Disney CEO Bob Iger has stepped down from the Apple board and it is a big statement on what the future holds. In a way, it shows the degree to which Apple is getting into Disney's business of original content, but also it signals how the content and distribution facets of the media business are converging.
The media biz has always been about how they made friends and evolving alliances which makes for tricky navigation even in quiescent times. But the current environment has been particularly marked by turmoil and the appearance of rocky reefs and shifting shoals.
In the case of Disney, the trouble comes from Apple, while with AT&T, a Wall Street firebrand and an old-fashioned carriage skirmish are to blame.
It started when the Apple Watch kept defaulting to a Toy Story motif. It made sense because Toy Story is a Pixar property (a unit of Disney), and Disney and Apple have been practically related since Steve Jobs sold Pixar to Disney for US$ 7.4 billion in 2006. The all-stock deal made Jobs Disney’s largest shareholder and took a seat on Disney’s board.
And thus began a cozy relationship between the two companies that extended up to and beyond Steve Jobs' death in October of 2011 and Iger joining Apple’s board one month later.
Disney was the first studio to sell TV shows and movies on the iTunes store for instance. Disney revamped its stores to make them look more like Apple’s. And Jobs, Iger and Tim Cook have lavished praise on each other.
With the announcement of Apple TV+ recently, a streaming subscription service with Apple-produced original movies and TV shows, Apple has planted its flag squarely in Disney’s turf. Producing original programming is not the business of a hardware company, or a software company, or a platform. It’s the business of a media company, a la Disney.
However, it is even more pointed than that. Debuting on 1 November at US$ 4.99 a month, (and, in an aggressive leveraging of its ecosystem, free for a year if you buy an Apple device) Apple TV+ comes out before and undercuts Disney's streaming service offering which arrives on 12 November at US$ 6.99.
Iger acknowledged this discomfort, but had characterized streaming conflicts mostly as a potential problem since it "has not been discussed all that much" by the Apple directors. But that changed. In this flywheel era, and as service becomes more and more important to Apple, one part of the business is increasingly connected to another, it became untenable for Iger to simply recuse himself from specific discussions.
It should not be forgotten that with a trillion dollar market cap, Apple could easily buy Disney, (worth only US$ 247 billion) in a heartbeat. "We think a big acquisition is on the horizon," Wedbush analyst Dan Ives says about Apple. A Disney deal would be a big lift. More likely is the winding down of what had been an unusually close, business buddy act.
Not that Apple and Disney will completely disconnect. In the media world, it's bad business not to do business with everyone.
The media biz has always been about how they made friends and evolving alliances which makes for tricky navigation even in quiescent times. But the current environment has been particularly marked by turmoil and the appearance of rocky reefs and shifting shoals.
In the case of Disney, the trouble comes from Apple, while with AT&T, a Wall Street firebrand and an old-fashioned carriage skirmish are to blame.
It started when the Apple Watch kept defaulting to a Toy Story motif. It made sense because Toy Story is a Pixar property (a unit of Disney), and Disney and Apple have been practically related since Steve Jobs sold Pixar to Disney for US$ 7.4 billion in 2006. The all-stock deal made Jobs Disney’s largest shareholder and took a seat on Disney’s board.
And thus began a cozy relationship between the two companies that extended up to and beyond Steve Jobs' death in October of 2011 and Iger joining Apple’s board one month later.
Disney was the first studio to sell TV shows and movies on the iTunes store for instance. Disney revamped its stores to make them look more like Apple’s. And Jobs, Iger and Tim Cook have lavished praise on each other.
With the announcement of Apple TV+ recently, a streaming subscription service with Apple-produced original movies and TV shows, Apple has planted its flag squarely in Disney’s turf. Producing original programming is not the business of a hardware company, or a software company, or a platform. It’s the business of a media company, a la Disney.
However, it is even more pointed than that. Debuting on 1 November at US$ 4.99 a month, (and, in an aggressive leveraging of its ecosystem, free for a year if you buy an Apple device) Apple TV+ comes out before and undercuts Disney's streaming service offering which arrives on 12 November at US$ 6.99.
Iger acknowledged this discomfort, but had characterized streaming conflicts mostly as a potential problem since it "has not been discussed all that much" by the Apple directors. But that changed. In this flywheel era, and as service becomes more and more important to Apple, one part of the business is increasingly connected to another, it became untenable for Iger to simply recuse himself from specific discussions.
It should not be forgotten that with a trillion dollar market cap, Apple could easily buy Disney, (worth only US$ 247 billion) in a heartbeat. "We think a big acquisition is on the horizon," Wedbush analyst Dan Ives says about Apple. A Disney deal would be a big lift. More likely is the winding down of what had been an unusually close, business buddy act.
Not that Apple and Disney will completely disconnect. In the media world, it's bad business not to do business with everyone.
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