When it comes to streaming video, there's Netflix (NFLX 0.27%), and there's everybody else. The company singlehandedly wrote the winning playbook for a successful streaming business and established many of the steps its rivals imitate to this day.
For example, when Netflix first launched its streaming service, the company relied on licensed movies and television shows from other providers before ultimately bringing the process in-house and betting big on its own original content. Since then, the company has regularly acquired intellectual property and hired some of Hollywood's top talent to create Netflix Originals to augment its licensed content.
Now, it seems Apple (AAPL 2.14%) is taking a page straight out of the Netflix playbook.
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Severance
In a move that turned heads, Apple has acquired full ownership of Severance, according to Hollywood industry publication Deadline. The dystopian thriller is one of the most-watched programs ever on Apple TV and the most-nominated program at the 2025 Emmy Awards, bagging 27 nominations and winning eight awards. It acquired the rights from television studio Fifth Season in a deal reportedly worth $70 million. Apple is also keeping the successful creative team together, including creator, executive producer, and showrunner Dan Erikson and executive producer and director Ben Stiller.
Despite its popularity, Severance has had its share of challenges, including significant restrictions while filming during the global pandemic and a nearly nine-month shutdown courtesy of back-to-back Hollywood strikes in 2023. That caused a three-year lapse between the release of season one and season two, something Apple is looking to avoid in the future. Fans have been eager for the next chapter of the show, and reports suggest the third season could begin filming as early as this summer.
Apple has big plans for the critically acclaimed series, including producing future seasons of the hit show in-house and potentially expanding the Severance franchise. Under consideration are possible spin-offs, a prequel, and foreign versions of the show.
Why this could be a brilliant move
As I pointed out earlier, Netflix was a pioneer in the streaming space, relying on licensed content while building a library of wholly owned original programming. Apple's move to acquire the full rights to Severance follows the playbook that Netflix has used so successfully. Furthermore, the show is already a hit, so it's a known quantity and has already established its value for Apple TV.
NASDAQ: AAPL
Key Data Points
While most of the streaming services bill themselves as all-you-can-watch buffets, Apple has taken the high ground, positioning itself as a premium brand. The company continues to focus on fewer creator-driven shows and award-winning programs.
Management doesn't break out Apple TV results, but aggregates them with its services segment. Furthermore, Apple hasn't disclosed how many streaming subscribers it has, though industry estimates put the figure at 45 million. Reports also suggest the company is losing more than $1 billion annually on the service as it builds out its content library and focuses on the long term.
Apple has always positioned itself as a premium brand, and that has worked extremely well for the iPhone, which closed out 2025 as the world's top-selling smartphone. It makes sense that the company would take the same approach with its streaming service. Owning the rights to Severance is another step in establishing its bona fides as a premium provider, a move that will pay dividends for Apple over the long term.
Furthermore, investors shouldn't underestimate Apple. The company has a long history of entering markets slowly and building its business over time before becoming the market leader. The strategy has been used successfully with the iPhone, iPad, AirPods, and Apple Watch.
Netflix closed out 2025 with 325 million subscribers, so Apple may never become the market leader in streaming video, but I certainly wouldn't count the company out. It has proven doubters wrong before.
At 33 times earnings, Apple is selling for a premium, but given the company's track record and the recent rebound in iPhone sales, the stock is worth every penny.
