Apple TV: content is still king

An Office Hours question asked by Frederick H., July 31, 2026.

Q: What is the reason for the obsession with making movies and TV shows? There must be a strategy behind this.

It's one of those things you get enlightened on after thinking about it for three years, and then it comes together: wait a minute, maybe it's much simpler than I thought. As a strategy thinker, you look at Apple TV and say: if they hadn't done this, then all the content would have been locked up in silos, and you'd have no access to those silos. This was happening already — old titles, movie libraries, TV libraries were being vacuumed up and aggregated into huge piles. People were buying all these rights and locking things up. I remember I used to be able to download, on Apple TV, shows like Big Bang Theory or Seinfeld, and then they just weren't available anymore. Somebody bought them up and locked them away and said: you need to sign up with Amazon to get your favorites, or to get old movies, new movies, whatever.

So Apple said: if that's the way it goes, we're not going to go around trying to buy all these old movies. That's not our way. We're not going to buy content libraries. Instead, we're going to make our own. You literally start with zero, and you build up your own library. The question then is how much you spend, how big it is, what kind of movies. The decision, I think, Tim Cook made was: quality first. And how do you measure quality? Awards — because that's the only metric that exists if you can't measure usage. You don't have box office, and you don't have distribution in theaters. You're never going to get the user numbers, because you'd have to build up a huge chicken-and-egg: buy a huge library, get a lot of users, and then you can say it's the best-selling, or it's the most popular. That doesn't work in streaming. Everything's siloed, everything's compartmentalized, so the ratings make no sense anymore. What you do instead is go for some artificial measure of quality determined by some group of experts, supposedly. Unfortunately, there's no other metric for quality right now. So: we're going to aim for all these awards, and then we can advertise that fact. We can claim that quality is above all.

Why? Because in the age of streaming, if they didn't, the Apple customer would think more and more that the place of content is not Apple. We get music there, we get podcasts there. Already it's not there in terms of YouTube, which is short-form video. But they said: for long-form video, we need to be there for brand reasons, and possibly for the idea that it's the device that consumes the greatest content. I do believe they were also thinking long-term for the Vision Pro and other things: we're going to need to get into sports, into live, into events. Because the screen doesn't stay the way it is now. Screens become more wearable, things become three-dimensional. And if we don't control the content, then we can't create the tools.

This brings me back to the old days when Sony was in this game. Sony was struggling to convince people to start with Betamax versus VHS. They lost that battle, and they said: VHS won because more studios supported it, more content was behind it. So Sony said, we'll have to buy a studio. They became filmmakers, and they became a music company, so that content would reside, ultimately, on Memory Sticks, DVD, and Blu-ray. If we don't own the content, then we cannot sell the product that plays it, and we cannot get royalties from the media it plays on. It's outdated now, but the point was they realized content was king. If you don't own it, then you are at the mercy, and the margins are destroyed, because you can't innovate — you have to go to commodity product. I think that influenced a lot of people back in the day, including Steve Jobs, who realized: if you deal with content — long story with Pixar there. So why make content? Same as always: because content is king. Because without it, if somebody else owns it, then they'll dictate terms to you on what you can use to display it.

I heard from Judd, my podcast partner, that things are rough in Hollywood these days — the industry is going through a terrible crisis, perhaps an existential one. And yet, so much new stuff is coming out; there's so much production going on. Yes, but it's all controlled by the streamers. It has changed dramatically from the creative side. The money flows and the deals that are done are completely different now, and this caused a huge disruption. This spending on production, even if it's billions, is pocket change for Apple and Amazon, maybe Disney. It's the tail wagging the dog: the distributors, who everybody thought were just a bunch of nerds, ended up dominating it.

---

Editor's Note: This was one of the questions asked by participants in Asymco's July 2026 Office Hours live Q&A session, held the day after Apple's FQ3 2026 earnings and open to Asymco One subscribers.

Subscribe to Asymco One for full access to this and other content.