Apple reportedly ups TV spending by USD$5 billion to compete with Amazon and Netflix

Apple has reportedly committed an eye-popping USD$5 billion dollars more to its original video content budget in a bid to better compete with Amazon, Disney, HBO, Netflix, and Hulu, according to a new report from the Financial Times.

The company had originally set aside USD$1 billion for former Sony Pictures Television executives Jamie Erlicht and Zack Van Amburg to court well-known creators and Hollywood stars to its platform.

That number has jumped to USD$6 billion as more shows have moved through production and budgets have ballooned.

One production — a high-profile comedy-drama about morning television featuring Jennifer Aniston, Reese Witherspoon, and Steve Carrell called The Morning Show — has cost Apple hundreds of millions of dollars.

Separately, Bloomberg reports that Apple is spending USD$300 million on just the first two seasons of the show.

That makes it more expensive on a per episode basis than the final season of HBO’s Game of Thrones, which enjoyed a budget of roughly USD$15 million per episode and ranks as the most expensive season of television ever.

Another ludicrously expensive production is the sci-fi show See, featuring Aquaman’s Jason Momoa, which The Wall Street Journal reported back in July costs USD$15 million per episode, making it more expensive than the final season of GoT, as well.

Apple’s willingness to immediately match what Netflix was spending annually on original content just a couple of years ago shows how intense the streaming wars are poised to become in the coming months and years. 

Apple’s TV Plus service launches this fall, anchored by The Morning Show and a suite of other programming with big names like Oprah Winfrey and Steven Spielberg.

The company’s services chief Eddy Cue has said the company plans to add new content at a slower pace than its soon-to-be rivals, with a prioritisation on quality over quantity.

However, Apple will be going up against not just existing streaming heavyweights, but also newcomers like Disney, which is launching its Disney Plus service on November 12th for USD$6.99 and a bundle that includes Hulu and a stripped down version of ESPN for USD$12.99.

Come 2020, there will also be WarnerMedia’s new HBO Max to contend with, a new streaming service that is expected to combine live TV, including news and sports, and a broader variety of content from across every WarnerMedia property with all of HBO’s existing offerings.

Meanwhile, Amazon, Disney, and Netflix are spending fortunes to compete with one another. For instance, Amazon signed up Westworld creators Lisa Joy and Jonathan Nolan for an estimated USD$150 million deal to create original content for its Prime Video platform.

Netflix, which is expected to spend more than USD$14 billion this year on original content, just spent north of USD$200 million, and perhaps as much as USD$250 million, to secure a deal with Game of Thrones showrunners David Benioff and DB Weiss, a deal said to be comparable to the ones it gave to show creators Ryan Murphy and Shonda Rhimes.

And Disney is expected to spend close to USD$24 billion this year on the satirical releases and original streaming content, with the intention of reserving streaming access to those new films to Disney Plus subscribers.

We still don’t know a whole lot about Apple’s TV Plus, which has yet to get pricing or a release date.

But it’s expected to launch some time in the next two months, and Apple has built up an office in Culver City in Los Angeles to manage its growing TV and film ambitions, the FT reports.

 According to Bloomberg, Apple may price the service at USD$9.99 a month and launch it in November ahead of the launch of Disney Plus.

The goal is to leverage the massive network of iOS owners to transform a subset of them into loyal subscribers of Apple services, which promises to bring in recurring revenue and help Apple offset its falling iPhone sales.

Part of that pitch involves growing existing businesses like the App Store, Apple Music, Apple News, and iCloud.

But the future of the division and CEO Tim Cook’s ambitions for iOS-based services depends on rounding that out with a successful video product that incorporates film and TV, something Apple has tried for years and failed to crack following the early success of iTunes in the pre-streaming era.

source: /www.theverge.com