There's No Way Apple Isn't Building a Video-Streaming Service

Apple's (NASDAQ:AAPL) outgoing music chief, Jimmy Iovine, is largely credited with pushing the company to invest in original video content. While it was a clear misstep to use that content in an effort to differentiate Apple Music from competing music-streaming services, at least it put the Mac maker on a path toward potentially creating a video-streaming service that could further its ambitions for its services business. Despite services chief Eddy Cue once saying that Apple is "not trying to compete with Netflix�(NASDAQ:NFLX) or compete with Comcast," that's very clearly what Apple should do.

At this point, there should be little doubt left in any investor's mind that Apple is indeed building a video-streaming service.

Image source: Apple.

All this content has to go somewhere

The most obvious evidence is simply the growing list of shows, series, and movies that Apple is buying up (or in the process of buying) in Hollywood. If anything, the rate at which Apple is acquiring content has only accelerated in recent months. Here's the reported list so far, in no particular order:

Planet of the Apps Carpool Karaoke A children's show from the creators of Sesame Street An animated movie from an Oscar-nominated animation studio based in Ireland A dystopian drama�that takes in place in the future called See A rebooted�version of Steven Spielberg's anthology series Amazing Stories Some mysterious multiyear partnership with Oprah Winfrey (this one got an official press release) A different drama series�made by the director of La La Land A thriller series produced�by M. Night Shyamalan A space drama�from the creator of Battlestar Galactica A scripted morning show starring Reese Witherspoon and Jennifer Aniston An adaptation of Isaac Asimov's famous Foundation series of science fiction novels

There's also a fair chance there are more shows in the works that we simply haven't heard of. Beyond all of this evidence, there's another very simple explanation.

Double your money

Music streaming is a tough business. Iovine noted last year that there are "no margins" in music streaming, which was soon confirmed by Spotify's IPO. Those businesses pay massive royalties to record labels in order to stream music, which makes it hard enough to squeeze out a profit. The idea of any company -- even one as ridiculously profitable as Apple -- investing over a billion dollars in original video content to be bundled with a music-streaming service is just laughable and has been for quite some time.

In order for Apple to recoup all of the money it's investing in original video content, it needs to create a new service that generates revenue on its own. Over-the-top video services go for $10 to $15 per month these days, and Netflix has demonstrated that a strong slate of original content can command considerable pricing power.

Why would Apple choose to hemorrhage cash by bundling original video content in Apple Music for $10 per month when it can instead earn $20 per month or more by selling both Apple Music and an Apple-branded video-streaming service? Perhaps the biggest question at this point is what Apple will call it, since Apple TV is taken and "Apple Video" just sounds silly. Maybe "Apple Flix"?

Soybean prices plunge to nine-year low on US-China trade war fears

Soybean futures plunged Tuesday to their lowest in more than nine years following renewed concerns about a U.S.-China trade war.

A war of words between the two countries picked up overnight, following announcements of tit-for-tat tariffs on $34 billion worth of imports late last week. In retaliation against planned U.S. duties, Beijing intends to impose a 25 percent tariff on 545 U.S. goods, including soybeans.

Soybean futures for July delivery dropped more than 7 percent to a low of $8.415 a bushel, their lowest since March 2009, according to Thomson Reuters. They were trading near $8.64 a bushel as of 11 a.m. ET.

There are a lot of "unknowns and no confidence," said Rich Nelson, director of research at Allendale, an agricultural market research and trading firm. He added that prices could reverse just as quickly if headlines on trade changed.

With Tuesday's late morning sell-off, soybean prices are now more than 17 percent lower for the quarter and down more than 10 percent for the year.

Corn futures tumbled to their lowest price in more than six months. Wheat and oat futures fell roughly 1.4 percent and 3 percent, respectively, while rough rice futures were mildly lower.

"The dramatic drop today is soybeans because soybeans is first and foremost what the Chinese like to buy from us," said Phil Flynn, senior market analyst at The Price Futures Group.

More than half of U.S. soybeans go to China, the world's largest consumer of the beans.

If Beijing imposed a 10 percent tariff on U.S. soybeans, total American soybean exports could drop by 18 percent, according to a study for the U.S. Soybean Export Council by Purdue University agricultural economists Wally Tyner and Farzad Taheripour.

If China implemented a 30 percent tariff, total U.S. soybean exports could fall 40 percent, according to the study, released in late March. Prices would fall 2 or 5 percent over a few years, respectively, under the two different scenarios, the analysis said.

In addition to negative sentiment around the trade dispute, Flynn attributed the drop in soybean prices to dollar strength, which makes U.S. goods relatively more expensive overseas. The U.S. dollar index rose about 0.3 percent Tuesday and is up 5.5 percent this quarter.

"I think ultimately the world is going to buy our beans," Flynn said. "The demand is there. People have to eat. The decrease in price may offset the fact there might be a tariff."