Apple has plans to invest approximately US$1 billion in original programming over the next 12 months, which could potentially result in as many as 10 original shows by the end of 2017.
Apple’s entry into the original content space makes sense given its deep investments in TV and mobile devices, as well as in digital download and streaming services. The company has been ramping up the video content it offers. Last year, Apple bought the unscripted TV series “Carpool Karaoke.”
A new team led by Jamie Erlicht and Zack Van Amburg, former Sony Corporation TV executives, will produce and buy TV shows and films for Apple Music and future video streaming products, reported Bloomberg. Both report to Eddy Cue, Apple services chief, and will be based in Los Angeles. Former president of WGN America cable network, Matt Cherniss, was also appointed to lead development and reports to Erlicht and Van Amburg.
“Content is a vital missing link that could help Apple complete a powerful ecosystem of programming, devices and services,” said eMarketer principal analyst Paul Verna. “Further, Apple’s $1 billion original content budget is likely on a par with its main rivals: Netflix, Amazon and Hulu.”
Apple is ambitious to double revenue by 2020 from its services business including Apple Music and App Store.
“Those companies haven’t disclosed how much they spend on originals. But in Netflix’s case estimates compiled by Business Insider, combined with statements by the company, suggest that up to 25% of its $6 billion total content budget goes toward original programming,” Verna added.
While the increased budget is sizeable for Apple in terms of services, it is dwarfed by Netflix’s expenditures of US$6 billion on programming in 2017, according to media reports, with next year’s budget increasing to US$7 billion.