After iPhone X launched, Apple caught attentions again by its giant deal with Mr. Spielberg’s Amblin Television and Universal Television, a unit of Comcast Corp.’s NBCUniversal, to make new episodes of “Amazing Stories,” a science fiction and horror anthology series that ran on NBC in the 1980s.
The budget for “Amazing Stories” will be significantly more than $5 million an episode, higher than most broadcast shows but on par with budgets of high-end shows on Netflix, HBO and some cable networks, according to an executive involved in the project.
In the recent years, a tendency shows that more and more giant tech companies are moving their steps into Hollywood. Like Apple did, Facebook is signaling that’s ready to spend a bundle on original TV-style content — upwards of a billion bucks in the next year, according to an anonymously sourced report in the Wall Street Journal. Netflix owned by Amazon, has inspired Original Shows development among video stream platforms in 2013 by its successful show – House of Cards. Young video service provider Hulu.com has made its great show – The Handmaid’s Tale which just won 5 prizes from the 69th Emmy Award.
It is very obvious that all these tech companies want to make their networks much tighter. The business cycle is turning around from the start again: the platform seems to become not enough for maintaining users. Instead, the content will finally be the key to win the users back.
The benefits of investing TV shows are quite apparent:
1. Enlarge the ecosystem of the platform
Apple’s efforts on their ecosystem can be seen from the age of iPod. iTunes is like a prototype to enlarge the ecosystem from Apple. The users can download music, listen to the radio and podcast on their iPods. To some extent, iTunes has provided the users more access to contents. Later, products like Apple Music and Apple TV, are trying to enlarge the ecosystem to music lovers and movie lovers. Therefore, original TV shows are valuable in the ecosystem for attracting more users and keep the current ones, especially for Apple TV.
I assume the same strategies behind Amazon and Netflix. Currently, Netflix and Amazon memberships are separate. However, Amazon has been putting its foot into enlarging their ecosystem that they have developed Amazon Prime Video and released Fire TV to compete with Apple. One day if Netflix and Amazon share one membership, the network effects are pretty strong and solid.
2. Strengthen the network effects
The good example here is the legendary case of HBO creating Games of Thrones. Although HBO was not in a digital business before, it has succeeded to create new networks among HBO audience. The success of Games of Thrones has leaded HBO to move the core business to video stream instead of cable. Despite having millions of fewer subscribers, HBO’s operating income for 2013 was $1.8 billion, compared to $228 million for the year at Netflix. The video stream model, together with the show, has brought HBO huge amount of younger customers and made its networks of the audience more loyal by combining the platform of cable and online.
3. Content is future
As I claimed before, content again becomes the key to attract and maintain the users cause it is harder to imitate. Platform building costs time but it lacks protection from the idea stealing. On the contrary, TV shows have copyrights and relevant legal terms to guarantee its uniqueness. Imitation game is not strange in the digital world: Messaging Apps, E-Commerce, Video Stream model… etc. Nonetheless, TV shows have a chance to stand out for it is more close to art.
To sum up, Silicon Valley’s battle in TV shows just started. As an audience, I believe the winner actually will be the public for the battle is going to bring us more great shows!
Statistics of Original Shows in 2016: