And the academy award goes to… Apple?

And the academy award goes to… Apple?
Is Apple preparing for a serious streaming push?
Paul Allison, CFA
Published
March 30, 2022

Anyone able to look beyond the on-stage drama during this week's Academy Awards ceremony might have noticed the night’s accolades belonged to the streamers, and not Hollywood’s old guard.

Netflix is now used to rubbing shoulders with movie royalty, but this year’s awards saw a notable and bold red carpet entrance from Apple

CODA, an Apple TV+ original, collected the award for Best Picture and might just be a signal of the firm’s intentions in streaming.

No one knows how many players the streaming industry will ultimately support. Netflix is the undisputed leader, and Disney has gone all-in on over the last few years.

There are a plethora of services from media companies like Comcast’s Peacock, Time Warner’s HBO and other smaller players such as Paramount Plus and Discovery Plus too.

Then there’s big tech.

Netflix's $33bn in sales last year is a drop in the bucket for the giants, and streaming isn’t exactly a profit bonanza. After accounting for $13bn or so in programming expenses, Netflix is still burning cash. 

So what’s the point?

Well, beyond being a nice sideline for the tech majors, there is strategic rationale for their participation in the business.

Amazon has 200m Prime subscribers and an enormous amount of IT infrastructure to leverage. Alphabet is an advertising-driven business and YouTube streaming is a natural extension of its model.

And there are other larger motivations. Amazon’s Prime business is about offering more services to its members, allowing consistent price increases. Prime Video is one such added service.

Alphabet has long-held ambitions to build a fibre optic network across America, giving it better control over access to the internet and direct relationships with consumers.  

But up to now, Apple’s push into streaming has felt a little half-baked. It has historic ties with Hollywood and is consumer-facing, but beyond that, it’s not clear where streaming would come in. 

Apple certainly has the firepower to disrupt. The firm generates around $100bn a year in free cash flow. Right now most of that is being returned to shareholders through dividends and stock buybacks but if the company decided a serious push into streaming was a good use of funds, it could certainly afford it.

CODA might have been a one-off, and while Apple isn’t yet a protagonist, it sure feels like the company has a part to play.

Perhaps M&A will be added to the script?

Tech and media have coupled up in the past, famously in the early 2000s with AOL and Time Warner. That particular marriage ended in spectacular failure but a lot has been learned since the early days of the internet explosion, and the foundations for an enduring partnership might be more firmly in place.  

Sign up to Honey by Freetrade, our market newsletter.

Join the discussion BHP Group, Persimmon, Just Eat, UK Inflation

See the most popular investments with a breakdown of the most traded stocks and most popular ETFs on Freetrade. Follow the IPO calendar and keep an eye on exciting new investment opportunities.

Important Information

This should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice.

When you invest, your capital is at risk. The value of your portfolio, and any income you receive, can go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future results.

Eligibility to invest into an ISA and the value of tax savings depends on personal circumstances and all tax rules may change.

Freetrade is a trading name of Freetrade Limited, which is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales (no. 09797821).

Related articles

Most read

Simple pricing plans

Choose how you'd like to pay:

Annually

Save 17%

Monthly

Annually

Save 17%

Monthly

£0.00/mo

Accounts

GIA pink
General investment account

Benefits

  • Commission-free trades (other charges may apply. See full pricing table.)
  • Trade USD & EUR stocks at the exchange rate + a 0.99% FX fee
  • Fractional US Shares
  • Access to more than 4,700 stocks, including the most popular shares and ETFs
  • 1% AER on up to £1,000 uninvested cash
£4.99/mo

£59.88 billed annually

£5.99/mo

Billed monthly

Accounts

GIA white
General investment account
ISA
Stocks and shares ISA

Benefits
Everything in Basic, plus:

  • Full range of over 6,200 US, UK and EU stocks and ETFs
  • Trade USD & EUR stocks at the exchange rate + a 0.59% FX fee
  • Automated order types, including recurring orders
  • Advanced stock fundamentals
  • 3% AER on up to £2,000 uninvested cash
£9.99/mo

£119.88 billed annually

£11.99/mo

Billed monthly

Accounts

GIA white
General investment account
ISA
Stocks and shares ISA
SIPP white
Self-invested personal pension (SIPP)

Benefits
Everything in Standard, plus:

  • Trade USD & EUR stocks at the exchange rate + a 0.39% FX fee
  • Priority customer service
  • Freetrade Web beta
  • 5% AER on up to £3,000 uninvested cash

Download the app to start investing now



When you invest your capital is at risk.