Apple TV+

My favourite academic of all time Prof. Scott Galloway once said that "the things that we're afraid of, are not the things that usually get us." For example, I'm deathly afraid of sharks but I am more likely to die from falling off my bed than a shark attack, while learning how to surf in Cape Town's Atlantic seaboard.

Anyway, as a species we are terrible at properly sizing up risks and threats, this extends to the market and companies as well. Just ask Blockbuster CEO Jim Keyes who said "Neither Redbox nor Netflix are even on the radar screen in terms of competition", and that was in 2008. Those were his famous last words. We all know how that turned out!

Can something breach one of the top five most impenetrable fortresses in the world of business right now, Netflix? What if it's something most people don't see as a threat? Enter, Apple TV+. Yesterday, the $970 billion behemoth made things a tad bit clearer, by announcing that its new Apple TV+ package will be significantly cheaper than that of its rivals.

That obviously does not guarantee that it will be a smash hit, but let's look at what makes it amazing. At $5 a month, Apple's streaming services cost less than half the $13 of Netflix for their popular plan, and very competitive versus the $7 charged by Disney. That adds a healthy price war on top of the ongoing content war.

The trifactor of a successful company comprises of, explosive growth, recurring revenues - what Prof. Galloway called rundles (recurring revenue bundles) - and strong and improving gross margins. Apple TV+ ticks two of the three boxes. They've subscribed to Jeff Bezos's mantra of "your margin is my opportunity" as the company looks to scale its streaming business.

Apple has $102 billion cash pile and has committed $6 billion so far to their original content race, putting it head-to-head with Amazon's spending budget on shows. The goal here is to get customers hooked on paying for Apple's recurring fees. One product and before you know it, you're deeply entrenched in the Apple ecosystem; Apple TV+ is a great entry!