Apple Considered Buying Time Warner in 2015

In 2016, the Financial Times reported that Apple’s Eddy Cue wanted to bid for Time Warner. Now that Discovery is merging with WarnerMedia, Time Warner’s successor, Alex Sherman of CNBC wrote about that proposal spurred from a smaller exclusive offering idea:

During the talks, Bewkes and Cook broached the subject of Apple acquiring Time Warner to deal with one of the biggest hurdles of the $19-per-month concept: What if Apple or Time Warner eventually wanted to back out? Once the companies went live with the offer, they’d need to stay aligned. Walking away from the deal could be disastrous to both companies’ external relationships.

Cue expressed interest in a full acquisition, but Cook ultimately wasn’t ready to pull the trigger on what likely would have been a nearly $100 billion deal, two of the people said. Neither Bewkes nor Cook had initially expected the talks to lead to thoughts of an acquisition, said the people. Time Warner had successfully fought off a hostile takeover offer from Fox a year earlier.

Sherman speculates that Apple could make an offer for a major studio, or perhaps even the combined WarnerMedia-Discovery, to accelerate its Apple TV Plus efforts:

If Apple wants to stay in the streaming video world, Cook may need to buck the company’s history of avoiding big-money M&A. The WarnerMedia-Discovery deal isn’t expected to close until mid-2022. That gives Cook a year to do some serious thinking about his company’s future.

I am skeptical of this make-or-break narrative. Apple’s long history of small but meaningful acquisitions has paid off, though often not quickly. I admit that I still don’t fully get why Apple is making TV, but it does not seem like it is adopting the throw-everything-at-the-wall tactics of Netflix. That’s not to say everything has been quality so far, but the bar seems a lot higher than Netflix’s, and that might take longer to pay off.

Put another way: Apple can afford to acquire a big studio or four, but it can also afford to play the long game. Apple TV Plus is comfortably protected by the rest of the company’s growing services business. It has time and space to slowly build.