Streaming in 2025

What's the most annoying thing about streaming? Is it the incredible convenience or ability to play, pause, and rewind from your smart home device? Probably not. It's the issue that cable TV addressed. All of your shows were in one place. Prime, Netflix, Apple, Peacock, Disney +, Hulu, HBO Max, Discovery +, and others all have shows and movies that others do not. Right now Movies Anywhere is partially solving that problem but only if you own the movie. Who wants to own thousands of movies anymore?

Netflix has paved the way for other streaming platforms while setting the bar for original content very high. However, their business model is not one that includes re-runs of The Office (or many popular TV shows) anymore. This is obviously a viable business model and will continue to work. However, it leaves a gaping hole in the market, as it was only a few years ago Netflix was the place to go and watch old TV shows & movies. Enter: Apple

Apple introduced the TV app in 2016, and while I personally didn't use it, I am familiar with the concept. It acts as a single sign-on tool and a search tool. If you search for a show, it searches many streaming sites and if you have a sign in for them, it will present you with a free option to watch your show.

In the next 3-5 years, two things are going to become increasingly clear. Having an established user base will be priceless, and the volume of content will be more important as another >4 million people cut the cord every year and by 2025 the number of cable households will be near even to the number of cord-cut households.

Getting a high volume of content is essential to be the best cable replacement. Buying cable companies isn't a direction I'd go, but becoming the exclusive streaming company is a direction to go. Apple's yearly revenue is >10x that of Netflix, that's important because Netflix held roughly $24.5 billion of licensed content on their books in 2019. Imagine if Apple held even 3 times that (they would never carry that much in licensing but just for argument), what the Apple TV+ product would look like? They could likely get the content from Discovery +, Hallmark, Crackle, Tubi. I know it seems like a weird place to start, but they can get the most bang for their buck with cheaper content. The smaller companies fly under the radar, but they still have exclusive rights to some solid content, and some even have originals. The key is to pay the extra amount to have exclusive rights for the high-value content, that is, assuming Apple doesn't want to spend the money to buy it.

Apple has already made a fantastic move to buy the Tom Hanks directed movie Greyhound, a movie that would have landed in theaters from Sony for $70 million, proving they aren't afraid to spend money on the product. The real ace in the hole is sports. If Apple can land the rights to sports, they can build the best streaming platform available. Just as a reference point, the contract ESPN has with the NBA is just under $3 billion a year for nine years. I wouldn't expect Apple to sign a large agreement with a major sports league like that, but simulcasts for major events would be the first step. Getting exclusive rights to any small league is going to get users, and like I mentioned users are priceless, they are the currency. The strategic play is eSports because it's the fastest growing sport right now, the market size CAGR is 24.4% from 2020-2027 and they can get exclusive rights for a good deal. They just need to hurry. Amazon's been playing in this sandbox for a long time now and is already streaming some NFL games. Amazon also owns Twitch, which is the gold standard for video game streaming.

Finally, I'm surprised that we haven't seen a Pandora-type tv station generator for any of the major streaming sites. I envision that feature as being something that will tip the scales for whoever develops it. Nearly everyone I know has the TV on in the background while they go about their day. Imagine for a moment you could tell your streaming service to create a TV station built off of a mindless show like House Hunters or something you've seen one million times like The Office. The next big streaming company needs to be cable without the cable. It still needs to release original content but shouldn't be primarily focused on it, and Apple is positioned well to do so.