“Before he became a tech mogul, IAC and Expedia Group chairman Barry Diller was a media mogul, working in executive roles at ABC, Paramount, and Fox. But now, he says, the people who used to have all the power in the entertainment business have a lot less,” Eric Johnson reports for Recode. “‘Hollywood is now irrelevant,’ Diller said on the latest episode of Recode Decode, hosted by Kara Swisher.”
Among many other things, Diller spoke of Netflix, Amazon, and Apple and the company’s widely-expected streaming content service:
Diller: Amazon’s model is saying, “If you join Prime, we’re giving you things. So our job is to get you to join Prime. If we can get you to do that by giving you Black Panther, or whatever, or The Marvelous Mrs. Maisel, then great.” But that model, to people in the entertainment business, is like, “Oh my god, how did that happen? I don’t know how to do that one. I don’t know how. I only know how to serve my entertainment customer. I have no idea how to get somebody to join Prime, to do this, to get my end product which is a creative thing.” Anyway, that…
Swisher: Right. So where does that lead, because Apple is now moving very heavily into it after…
Diller: Well I wouldn’t say they’re heavily yet.
Swisher:Not heavily, but more. There’s money.
Diller: Well, they’re prancing around. They have their little feet in it. They’ve hired some people. They’re spending some money, but they do not have at least yet, although they’re going to announce something I think very soon or start their streaming service.
Everybody is going to play in this, but I think that those who chase Netflix are fools. Or try to compete with Amazon Prime, because I don’t think there’s any ability for anybody in the, let’s call it the media business, the entertainment business, who do so. And I’m not saying that other people can’t build services. Disney has good programming.
Swisher:They’re starting their streaming. Right.
Diller: They’ll get some subscribers. But to chase… Netflix has won this game. I mean, short of some existential event, it is Netflix’s. No one can get, I believe, to their level of subscribers, which gives them real dominance. They can outbid, and do…
Swisher:And they do.
Diller: …anyone, and they will continue to do so.
Much more in the full article here.
MacDailyNews Take: Netflix most certainly can be caught. And passed. And outspent. By Apple. Easily.
Note: Apple has more cash on hand than Netflix is worth – $100 billion more.
In the fourth calendar quarter of 2018, Netflix posted revenue of $4.19 billion. In the same quarter, Apple posted revenue of $84.3 billion.
Netflix’s annual net income for 2018 was $1.211 billion. Apple”s annual net income for 2018 was $59.53 billion.
These companies are not in same league. They’re not even in the same solar system.
Diller clearly doesn’t grasp the size of Apple or the massive size of their installed base. There are more than 1.4 billion active Apple devices worldwide. iPhone alone last quarter surpassed 900 million devices with growth of nearly 75 million in the last 12 months alone.
You’d think Diller would be able to do basic math. Alas, his feckless statements reveal otherwise.
Diller’s comments have been iCal’ed for future use along with these gems:
• “We are not at all worried. We think we’ve got the one mobile platform you’ll use for the rest of your life. [Apple] are not going to catch up.” – Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008
• “There’s an old saying — stick to your knitting — and Apple is not a mobile phone manufacturer, that’s not their knitting… I think people overreacted to it — there was not a lot of tremendously new stuff if you think about it.” – Greg Winn, Telstra’s operations chief, February 15, 2007
• “The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant… Apple is unlikely to make much of an impact on this market… Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.” – Matthew Lynn, Bloomberg, January 15, 2007
• “The economics of something like [an Apple iPhone] aren’t that compelling.” – Rod Bare, Morningstar analyst, December 08, 2006
• “We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.” – Ed Colligan, Palm CEO, November 16, 2006
Barry Diller is a dinosaur of the entertainment business, as is Michael Eisner et al.
Cook, Cue, and Schiller are just stooges. Not very hard to see that, after 8-years of mismanagement in Cupertino.
I’m more in line with MDN’s take on this one. Netflix can be caught and buried given how much money Apple has at its disposal to do so. Not overnight obviously. Who knows that they will announce or how good it will be. I’m not currently thinking I’ll sign up for yet another steaming account but will see. If Apple raises the costs for Netflix just by bidding against them, Netflix could turn unprofitable fairly quickly.
It can go either way. If the question is “CAN Netflix be caught/beat?” the answer is yes. But it’s not simple.
What apple proved with their phone is that all the revenue and all the market share can be outmaneuvered by a better design/ idea. Claiming Apple could do this because of their big revenue and installed base is hubris that is directly refuted by Apple’s own history.
I did say “can” and not “will”, only the latter of which would be hubris given that Apple has not yet announced their offering.
That said, Apple will likely have a modicum of success at the very least and in so doing, will put financial pressure on rivals. It’s the studios that likely have the most to lose if they decide not to team up and continue making their wares readily available.
Netflix does not have a bottomless pit of cash and they haven’t always been cash positive. I do hope they continue to survive though and that Apple is a complimentary service rather than a competitive one. Will see soon enough.
I’m just going to leave this right here, Barry…
Not sure entertainment is the right fit for Apple. Entirely different game and a fickle market. Almost like a gender change which seems to be popular these days.
