CUPERTINO, CA: Rumours of Apple’s entry to Hollywood received credence yesterday, as reports surfaced that the company had set aside roughly $1 billion to procure and produce original video content over the next year.
This is according to the Wall Street Journal, which spoke to a source familiar with the development, who added that the company could buy and make as many as 10 shows for TV.
Such a sum going toward original content would make the iPhone and Macbook manufacturer a significant mover in the media market. Add to this its reach, fame, and marketing capabilities, and the development poses a threat to media old and new.
For context, Fast Company reported that Time Warner’s HBO spent around double what Apple intends to spend over the coming year. However, by tech standards the figure does not suggest vaulting ambition. Back in 2013, when Amazon announced its entry into original content, it spent $1 billion also. Similarly, Netflix’s budget this year is expected to reach $6 billion.
Yet the move is beset with risk, as Apple will have to avoid losing its cut of subscriptions from services hosted on the app store, such as Netflix and HBO Go.
Putting together original programming is expensive. One episode of Game of Thrones can cost more than $10 million to produce, while even comedies can cost over $2 million per episode.
Yet, Apple’s sheer wealth means that from dipping its toe in original content, the company could quickly hit the fast lane. Apple’s cash reserves swelled to $261.5 billion in August.
The budget, the source added, will be controlled by Jamie Erlicht and Zack Van Amburg, two Hollywood veterans who jumped ship from Sony in June to look after Apple’s content acquisition and video strategy.
Data sourced from the Wall Street Journal, Fast Company, CNBC; additional content by WARC staff