Apple’s Hollywood fare panned before it airs

Cupertino’s original content, writes KeyBanc’s Andy Hargreaves, “will likely remain uninspiring.”

From “An Apple Streaming Service Might Not Be Worth Getting Excited About, Analyst Says,” posted Monday by Barron’s ($):

On Sunday, KeyBanc Capital Markets analyst Andy Hargreaves wondered whether Apple’s video offering might be slow to catch on, a question that also applies to other companies.

“The overall effort appears likely to be subscale, years behind key competitors, and lacking in meaningful differentiation,” wrote Hargreaves, who reiterated a Sector Weight rating on the stock. “We see little in the effort that appears likely to drive material profits or that could attract a significant number of incremental users to the Apple ecosystem.”

Hargreaves also worries that another possible Apple revenue source—a cut of resales from major content partners, similar to Amazon’s Channels or Roku’s (ROKU) offering—might come in light if top brands don’t participate. CNBC and other outlets recently reported that Netflix won’t be sold through Apple’s video offering; HBO, another expected competitor, might not be.

“We maintain iPhone revenue will decline through fiscal 2020 and anticipate decelerating profit growth in services,” he wrote. “We see little in what we expect from the new video service effort that seems likely to change this.”

My take: Who died and made Andy Hargreaves the king of Rotten Tomatoes?

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