Apple confirms push into content

Apple will roll out originals for its Apple Music service throughout the year and has hinted at far wider content plans as the media landscape continues to shift.

Apple CEO Tim Cook

Apple CEO Tim Cook

Speaking on the tech giant’s fiscal first quarter earnings call, CEO Tim Cook said the company is learning a lot about the original content business and is “thinking about ways that we could play” in that space.

He also cited changes to the media industry and said that he expects Apple’s participation to accelerate as the cable bundle begins to break down, with its Apple TV set-top providing a firm grounding for doing so.

“In terms of original content, we have put our toe in the water with doing some original content for Apple Music, and that will be rolling out through the year,” said Cook. “We are learning from that, and we’ll go from there.”

Referring to Apple’s set-top box offering, he said: “We started the new Apple TV a year ago, and we’re pleased with how that platform has come along. We have more things planned for it but it’s come a long way in a year, and it gives us a clear platform to build off of.”

Referring to a third tenant to Apple’s media strategy, he cited Apple’s ‘services’ business – which includes revenue it earns from selling and distributing digital content, services or subscriptions through the likes of the App Store, iTunes and Apple Music.

For the three months ending December 31, 2016, Apple said that its services business experienced its “best quarter ever” with revenues climbing 18% year-on-year to US$7.17 billion.

“Services are becoming a larger part of our business, and we expect the revenues to be the size of a Fortune 100 company this year,” said Cook.

“Our services offerings are now driving over 150 million paid customer subscriptions. This includes our own services and third-party content that we offer on our stores. We feel great about this momentum, and our goal is to double the size of our services business in the next four years.”

The comments came as Apple reported all-time record quarterly revenue of US$78.4 billion and earnings per diluted share of US$3.36 – up from US$75.9 billion and US$3.28 a year earlier.

“We’re thrilled to report that our holiday quarter results generated Apple’s highest quarterly revenue ever, and broke multiple records along the way. We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch,” said Tim Cook.

The results mark the first full quarter since the launch of the iPhone 7 in September. Apple said that the iPhone had a “tremendous quarter thanks to exceptional demand”.

Earlier this month, reports claimed Apple is planning to make a major push into original content, making TV show and movies that will be available through its subscription streaming service Apple Music.

Meanwhile, on Apple’s previous earnings call in October, Tim Cook said that he has an “intense interest” in television and claimed there is “great opportunity” for the company to create and own content.