Apple just can’t shake those one-trick pony blues despite a stock price that passed $900-billion, and with enough cash flow and stock buybacks it could take itself private in a few years. Still, criticism persists.
Take Netflix. Puhleeze. This little company is the darling of media companies, humbling even Amazon with stellar financials. Wait. What? No. Not Netflix. The streaming movie and TV giant is worth far less than $150-billion, has a P/E half way to Mars, and doesn’t make much money.
How does Netflix compare to Apple’s supposedly anemic content and media business?
There is no comparison. Netflix is lunch to Apple. Granted, Netflix is doing plenty that is good for Netflix and some good for their subscribers, but Apple’s content and media business isn’t exactly going bust. In fact, Apple’s own Services group– which includes Apple Music, iTunes, the App Store, and much more than Netflix– turns out to be much more than Netflix in every way possible. Services topped $9-billion in the most recent quarter while Netflix slumbered along at $3.7-billion.
Over the course of the past year, Apple’s version of content and media generated over $33-billion in revenue. Almost three times Netflix. More customers. More revenue. More profits.
So how is it again that Netflix is such a market and critic darling and Apple is a purveyor of hair balls?
Here’s the deal. Netflix has been around awhile and doing kinda sorta mostly OK. Unless you compare it to Apple where everything turns to gold (except AirPort routers, I guess). And, get this– Apple just got started in the real video content business and has enough money on hand to buy Hollywood. And France.
Two years from now Apple Music will be bigger than Spotify, and whatever comes after iTunes and Apple TV will have exclusive content for Apple customers. Apple’s Services is a massive conglomerate of mostly integrated components that provide the company with customer stickiness not seen since the original Super Glue.
That munching sound you hear around lunch time is Apple taking a bit of Netflix for lunch.