Sitting upon a mountain of cash, Apple could be getting serious about investing in creating original content to support its Apple TV and entertainment offerings. In what now seems like a casual conversation between Eddy Cue, Apple's senior vice president of internet software and services and overseer of iTunes, and Time Warner's Olaf Olafsson, head of the entertainment giant's corporate strategy, the idea excites many.
If realized, Apple would become second in size only to Disney in the entertainment arena by acquiring the media company that owns the Warner Bros. movie studio, CNN and HBO. Imagine the creative possibilities of Apple and HBO as content development dance partners alone. Add Time Warner's storytellers from DC Comics, Harry Potter, Hanna-Barbera and Looney Tunes brand franchises to the party, and there would be dancing on the ceiling.
An Apple Time Warner combo would offer too many content development possibilities for this executive producer by day and entertainment junkie by night to ponder here, so allow me to focus on the Apple and HBO dynamic. With brand cultures that are so similarly driven, such a partnership would be kismet and prolific.
My explanation for Apple's attraction to adding original content creation to its core (pun intended) offerings is that competition is gaining on Apple in a rapidly maturing smartphone market, and Apple realizes this.
Stagnating in a smartphone market is stupid.
Unless Apple has a truly game-changing innovation on the horizon for high-end consumers, or a high-value, low-cost strategy for emerging markets, Apple staying on its current smartphone course will prove to be a not-so-smart idea. Apple will stagnate further without a dynamic change in smartphone strategy.
Alcatel and Samsung now offer water-resistant phones, among a few others brands. Yet, Apple has yet to announce one. Alcatel has also launched exciting, stylish and flexible technology with value pricing for first-time smartphone buyers. I would love a water-resistant phone after experiencing the emotional pain of jumping into a swimming pool with an iPhone in my bathing suit pocket.
Apple will continue to get squeezed like fruit in a juicer as both its cool factor on the high-end and value price point margins on the low-end of the market shrink rapidly.
Apple may well be on its way to achieving lifestyle brand status across the U.S., in large swaths of Europe and pockets of Asia, but that success will not translate to most emerging markets. In fact, Apple has long struggled to find fertile ground to plant seeds in many emerging markets, including China. CEO Tim Cook made a recent pilgrimage to India in hopes of sparking interest in Apple smartphones there.
Alcatel and other Apple competitors appear to have stronger offerings at better price points for first-time smartphone customers. Perhaps more importantly, Alcatel and other competitors understand consumers and cultures in emerging markets better than Apple.
No one disputes Apple's success with first world technical elites, but earning the loyalty of multicultural smartphone newbies in Latin America and elsewhere is another. Lifestyle brands are a much harder sell in developing countries where many struggle just to make a living wage.
Perhaps that's why Apple is considering content development to pump up its lifestyle brand and expand its entertainment offerings. If I had to choose between stagnating in smartphones and content development for a lifestyle brand, I say go HBO GO.
It's not television, it's HBO.
In 1996 HBO launched a tagline, "It's not television, it's HBO". It was more than a tagline, but a perfect reflection of its brand promise to deliver something far better than the industry standard to customers willing to pay up to tune in. HBO lived that brand promise by empowering show producers to create bigger and better spectacles for discerning audiences.
Over the years, HBO empowered an internal brand culture that produced innovative, timeless classics such as Band of Brothers, The Sopranos, Oz and The Wire. Today critics are calling shows like Silicon Valley, Veep and Game of Thrones another golden age for HBO.
As other networks raised their game to compete, HBO kept breaking new ground. Even as streaming video services rose to prominence cutting into cable industry profits, few realized HBO still makes more money than Netflix.
HBO is so good that in a record Emmy-winning year for competitor Showtime, a single HBO show, Game of Thrones, eclipsed Showtime's Emmy count by double digits. Like Apple, HBO owns the high-end of their marketplace.
Think Different. Produce Better.
Meanwhile, Apple's own brand culture kept challenging their internal talent and external customers to think different. Both Apple and HBO were already dance partners, they were just performing on different dance floors.
Through obsessive attention to detail and quality of both Apple technology and HBO productions, new generations of storytellers were inspired to think different and produce better. I would love to see what Apple and HBO could create together. Dance away.