Look out Amazon and Netflix: Apple is planning its own shows,
Apple is preparing to challenge Netflix and Amazon — and Hollywood — by increasing the creation of its own online TV and movie content.
Remember earlier this month when Apple announced plans to produce 16 episodes of Carpool
Karaoke, the hit sketch on The Late Late Show with James Cor
den, for this spring (Corden won’t appear in them all)? And how in July Apple said it would create its first reality show Planet of the
Apps, executive produced by entertainer will.i.am?
Rumors also had a six-episode series in production by Dr. Dre at Apple prior to that.
These moves, as many have expected, appear to be all part of a bigger plan, according to a report in The Wall Street Journal on Thursday. Apple has been in talks with Hollywood producers about buying rights to scripted TV shows, the Journal says, citing people familiar with the matter.
The iPhone maker also has talked with studio and network marketing executives about hiring them to promote Apple’s upcoming original content, the persons told the Journal.
Subscribers to Apple Music would get the content, an addition that if desirable enough could boost Apple’s fortunes against Spotify, as well as Netflix and Amazon’s video streaming service. The $10 monthly music service has about 20 million paid subscribers compared to Spotify’s 40 million.
Over the years, many Wall Street analysts have theorized Apple would create a TV service or dive into original content since its nest egg — the company had more than $230 billion in cash and investments at the end of the last quarter — would allow it to compete with the likes of Netflix, which plans to spend $6 billion this year on content.
Apple declined to comment on the report. Apple shares were down 0.4% Thursday to $119.25; shares are up 18% over the last 12 months.
As a major tech company, Apple must offer and create original content to nurture its overall ecosystem, says analyst Joel Espelien of research firm The Diffusion Group. Increased content will help drive Apple’s services revenue, which rose 24% to $6.3 billion last quarter, while hardware revenues declined.
“If you have got a billion users, you need people to use those devices and services that come with those devices,” he said.
Still, Espelien doesn’t see Apple immediately developing content in bulk as Netflix and Amazon do.
“I don’t see them doing obscure scripted dramas that take a long time to explain or are an acquired taste,” he said. “I think it’s going to be more one-offs, shorts and maybe miniseries that involve people who are already stars.”