Grey clouds gather over Apple as Netflix snubs imminent streaming service

Apple is on the verge of announcing something big, but its TV streaming ambitions have been undermined as Netflix dismisses any tie-up with the iLeader.

Speaking at a press event at the streaming giants HQ, CEO Reed Hastings said Netflix would not be partnering with Apple or allowing its content to be hosted on any streaming service it might announce. There are a lot of unknowns about the Apple announcement on March 25, but at least this has been cleared up.

Rumours suggest Apple is going to create a streaming platform which could potentially compete against Netflix, though this is only one facet of the increasingly fragmented content landscape. With Disney and AT&T’s WarnerMedia also set to weigh-in, consumer frustrations are unlikely to be relieved any time soon.

With content becoming increasingly fragmented, a platform which brings everything together could be the winning formula.

“Content aggregation is the holy grail,” said Paolo Pescatore of PP Foresight. “There is too much fragmentation in video/TV; no-one wants to sign up to different services and have numerous apps. It is a disastrous experience.

“Beyond having the right content, the user experience is key. This means getting the content people want in one place, with one bill, universal search and all that jazz. In reality, this is hard to achieve as typically half of a household wants sport and the other half want entertainment, movies and kids shows.

“Netflix has done a great job to date. However, more content and media owners will pull programming off its offering. This represents a significant opportunity for the likes of Apple who has scale and greater resources. There is a role for a small number of players in the future.”

One question which should get a lot of people thinking is what does an effective content aggregator platform look like?

However, just because it is easy to set out the conditions for an excellent content aggregator platform, doesn’t mean it will a simple task to figure out. The final point, getting the buy-in from the content owner/creator ecosystem, is where anyone with such grand ambitions will find the biggest issue.

The best effort we have seen so far is Sky in the UK. Why? Because it has somehow managed to convince Netflix to let its content be hosted on the Sky discovery platform not its own.

Some might suggest a disproportionate amount of news in the content world is focused on Netflix, but there is good reason for that; Netflix is the best. Few can compete with the current depth and breath of content, the user experience, marketing clout and foresight of Reed Hastings and his team.

Without Netflix on an aggregator platform, there does seem to be a big hole. One of the issues is Netflix does not like handing across the experience associated with its assets to partners. It knows how to keep its subscribers happy so why would it allow a partner to potentially tarnish this reputation.

This is what has made the Sky partnership all the more impressive. Netflix has allowed its assets to be hosted alongside Sky’s on Sky’s discovery platform, marrying two of the best content libraries available to UK consumers in the same place. This is the sort of partnership which ticks all the criteria listed above.

Sky has made an excellent start on the aggregator model, but it needs to continue to add new partnerships, increasing the depth and breadth of its content library to ensure it continues to dominate the premium TV space. Amazon Prime should be a key target.

An interesting development over the next couple of months will be the impact of Disney’s streaming proposition. It will put a dent into Netflix, but how much remains to be seen. Disney does not have the depth or breadth of content Netflix is able to offer, the ‘originals’ and the newly generated local content around the world take it to another level, though Disney will be an excellent partner to have.

We do not want to decide on the Apple streaming proposition until we have had a chance to actually see it but losing Netflix as a potential partner is a significant dent. However, as long as gathers the buy-in from enough partners, creating a proposition which ticks all the criteria we have listed, there is hope for Apple is the services arena.