Apple’s senior vice president of Internet Software and Services
Top Apple executive Eddy Cue proposed to buy Time Warner at a meeting with the owner of HBO, CNN and Warner Brothers, which could have made the consumer electronics company the second largest media company after Disney according to three people who were briefed on the proposal.
As the boss of major Apple businesses such as the iTunes store, Apple Music and iCloud, Cue proposed to bid for the media company at the end of 2015 at a meeting with Time Warner’s head of corporate strategy, Olaf Olafsson.
The main goal of the meeting at the media conglomerate’s headquarters in Manhattan was to discuss the commercial relationship between the two companies including the listing of Time Warner’s cable channel in Apple’s video streaming service that is set to be launched in the future.
The discussions did not go past the initial stage of talks and did not include Apple CEO Tim Cook nor Time Warner chief executive Jeff Bewkes according to people familiar with the talks.
Both Apple and Time Warner have yet to comment on the matter.
Apple’s interest to buy one of the world’s largest media outlets sends a signal about the electronic company’s interest to have its own content. Time Warner’s market capitalization totals to about $60 billion.
The interest also points to the company’s aim to diversify in the wake of slower growth in terms of sales of their flagship product, the iPhone with its cash pile of about $216 billion.
The maker of the iPhone has also invested in a new market with a $1 billion investment in Didi Chuxing, China’s biggest ride-sharing service and competitor of Uber, and recently has been producing new content. The company has just commissioned a video series showcasing the app industry along with a scripted series starring hip hop star Dr Dre specifically for the Apple Music streaming service.
In comparison to Apple’s productions, their investments in video content production are miniscule compared to the investments of Amazon and Netflix as the companies pour in billions of dollars a year to produce original content.
According to sources, Apple is set to increase spending for original content to “several hundred million dollars a year.” Despite talks not proceeding with Time Warner, Apple has not closed the door on the idea of acquiring a media company.
Time Warner and Disney are the only leaders in the media industry that do not have controlling family shareholders and dual share structures, making Time Warner a perfect fit for Apple’s goals. Other media giants like Comcast, 21st Century Fox, CBS and Viacom are controlled by the founders and their families, which would make a takeover difficult for the company.
According to bankers, Apple has recently been eyeing a number of media outlets, but there has currently been no news about the consumer electronics company maker reviving talks with Time Warner about a possible acquisition.
According to one of the bankers working with the company, Apple has “been on the lookout for content assets for several months.” They have also said Apple is more geared toward streaming companies like Netflix rather than content creators like Time Warner as it would coincide with Apple’s services and would enable the company to offer a wide range of content makers.