Apple Stock: Streaming Success Creating Unexpected Challenges

94th Annual Academy Awards - Show

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When you think about the traditional issues that Apple (NASDAQ: AAPL) often found standing, several come to mind.

  • It offers new features to make customers keep buying their products again.
  • Improving your relations with employees, which is becoming more and more strained.
  • It’s figuring out how to keep its internal AI systems from becoming sentient (just kidding… at least I hope so).

The thing is, between all of these real and possibly made-up problems (that are still gaining traction in the media), streaming has really never gone that far down that “problem” lane. Yes, it was like that in the beginning when everything was so new and the company had not been established, but recently it has taken off.

Now it’s about maintaining that momentum, which comes with new and unexpected challenges.

First, as always, some background.

Over the past year (and change), Apple has turned its streaming division into a diamond in the rough and won two Emmys for best comedy series for Ted Lasso and a Best Picture win at the Academy Awards for CODA.

For those keeping score, it tops Netflix ( NASDAQ:NFLX ) in both metrics, and this team has been doing it for a significantly longer period of time. Yes, first over the wall is the bloodiest, but it must sting for a company that has pumped untold millions of shareholder cash into prize campaigns to continue to come up empty in the biggest races.

The point is, Apple TV+ has climbed that mountain, but now comes the equally tougher task of staying on top. CODA it was a big win, but it was also a big surprise… Apple couldn’t confidently say on the morning of the Oscar nominations (at least internally) that the film would even be nominated, let alone win.

It was a unicorn of a movie where so many things unfolded in the right sequence of events that it will be hard to duplicate. And by the way, this is not meant to take anything away from their team, these events only go in the right direction when people help point them in the right direction – it’s so rare that these moves work as well as they do in this competitive landscape.

In any case, onward and upward.

And that’s exactly the problem…

Apple has long had two ‘next big things’ in its film quiver – Killers of the Flower Moon directed by Martin Scorsese and starring Leonardo DiCaprio and Robert De Niro Emancipation directed by Antoine Fuqua and starring Will Smith.

Do you see the problem?

Hint – it’s not Color moon.

Well not directly, Color moon is a whole other type of problem for Apple, as this will be (at least for now) the first Apple release to go theatrical as part of a deal with Paramount and then streaming vs. the day/date approach that is more common.

The logistics of this release and the ultimate comparisons to the release of Scorsese’s recent film Irishman movie with Netflix will be two areas that need to be sorted out with his team first – but regardless, the movie isn’t scheduled until 2023, and these are challenges that Apple knew about when they made the deal for the movie.

This was unexpected.

Emancipation was originally slated for the upcoming awards season until Will Smith self-destructed on nationally televised Oscars. Now that leaves Apple in a potentially no-win situation and a choice to make.

Release the film as planned and be mired in Slapgate, shelve the film and hope it dies down in a year, or the extreme option – sell it or burn it and move on. Realistically, I don’t see the latter being a truly viable option, but it should have been discussed in the wake of Smith’s strange actions earlier this year.

What is he doing? Emancipation such a buzzed-about title that it pairs Smith with Fuqua to tell the true story of the man known as “Bumped Peter,” whose scarred back became a rallying cry for help to reverse the Civil War.

Smith, despite his volatile personality, remains a talented actor. He showed that he can do comedy and drama without missing a beat. Few actors can move effortlessly between the two, so you can see why hopes were SO high for this film.

Remember, despite being banned from the Oscars themselves and no longer a member of the Academy, Smith is still eligible to be nominated, but will voters be able to look past the man and his performance?

It’s possible, but not this year.

Many voters are still embarrassed by the slap heard around the world, and while the odds are slim Smith will ever do something like this again, his past actions cannot be ignored.

Personally, I think releasing the movie this year is not going well for Apple and it would be best to wait. It’s just not a good look for anyone, and it will take away from what is by all accounts a well-made film about an important event in our country’s history.

Beyond that, the campaign becomes about Smith and a “redemption” tour, which the Oscars don’t want and Smith may not be entirely ready to accept. Realistically, the best thing for Apple and its investors might be to just wait this out for a while, letting Smith’s return be with a different film/studio so that those difficult and unpleasant media conversations happen, but related to someone’s another project.

To be clear, even in that scenario, Apple would still have to go this route with Smith and the press, but it would help them not have to be first.

Apple has worked hard to build a strong reputation in this area and convince both critics and investors that this is the right place for it – especially given that it has no previous experience in this area. This is a decision that will be scrutinized all over the place, especially since it’s Apple, so you can bet that it won’t be something that will be solved overnight.