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Peter Hamilton Consultants, Inc

Need To Know for ’22 #1. Apple Hits $3 Trillion Market Cap. Tech giants extend dominance over legacy media players

Apple briefly became the first $3 trillion company.

  • Its valuation is roughly equal to the gross domestic product of Britain or India.
  • And it is equivalent to about six JPMorgan Chases, the biggest American bank, or 30 General Electrics.

This milestone constrasts dramatically with today’s valuations of legacy media companies like Disney, ViacomCBS and Discovery, or even the leading streamer Netflix.

Three of the tech platforms Apple (Apple TV+), Amazon (Prime) and Google (YouTube) offer a rich and expanding mix of video programming that includes licensed content.

They aren’t pure media companies:

  • Apple sells devices and content to run on them
  • Amazon is an online retailer
  • Google sells addressable search engine and YouTube ads.

But they all covet the relatively high margins and prestige of video.

Apple is rapidly building its LA HQ (above) and filling it with programming execs, including documentary buyers who are spending generously on qualified programs.

Netflix

  • Netflix is not a ‘Big 5’ tech platform.
  • But is is a pure video company without the distraction of theme parks, cable systems and channels, or other legacy businesses.
  • As I wrote recently, Netflix dominates the viewing of the legacy streamers.

Legacy Leftovers?

These enormous resources will lead the competition in the global video market, leaving many of the legacy players like Warner/Discovery to pursue defensive mergers, or to play niche roles.

Beyond licensed programs, Facebook / Instagram, TikTok and YouTube are among the leaders in the broad video ecosystem that includes social and user uploads, and where “Time Spent Viewing” is a key measure.

Watch out for more of my ‘Need To Knows‘ for 2022 and beyond.