Apple In Talks To Buy MGM Holdings For More Apple TV+ Content; The Ad Tech Tax Hit $10 Billion In 2019

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Content Costs

Apple has held preliminary talks with MGM Holdings and with the Pac-12, a college football conference, as it tries to beef up the Apple TV Plus subscription offering, reports The Wall Street Journal. Although this may be a golden era of television production, Apple’s content campaigns show how hard it is for an outsider to break into a category occupied by Netflix, Disney, Comcast’s NBCUniversal, Amazon Studios, ViacomCBS and the WarnerMedia empire. Apple must spend hundreds of millions of dollars year after year to produce even a handful of high-production original programs. But there’s a shortcut. Apple could buy a content library of its own, and if it goes that route, MGM is one of the best options out there, with franchises like the James Bond movies and cult hit TV shows “Stargate” and “Mystery Science Theater 3000.” It’s gonna cost, though. Apple would have to spend billions for the MGM deal or to get popular sports rights. “There aren’t a lot of potential acquisitions that could meaningfully change [Apple’s] trajectory,” said Matthew Ball, former head of Amazon Studios. More.

Ad Tech Tax Cut

US advertisers spent more than $10 billion on fees to programmatic vendors in 2019, up 20% from last year, per an eMarketer report. Roughly 38% of non-social media programmatic display budgets went to vendor fees. Still, it’s important to note that the share of budgets getting eaten up by the ad tech tax compared with the amount going toward working media actually shrunk slightly in 2019. In other words, marketers are spending more on programmatic overall and improving efficiencies, despite the persistence of high tech margins. In 2020, advertisers will spend 36.6% of their programmatic budgets on fees, according to the forecast. Transparency initiatives such as supply-path optimization have had an impact, driving down the percentage of marketer budgets allocated to fees from 42% in 2016. More.

Hardware And Tear

A year ago, when Facebook launched Portal, its suite of smart screen and speaker devices, the company was called out for wading deeper into a data privacy swamp despite recent fines and scandals. The launch may have seemed tone deaf to some, but the message it sent is important: Facebook isn’t slowing down its hardware ambitions. “We really want to make sure the next generation has space for us,” Facebook hardware chief Andrew Bosworth, known as “Boz,” told The Information. Facebook was in the running to acquire Fitbit, but lost out to Google, and in September, it dropped $750 million on CTRL-labs, which makes arm bands that interpret brain signals. Boz oversees the Oculus VR headsets and is developing AR glasses. One problem, though: Investors aren’t interested in the hardware efforts. Mark Mahaney of RBC Capital called Facebook’s consumer hardware efforts “irrelevant to the investment thesis for the foreseeable future.” But Facebook sees hardware as more than a hedge on advertising. Bosworth was previously the VP of ads and business platform, for one. And Facebook’s hardware group will be a valuable data source for behavioral targeting. Oculus users, for example, log into their VR sets with a Facebook account. More.

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