By Jason Snell

April 30, 2019 9:24 AM PT

Apple TV minus?

We are in the midst of a fundamental transition of how people get their television. Linear broadcast and cable are increasingly irrelevant. The future of TV is streamed over the Internet to devices with screens large and small. Everyone knows it. Established players know it, and they’re trying hard to use their position to ensure they’re dominant in the new world, too. Other players see an opportunity to rush in and get a piece of the pie, something previously unimaginable if you didn’t want to buy a television network.

Which brings me to Apple.

I really don’t know what to think about Apple’s place in this transition. Netflix has invested billions of dollars in original content in order to build itself a large catalog and Amazon has been doing the same. Meanwhile, the big players are beginning to roll in, led by Disney’s recent announcement that it’s starting a streaming service featuring original Marvel, Star Wars, and Pixar TV series along with its enormous back catalog of content. Warner Media and NBCUniversal will follow. These are enormous companies with massive catalogs of content and decades of history creating TV and movies for large audiences.

And they’re all going to want to compete with Netflix for a monthly slice out of your wallet.

And then there’s Apple… with no back catalog, a handful of new original shows, and a small collection of executives hired from places like Sony Entertainment and the BBC. Disney is providing Disney/Star Wars/Pixar/Marvel vault, plus new stuff, for $6.99/month this fall. How can Apple compete with that at any price?

It can’t, which leads me to believe that Apple is going to have to decide (if it hasn’t already) just how serious it is about being a player in the streaming entertainment world, or if it would rather just be a conduit.

Being a conduit would be the easiest thing, the most comfortable choice for Apple. It could spend money on a small, curated collection of exclusive TV series every year—still new ground for Apple, but the scope they’re currently working at—and combine that with the resale of other streaming services via their TV app. Apple would be, essentially, your cable company—bundling together a bunch of streaming services (but not Netflix or Amazon) into a single interface, with a few originals loaded on top.

But times of change are times of opportunity, and Apple is looking for areas of serious revenue growth. Its wallet is flush with cash. Its investment of a few billion dollars in programming is impressive, but it’s not much more than dipping a toe into the water. For Apple to really compete, it will need scale—and to get scale, it will need content, a lot more content than it can build by buying original shows. By the time it builds a catalog of a decent size, this race will be decided.

So that leaves us to Apple’s other, stranger path: Going all in on entertainment. I’m doubtful that the company will do this, but I think there’s a chance. Apple’s got the money to begin buying traditional entertainment companies and integrating them into its existing entertainment business. Sony Entertainment, Lionsgate, CBS, Viacom—there are still a handful of large entertainment companies out there that aren’t owned by Disney, Comcast, or AT&T. But there aren’t as many as there were a year ago.

It would require an enormous investment and further transform Apple from a tech company to something quite different. I’m not sure if it’s a bridge anyone at Apple would feel is worth crossing. And yet, without a big move like this, I wonder if Apple’s foray into television with Apple TV+ will ever amount to much more than a curiosity.

The table stakes in the streaming-media game are higher than ever, and enormous companies are playing to win. Sure, some niche streaming services will survive, catering to specific audiences, but the shows Apple has announced all seem fairly mainstream, intending to appeal to your average Netflix or HBO household. I don’t think that’s going to get it done, unless Apple is happy settling into a role as a middleman between some of the giant content providers and the audience. (And guess what—many of those giants will refuse to work with a middleman.)

So it comes down to this. That billion-plus investment in TV series is a sunk cost. Apple can shrug and move ahead with its toe-dipping strategy, or it can make some bold moves that come with a lot of upside but also risk transforming Apple’s core culture. Does Apple want to own a movie studio? Does Apple want to own CBS and Paramount and Comedy Central and Adult Swim and Starz? Maybe, maybe not, but if Apple TV+ is going to compete with Disney+ and the others—rather than hoping to find a tiny ecological niche in which to hide—it’s going to need to do more than it’s done so far.

Separately, I’m positive about the future of TV and the future of Apple. But together, I’m not at all sure.