Apple, Amazon Shrug Off Streaming Production Halt In Comments To Wall Street

Apple+; Amazon

As traditional entertainment companies grapple with the upheaval and uncertainty of COVID-19, tech giants Apple and Amazon are profiting handsomely during the pandemic.

The tech giants on Thursday reported blockbuster results for the second quarter, the same April-to-June period that paralyzed legacy media companies. Speaking to Wall Street analysts about the numbers during separate earnings conference calls, executives struck a notably sanguine tone about the months-long production shutdowns.

They took care to express concern about safety, of course, and conceded many unknowns about the outlook for when cameras will once again roll. But their main message was that they have plenty of other ways to keep growing while shooting remains on pause. That notion is well-established in an industry being reshaped by technology, but seldom has it been put in such stark relief.

Amazon’s head of investor relations, Dave Fildes, fielded a question about areas where Amazon is actually having to postpone its investments due to the pandemic. He said that “list is short,” given the company’s massive hiring spree and plans to expand its fulfillment center square footage by 50% by the end of 2020.

“We’ve had to delay production,” Fildes said. “I think most studios have. That’s been augmented by things like Amazon Cinema, where we have first-run movies” due to theater closures. “In this time, when people want entertainment, people are having trouble creating new content across the board. That’s a bit of a challenge, but not something we’re doing intentionally. We’re doing it to protect the actors and the film crews. We think that’s the right decision. … We’re adapting and looking at how things have changed and looking to create things for the new environment, especially in the entertainment area.”

Apple TV+ films and marquee series like The Morning Show, meanwhile, are “working to get restarted,” CEO Tim Cook said. “I don’t have a precise date yet when we will get them restarted. But there will be some impact because we shut down in the March time frame and are yet to really restart in a significant way, particularly for those that are shot in the LA area given the current status of the virus.”

Streaming overall, across a wide swath of Apple and Amazon’s operations, is booming during COVID-19. For both giants, the original video slice of that opportunity remains a rounding error in financial terms. Nevertheless, it has been enough of a corporate priority to get Cook and Amazon’s Jeff Bezos into a tuxedo plenty in recent years.

Both companies are worth upwards of $1.5 trillion. Apple has a Croesus-like $245 billion in cash on its balance sheet. That means when some marquee programming goes dark, Apple can fill gaps with projects from traditional rivals, as with the Tom Hanks movie Greyhound, acquired from Sony at a sizable premium.

The tenor of the tech execs’ comments differed from that of besieged media execs in recent weeks, many of whom have responded to the dark days of the pandemic by offering upbeat estimates for the return of production and live sports. Addressing analysts Thursday morning, NBCUniversal CEO Jeff Shell mustered optimistic spin, especially about the company’s nascent streaming service, Peacock. But he did not gloss over the difficulty of this period. “Making and releasing films is our lifeblood, so [the effect of the shutdown] is anything but positive, and the negative financial effects will be felt in coming years, particularly 2021,” he said.

While Amazon has been a player in original streaming programming for a decade, registering their presence with hits like Transparent¬†and The Marvelous Mrs. Maisel, Apple just launched Apple TV+ last November. With other new services like Disney+ and Quibi also newly in the market and Netflix widening its lead with 26 million new subscribers in 2020 to date, this week’s Emmy nominations scorecard was telling. The total showing by digital and streaming companies soared 42% over last year’s level.

This article was printed from https://deadline.com/2020/07/apple-amazon-shrug-off-streaming-production-shutdown-in-wall-street-comments-1203000206/