Apple’s success was based on its magical devices and software.
The luster is gone. It will continue to be big company for a few more years and will become irrelevant at some point.
And they can barely manage to stream music, much less video. Is live streaming of their dog and pony shows still outsourced? On top of that you get enough Hollywood Wingnuts under one roof and the first thing they will do is go on strike because AppleEvil Corp. isn’t giving them enough of a cut. It might work out, but it all looks like a quagmire to me.
There was a time when Apple set the pace and direction of consumer adoption of digital devices and software. Other companies were forced to follow and when unable to keep up, Microsoft, and Google even resorted to wholesale pilfering of Apple technology and software innovations. Now, what a comedown for Apple when it is forced to follow companies like Netflix and Amazon.
You bring up a good point. Netflix, Amazon and even Google have invested huge amounts of money on streaming infrastructure. Unless Apple steps up and also builds out their infrastructure it may be hard to compete cost-wise since they will most likely end up paying one of the others to host all the content Apple expects to stream reliably. Heck, to rub it in those same companies could take all that money Apple pays them to lower their own prices or at the very least maintain the current price for longer before raising it again. Apple is not in the habit of running their own servers at the scale of the others. This may have to change for streaming services not becoming a money pit for Apple.
This old Ed Colligan quote still says it best for those refusing to accept change or the inevitable:
“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”
– Ed Colligan, Palm CEO, November 16, 2006
YES! And similar things have been said about many different Apple products.
Please: just STFU troll.
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Apple is not a PC guy anymore.
Apple has abandoned the PC and become just a METOO follower of Amazon and Google on an unfamiliar and constantly heaving landscape.
Additional subscription to Apple’s existing iCloud/Music paid user base, and see the money come VERY in fast. I would cancel my netflix at least for a year in a heartbeat.
If no profit is your goal then, you can be Netflix…
Read the article: Netflix’s annual net income for 2018 was $1.211 billion. That’s not bad…
For Apple 1.211 BILLION FOR THE ENTIRE YEAR IS NOTHING….not profitable just a distraction.
Considering Netflix is focused primarily on video content delivery you’ll have to compare only Apple’s income in services to Netflix to make it meaningful. Try not to compare the company that makes only electric engines to an electric car maker.
Whatever Apple does there will be many naysayers. It’s so different for Amazon. Amazon is going after both UPS and FedEx but Wall Street doesn’t think this will be any problem for Amazon. However, Apple certainly has what it takes to be competitive with Netflix but Apple isn’t given any chance at all. What makes Apple always considered to be so weak. I doesn’t seem as though Apple’s business model is that terrible and they certainly have enough cash to do whatever is necessary. It must be because of Tim Cook being seen as an incompetent CEO where Jeff Bezos isn’t seen that way.
Apple never seems to get any respect or be given the benefit of the doubt and I don’t quite understand that. One of the comments mentions how Apple can only do ‘magical’ hardware but will never be successful at anything else. It’s a company that can buy talent or expertise, so why should Apple only be able to master one thing.
@seven
Pull it out your ear. We know you’re just a fanboy. Don’t they have a site for you?
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@wrong again, your bigotry is showing!!
Had a dog named Snarky. He ran off to join the MDN circus.
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There is no secret to Netflix, Amazon, or Spotify just give it away….
Don’t know if Apple will surpass Netflix, but yes they will be surpassed. If, Disney, ABC, Warner, etc., tak away their content, Netflix will go down and maybe disappear
Exactly. It’s all about the content, which is why Netflix is spending so much, literally throwing money at content producers to see what, if anything, will resonate with audiences.
If studios pull their A titles from Netflix, Netflix WILL tumble…
At the same time all those studios for at least a good while will lose a good source of income. It is unlikely that the same consumers that were subscribing to Netflix would shell out more total to pay for each individual studio’s streaming service. Like cable, In addition to the A-list titles, I’m sure Netflix is ‘forced’ to pay for a package of content that those studios find are otherwise very hard to monetize.
Nailed it. And imagine if/when Apple opens up their petty cash and buys Disney. And then makes Disney’s content exclusive to Apple’s service. Game over.
Apple has shown it doesn’t really do software that well. The list is endless. Some products are fine but the whole iWork Suite is a joke at best. iTunes is an absolute interface mess and none of them are really polished or customizable in any significant way. Apple COULD buy Netflix and probably should. Their efforts thus far in direct entertainment are beyond embarrassing and in home assistants they lost their way BADLY about four years ago. They built a nice headquarters.. wonderful monument to Steve… but it distracted management hence the shakeup at the top as they realize they really only have ONE shot at Augmented Reality to get it right. I have serious doubts their streaming service will be any better than Apple TV being the “one way’ people get to their shows.. that’s just laughable. I hope MDN iCal’d that one from Tim. I have high hopes. I love Apple. It made me wealthy. But I’m watching the stock price and will jump out above $200 this time. Too many odd decisions, disordered priorities and missed opportunities now.
Buy Netflix so that you can give it away to the tune of 200 billion dollars, Dumb…..