Big tech is moving into content production and distribution if the latest rumours surrounding Apple are to be believed. In a somewhat sensationalist headline ahead of today’s Apple earnings report – ‘Apple poised to move further into media amid Wall Street panic’ – the Guardian makes the claim that Apple is looking to buy ‘parts or all’ of Condé Nast, a move that would further its push to become a luxury fashion accessory, lifestyle and content brand.
How believable are the rumours? Speaking to the Guardian, Gene Munster, a longtime Apple analyst, estimates the company will ramp up its spending on original content in video, music and publishing to $4.2bn by 2022 from $1bn this year. The purchase of all or some of Condé Nast, one of the world’s largest privately owned publishing empires focusing on premium luxury lifestyle, fashion and travel content, therefore makes solid strategic sense.
According to Munster, Apple views content not as a significant revenue earner in its own right but sees it more as a way to growth (this is broadly similar to Amazon and its Prime offerings). He adds, “Historically, Apple has been a platform for distributing content but increasingly they want to create their own content and that changes their whole profile.”
Whilst Condé Nast CEO Bob Sauerberg yesterday stated, “We are not for sale”, the publisher lost $100 million in 2017, despite revenues of nearly $1 billion. Estimates of its current value range from $1 billion to $2 billion if it were to sell, a figure that would almost be chump change for Apple, with its record war chest of $256 billion.
The news follows Apple’s purchase of Texture earlier this year, another buy-out signaling the tech giant’s firm intentions to move into content production and distribution. Interestingly, Texture’s owners included Condé Nast amongst others, and conversations about purchasing other sides of Condé Nast could have followed from there.
New York Post: Apple is rumored to be interested in Condé Nast