Apple's foray into original content with Dr. Dre isn't a prelude to a linear OTT service

Dr. Dre

News that Apple (NASDAQ: AAPL) is working with music icon Dr. Dre on a new original series, Vital Signs, may be spurring speculation that the company is finally moving forward with a linear over-the-top video service. But at the moment, Vital Signs is aimed squarely at competing in another streaming hot spot: music.

"Video is emerging as a battleground for music services," The Wall Street Journal said, noting that Spotify is already offering video clips from different outlets like BBC, Comedy Central and ESPN.

The strategy by Apple, which directly challenges Spotify and other services like Pandora and Amazon Prime Music (NASDAQ: AMZN) with its iTunes service, illustrates an emerging subcategory within streaming music. While concert videos, both live and on-demand, have been popular for years on YouTube multichannel networks like Vevo, few music streaming services have capitalized on their built-in listening audiences with video until recently.

The six-episode series is the first original series developed by Apple, and chronicles the career of Dr. Dre -- currently an Apple executive himself thanks to Apple's acquisition of his Beats brand. But Vital Signs isn't exactly the prelude to an original content empire: the series' purpose is simply to promote Apple's music.

"This was confusing, because while lots of people have predicted/fantasized that Apple would get into TV, this wasn't how the prediction/fantasy was supposed to work," wrote Re/code's Peter Kafka.

Kafka said that Apple's move makes sense when held up to other content efforts the company has generated of late. Apple has financed a number of high-profile videos and concerts specifically to promote Apple Music -- including Drake's "Hotline Bling" video and Taylor Swift's concert movie. Dr. Dre's series is merely another content marketing initiative, Kafka said.

Analysts have long speculated -- perhaps more hopefully than not -- that an Apple entry into the linear OTT market would upend the current status quo. But, although few true "virtual MVPDs" are currently operating – Dish Network-owned Sling TV being the primary example -- more and more VOD and live-streaming options are being proffered by providers in both niche and general categories. The difficulty of negotiating online retransmission rights may be one factor holding Apple back from launching a service -- but some analysts, like Kafka, believe the company still sees OTT video as a novelty.

 For more:
- see this WSJ article
- see this Re/code article

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