Get your calendar out and circle March 25. That is the rumored date of Apple's (AAPL) next event, where according to the rumor mill, the company will not only showcase its new news subscription service, but also unveil its video service.
This video service falls into the category of one of the best, worst-kept secrets, given the number of deals it has inked for original shows and movies. The news subscription service, which is expected to be called Apple News Magazines, comes after Apple acquired Texture, the would-be Netflix (NFLX) of magazines last year.
While we could see a new device or two, this event will be focused primarily on Apple's Services business, which the tech giant is using to further its position inside our increasingly digital lifestyle. Much like Procter & Gamble's (PG) Gillette razor blade business, I would not be surprised if Apple adopts a similar mindset with its devices being the "razor" that gets replaced periodically while its far more profitable Services business is the product or "razor blade" that people consume on a frequent basis.
Soon after Apple's event, The Walt Disney Co. (DIS) will hold its annual Investor Day on April 11, at which the company is expected to unveil its much discussed, but yet to be seen, Disney streaming service dubbed Disney+. Given the House of Mouse's robust library of films, content, and characters, Disney should not be underestimated on this front, and much like Apple and its Services business, success with Disney+ could change the way Wall Street values DIS shares. Key items to watch will be the Disney+ price point, original content rollout, and subscriber growth.
Stepping back, one could argue that we are on the path to a crowded field of streaming services between Netflix, Amazon (AMZN) , Hulu, CBS (CBS) , NBC, AT&T (T) , and others and now Apple and Disney. In many ways, we are heading for cable-TV without the cable box but on an ala carte basis. While we have argued that consumers will move for great content, the more streaming services there are, the more likely we are to see the proliferation of good, or not so good, content.
The risk for these companies is that, just like cable channels that need to be filled with content, so, too will their streaming services. Also, how many services will a person subscribe to? Past a certain point, consumers will balk, especially if all they have succeeded in doing is replicating that high cable bill they sought originally to escape.
Needless to say, we will be watching the unveiling and uptake of these new services from Apple and Disney with an eye for what it may mean for Netflix.
One interesting item to watch will be what is actually included in the Disney and Apple services at launch and over time. Both companies are rumored to be working on streaming gaming services as are Microsoft (MSFT) and Alphabet (GOOGL) , which Netflix has resisted, at least publicly.
If Apple were to bundle a gaming, video and news service along with Apple Music into one digital content package, that would offer some consumer wallet leverage over other single, stand-alone services.
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-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.