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As Hollywood prepares for a potential writers’ strike starting on May 1, Apple TV+ may face some challenges due to its smaller content library and lack of unscripted content. However, analysts believe that the tech giant can easily weather the storm.
Apple’s original content strategy has been centered on quality rather than quantity, resulting in a smaller content library compared to its rivals. While Apple TV+ features A-list celebrities in its original films and series, it has fewer scripted and unscripted titles. This lack of content variety may affect Apple TV+ during a potential strike, especially as Hollywood executives consider producing reality TV shows to fill the gap.
A writers’ strike could also lead to a drop in subscribers, as a lack of fresh content may prompt viewers to cancel their subscriptions. However, Michael Pachter, a media and entertainment analyst, believes that Apple can weather the storm, as the company does not primarily rely on Apple TV+ for revenue.
“They’re building a long-term brand of Apple TV+, which is something apart from all their devices and their cool software. And they’re in the early innings”, Pachter said, adding: “I think they literally have a 100-year vision — not worried about making a quarter”.
Apple’s Services business generated $20.77 billion in revenue in the first quarter of 2023, which includes Apple TV+, iCloud, and other products. While this is a significant amount of revenue, it is just a fraction of Apple’s overall revenue of $117.15 billion.
According to Alvin Lieberman, a professor and executive director of the entertainment, media, and technology program at New York University’s Stern School of Business, Apple can easily pause a potential writers’ strike. “If it turns out that they have a wasteland in front of them for, let’s say, 30, 60, 90 days, it would not damage their P&L”, he said. “It would not damage the perception that people have of Apple TV+”.
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While a writers’ strike could pose some challenges for Apple TV+, it seems that the tech giant is well-equipped to weather the storm. With a long-term vision and a strong Services business, Apple can continue to build its brand and content library, even during uncertain times in the entertainment industry.