Consumer electronics giant Apple (AAPL) has ordered a cornucopia of original television series, but has yet to disclose how it plans to offer that video content to viewers.
X"Apple has assembled a surprisingly large slate of original content for its OTT (over-the-top) video services, but the distribution strategy remains unclear to us," Macquarie Capital analyst Benjamin Schachter said in a report to clients Friday. "Apple may aim for the largest possible audience across all devices and operating systems, or keep its video exclusive to the Apple ecosystem."
It has ordered shows from media mogul Oprah Winfrey, actress Reese Witherspoon, noted directors Steven Spielberg, J.J. Abrams and Damien Chazelle, and others. News media reports indicate Apple could spend about $1 billion on content this year. The Cupertino, Calif.-based company is widely expected to launch a streaming video service next year.
"Apple may duplicate what has worked for iTunes and Apple Music and make its video content available across all devices and operating systems, potentially as an add-on to existing Apple Music subscriptions," Schachter said. "However, Apple may instead make its video exclusive to its own hardware ecosystem."
The latter would give Apple hardware owners more reasons to stay in the Apple ecosystem. But it would limit the scale of the Apple video service, he said.
Apple Video, Music, Magazine Bundle Considered
Schachter reiterated his outperform rating on Apple stock with a 12-month price target of 197. Apple shares dipped 0.2% to 185.11 on the stock market today.
Apple stock hit an all-time high of 194.20 on June 7.
The Information reported Wednesday that Apple is considering a subscription bundle that packages its music streaming, magazine and upcoming video-on-demand services. That strategy would be similar to Amazon's (AMZN) Prime service, which includes video, music and some news, The Information said.
A bundle would help Apple differentiate its offering from streaming music specialists like Spotify Technology (SPOT) and internet television networks like Netflix (NFLX).
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