beats 1, have been joined this week by a music TV channel.

It’s a free, curated, 24-hour live stream of popular music videos, currently only available in the US.

It’ll be a place that they feature new releases, alongside interview programming and curated concepts - like the launch programming of 100 Most Streamed Songs on Apple Music.

A music TV channel doesn’t sound very today. Indeed, I think it fits in with my comment a few weeks ago that Apple Music builds brand-driven products rather than consumer-driven products. The radio stations and the TV channel seem to be products to satisfy the record industry rather than consumers.

And if Zane Lowe’s interview with Troye Sivan manages just 17k views on YouTube, I’m not sure how must-see it’s going to be on Apple Music TV.

Apple TV+ as a destination streaming product has had similar lacklustre success. It’s had some break-out shows (I love a bit of Morning Show and Ted Lasso) but lacks a large catalogue - Apple has eschewed Netflix and Amazon’s licensing of material.

In the podcast space, Apple Podcasts has been the clear number one since the beginning. However more recently it’s been out-innovated by Spotify, who have combined what Apple Podcasts does well - curation - but layered on exclusive content, new products like Music Shows and is well supported by marketing. Spotify are hungry to win the podcasting wars whilst Apple seem to shine little light in that direction.

Content x Marketing x Distribution

My general view has been media success comes from combining content, marketing and distribution. “Content is King” is bullshit. Modern media is more proportional representation than it is first past the post. All three elements are essential to guarantee success.

In Apple’s case, a cursory glance would assume they have all three - so why don’t they cut through more?

It’s the most valuable company in the world, so of course it has the opportunity to be successful at whatever it wants, but in the media space, whilst it notionally has all three. The effort into each of them is lacking.

Be it the TV+ or the radio stations, the content’s there, but it isn’t very deep. There’s little that’s must watch, or must listen. With Podcasting, they’ve got the back catalogue - but little that’s unique or special.

On marketing, again, there’s infinite resources, but little applied to the media products. Have you ever seen a TV ad for Apple Music 1 or Apple Podcasts?

And then there’s distribution. You can tell what’s important to Apple by how much something is locked to their products vs available everywhere. Apple TV+ is on Apple hardware, but also Roku and Samsung TVs whilst Apple’s radio stations are locked as a subset of Apple Music (even if there’s both an iOS and Android version). Apple Podcasts remains iOS and MacOS only (and perhaps, as a stretch through a legacy Windows program).

I imagine they’ll make a better job of Apple Fitness+. It’s a unique product, bound tightly with high end devices. The distribution is less of an issue than the media products face, as they’re appealing to a smaller group of people - the Apple Watch crowd.

Broad media success does not come when you’ve got one hand tied behind your back. Netflix and Spotify have captured people’s imaginations with their products because they go in hard on all three - content, marketing and distribution.

Legacy Media

I think there’s lessons in this for other media operators - particularly in the audio sector.

Radio’s historic monopoly position gave it distribution dominance, this let it invest in content, where it had little competition (particularly locally) and its marketing had easy cut-through. In addition, for the BBC, it’s cross-promotional muscle meant it could out market anyone and its content budgets have always been extremely healthy. Whether initially building transmitters, helping create DAB or launching Freeview, its activities have always meant that its content has pretty much had perfect distribution.

As we shift to a more competitive environment, with more content competitors and platforms for consuming audio - I think it’s easy to forget that much heritage success came from early monopolies and a lack of competition. Indeed, some of the current success comes from the momentum of that past.

I think whether you’re a hundred years old, or a new startup, you need to be firing on all cylinders across content, marketing and distribution - anything less, and it’s going to be hard to be a media hit.