Apple’s preparations for its entry into the video streaming service market are being ramped up with the commitment of an initial $6 billion budget for the creation of exclusive new shows and movies. The tech giant’s new TV+ service is expected to launch within two months and will take on Netflix, Amazon Prime and other new entrants to the subscription-based streaming format Disney and HBO.
Apple has been seriously readying itself for the launch of TV+ since 2017, when Sony Pictures Television execs Jamie Erlicht and Zack Van Amburg were hired to head up the new unit and prepare it for a competitive market entry. Since then, the original $1 billion budget set aside for commissioning exclusive content for the service has grown to over $6 billion that has already been committed. That burgeoning war chest appears to recognise the hugely competitive market Apple is about to enter. Netflix is expected to spend $15-$19 billion on original content over the course of 2019.
Despite the still yawning gap between Apple’s content budget and that of its biggest competitor, the former’s will initially be concentrated on English-language productions, while Netflix is ploughing significant sums into localising content for big international markets such as India and Brazil. Apple is also offering its content creation partners more attractive terms than Netflix, which tends to negotiate the spread of payments over several years with Apple paying more upfront. That is reportedly helping its cause when it comes to winning deals with Hollywood’s big hitters.
Apple’s strategy is based on star appeal and it has put money and effort into signing up big names such as Oprah Winfrey and Steven Spielberg to produce shows. Its biggest original show at launch will be a series named The Morning Show, which stars Jennifer Aniston, Reece Witherspoon and Steve Carrel and will reportedly cost more to make on a per-show basis than the $15 million-an-episode budget of the last season of Game of Thrones.
Apple, in line with its now customary secretive, or tension-building, approach, has still to release key details around TV+, such as an official launch date and pricing. However, the company has confirmed it plans to launch in over 100 countries. Even the production companies and studios behind the shows and films that will be part of the initial release are said to be in the dark. It is reported that TV+ will launch with a core library and new proprietary shows will then have staggered releases as they are added each month.
TV+ is part of Apple’s broad strategy to ease its reliance on iPhone sales over the coming years as the smartphone market matures and to diversify revenues more towards services. However, the new ‘ecosystem’ will still heavily rely on the established audience of iPhone and other Apple gadget owners. As Oprah Winfrey sagely commented at the March event that announced the new streaming service “they are in a billion pockets, y’all — a billion pockets”.Risk Warning:
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