Amid all the chatter surrounding the future of Warner Bros. Discovery, a company that has been repeatedly mentioned as a potential buyer, although management has remained silent: Apple.
The tech giant’s Apple TV service remains a smaller player in a sea of streaming giants and aspiring giants, and speculation is rife that film and television studios Warner Bros., as well as HBO, could help boost its entertainment ambitions.
At the same time, Apple TV is the only major streaming service that doesn’t have an ad-supported tier. Although Apple sells ads on live sports like MLS and (soon) Formula 1, it has avoided the strategy everyone else has adopted of selling a tier cheaper with ads.
Eddy Cue, the Apple executive charged with overseeing the company’s booming services business, seemed to dismiss both possibilities in an interview this week with International Screen alongside Apple TV chiefs Jamie Erlicht and Zack Van Amburg.
When told that Apple TV was planning an ad tier, Cue responded “nothing yet.”
“Again, I don’t want to say no forever, but there are no plans,” he continued. “If we can stay aggressive with our pricing, it’s best for consumers not to be interrupted by ads.”
And shortly after, when asked whether Apple would make a bid for WBD, A24 or Disney, Cue was equally dismissive.
“Same answer as before, but you have to look at Apple from a historical point of view,” he said. “We don’t do a lot of major acquisitions. We generally do very small acquisitions, which aren’t related to Apple TV, so I don’t think it’s happening because we love what we do. We’re building and we’ll continue to build from that.”
Apple’s biggest acquisition ever was the $3 billion deal for Beats in 2014, a deal that would be small compared to WBD, which is reportedly seeking more than $60 billion.
Apple has recently taken steps to strengthen Apple TV, including a package deal with NBCUniversal’s Peacock, that $750 million F1 deal, and moves to try to make the service more accessible to consumers. But there may be a limit to his efforts, as Cue suggests.
Apple has the money of course, but it also has the tech company philosophy of building rather than buying. It’s a philosophy shared by Netflix, although even the streaming giant reportedly hired a bank to take a look at WBD’s books.
“We come from a deep heritage of being builders rather than buyers. I also think there needs to be some skepticism about big media mergers, they don’t have an incredible track record in the history of time,” Netflix co-CEO Greg Peters said last month, before hedging himself by adding “I would say it’s our responsibility to evaluate all of our options.”
Microsoft, of course, has never shied away from big mergers and acquisitions, with Activision Blizzard and LinkedIn among its most recent deals worth tens of billions of dollars. Amazon, likewise, has been willing to buy to give it scale in a space ranging from MGM to Whole Foods.
But Apple? Although it is among the largest companies in the world, with a market capitalization of nearly $4 trillion and more than $55 billion in available cash, it has never been one to do the kinds of deals its competitors have done, and Cue’s comments suggest it has no plans to change that.
