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Apple's announcement that its next Apple TV + service will feature "a dozen original programs" when it launches in the fall puts it in a dead-end situation in the short term, analysts said. They believe that Apple can succeed in the long run, but the company will have to be willing to spend huge sums for years to achieve it …
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Internal business saw Morgan Stanley's investor rating, noted for its overall dynamism in the company's business.
Apple must have the appetite to spend huge sums for years – without generating a lot of revenue in return – to reduce the show. […]
The media sector will not be the same instant success for Apple. He faces the huge expense of recruiting top talent and producing new video content from scratch, with no guarantee of success. Apple TV Plus could be in the red for years before touching a critical mass of users to make it durable on the bottom.
Such excessive spending is necessary because without the content, users simply would not pay to register. You would not want to subscribe to a paid streaming service with only three shows and a dozen movies – there must be a key level of content before the whole business becomes viable. It means spending a lot of money.
Morgan Stanley quoted Netflix as an example. The bank estimates that Netflix will have spent $ 13 billion to generate a profit.
The note recognizes that Apple can do it.
Apple launches into the content publishing industry with two distinct strengths: a global user base and a massive checkbook.
But he will have to be willing to spend a lot of money and accumulate a lot of losses along the way.
We do not know yet how Apple intends to persuade people to subscribe to the service. It presents Apple TV + as "the new home of the most creative storytellers in the world" and has already aligned several big names, but with extremely limited content, it is unlikely that many are willing to pay much when it is launched. Apple has not yet revealed its expected price.
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