How Lucrative is the Apple (AAPL) money machine?
Having money to burn allows Apple to enter risky ventures like Show Business. In particular, I think Apple is able to do serious damage to Netflix (NASDAQ: NFLX).
To enumerate, Apple can afford to hire big stars, major directors, and expensive talent to produce high-quality programming without affecting its bottom line. In particular, Apple can cut large checks to stars and creators and avoid paying them royalties or a cut of the profits.
For example, Applecould write a $30 million or $40 million check to Robert Downey Jr. or Jackie Chan for a starring role. Hence, Apple can buy a lot of exclusive content with a readymade audience.
Uniquely, Apple can create exclusive content just for Apple TV or iTunes. Then give it away as a loss leader to buyers of its products. For instance, the only place you will see the next Robert Downey Jr. movie is on Apple TV.
On the other hand, Netflix reported $3.067 billion in cash and short-term investments on 30 September 2018. Thus, Netflix will have to pay talent in royalties or a cut of the profits.
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