Mon. Nov 28th, 2022
Apple Music on iOS 10, with Senior VP Eddy Cue.

Apple Music on iOS 10, with Senior VP Eddy Cue.

As the battle to create original content for online video services continues, we get a look at Apple’s plans for the coming year. According to a report by The Wall Street JournalApple has a $1 billion budget to spend in 2018 to “buy and produce” original content. The iPhone maker could acquire and produce up to 10 shows next year with this money, which will largely remain in the hands of new Apple employees Jamie Erlicht and Zack Van Amburg. Erlicht and Van Amburg are former presidents of Sony Pictures Television who moved to Apple in June to oversee video content strategy and production.

The $1 billion budget shows how serious Apple is about boosting its original programming, the latest of which lives on its Apple Music subscription service. This is Apple’s first major push toward original content, but it’s $1 billion less than the money spent on content by rival companies. HBO spent about double that on content last year (it reportedly costs $10 million to produce one episode of Game of Thrones), and Netflix could spend more than $6 billion this year. Apple’s starting budget is similar to Amazon’s when it first got into original programming with Prime Video in 2013; Amazon could spend $4.5 billion on original content in 2017.

Original programming is the way to go, as it has proven to be a major driver for the growth of streaming services. Netflix’s company profited immensely from original hits such as House of cards, Orange is the new blackand Weird stuff. Those kinds of shows — comedies and scripted dramas — are expensive to produce, and we’ve seen Netflix’s annual budget for original programming increase in recent years to accommodate them. Apple’s first original series, Planet of the apps and Carpool Karaokeboth have just become available to Apple Music subscribers, and critics’ reviews have been mixed.

Not all of Apple’s $1 billion will be funneled into new show production; some of it will go toward acquiring rights to existing content and possibly hiring more veterans of the entertainment industry. Former Sony executives Jamie Erlicht and Zack Van Amburg were obvious choices to help Apple’s Senior Vice President Eddy Cue shape the company’s original content vision, but they’ll need others to produce hit shows that can withstand the Game of Thrones of the world. Other companies have also recently recruited talent: last week Amazon announced a deal with Walking Dead creator Robert Kirkman, who hires him at AMC. Netflix recently hired Shonda Rhimes and Betsy Beers, the minds behind hits including: Grey’s Anatomy and Scandalas well as Joel and Ethan Coen, who will produce a new series for the company.

Not only is Apple keeping pace with the Joneses by investing more in original programming, but it also hopes new shows will help boost its service business in the wake of declining movie rentals and sales. This used to be a big part of iTunes’ revenue, but the rise of streaming services has put customers away from buying and renting movies. As iTunes continues to generate billions in revenue, Apple’s share of the movie rental and sales market fell from 50 percent in 2012 to 35 percent. The Wall Street Journal report, Apple is not looking for original content to replace movie rentals or sales; instead, it hopes that new content will encourage customers to use both types of media through Apple services.

By akfire1

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