has been tight-lipped about its plans for enhanced streaming services, which are expected to be unveiled on Monday. But analysts are already trying to handicap who could be the biggest winners and losers from the announcement.
News reports have hinted at the details of what the event might bring, but Apple has held its cards close to its chest. It didn’t respond to a Barron’s request for more information.
The back story. SunTrust Robinson Humphrey analyst Matthew Thornton wrote in a note to clients on Thursday that he expects Apple will release a streaming service that includes third-party content as well as its own shows. Starz and Showtime are reportedly on board, Thornton notes. The company has also signed deals with Steven Spielberg and Oprah Winfrey, among others, for Apple’s own content.
Although Apple has previously offered its own streaming TV shows, the new service is a larger step and could affect other companies too.
What’s new. Thornton sees
Lions Gate Entertainment
(LGF.B) as being among the biggest winners from the Apple service. The premium cable channel Starz accounts for about 65% of Lions Gate’s profit, he notes, and a deal with Apple could help the channel reach many new listeners. Starz declined to comment on whether it will be on the platform.
The competitive pressure isn’t a great thing for
(NFLX), but Thornton expects any repercussions to be relatively minor. “From where we sit today, we do not expect any impact to be meaningful to Netflix,” he wrote.
It could also be a minor negative for Spotify (SPOT), but only if Apple connects the video offering to its music offering, Thornton asserted. “IF Apple bundles Apple Music with video subscriptions and news subscriptions, this would be an incremental negative for Spotify,” he wrote. “From where we sit today, we would expect any impact to be manageable.”
The impact to
will vary considerably based on whether Apple offers the Roku Channel on its new service, and whether Roku offers the Apple app. If the companies end up competing, Thornton considers it “a modest incremental negative as Apple is competing for Content Distribution revenue (e.g. someone signing up for Starz or Showtime via Apple is not signing up for those services via Roku).”
Looking ahead. Unlike Apple’s market-moving hardware announcements, this event seems less likely to be game-changing. Apple isn’t a dominant player in streaming, and its prior shows have largely been duds. Any impact is likely to play out over a longer period.
It probably doesn’t make sense to buy or sell stocks based solely on fear or excitement about Apple streaming.
Write to Avi Salzman at email@example.com