Apple enters the streaming video world
Posted: Sun Mar 24, 2019 11:26 am
Since Hollywood caught wind of Apple Inc.’s entertainment ambitions several years ago, filmmakers and studio executives have been wondering exactly how the iPhone maker will delve into the streaming video market — and whether it can dominate in the crowded and fast-growing arena. The tech giant has spent the last two years securing deals with show business royalty such as Spielberg, Oprah Winfrey and Reese Witherspoon to create a lineup of programming to compete with Netflix Inc., Amazon.com Inc. and Walt Disney Co.
Apple’s streaming plans have been cloaked in characteristic secrecy. The company is expected to finally provide answers Monday morning when Chief Executive Tim Cook takes the stage at the Steve Jobs Theater in Cupertino, Calif. There, he will pitch Apple’s new streaming video strategy to a crowd of celebrities and studio executives. There is intense pressure on Apple to deliver.
Filmmakers, writers and producers have been hoping that Apple would become a big buyer of premium content, filling a gap in an industry that is experiencing a wave of consolidation and disruption. (Just this month, 20th Century Fox, one of the oldest movie and television studios, was taken over by Walt Disney Co. in a $71.3-billion deal driven by Disney’s desire to charge aggressively into streaming.)
Apple, whose entertainment operations are building a growing presence in Culver City, brings deep pockets, an intensely loyal customer base and the credit card information of hundreds of millions of iPhone users. The company is expected to spend $1 billion to $2 billion a year on its original content efforts and has roughly two dozen shows in production or development.
Despite Apple’s reputation as a technology pioneer, many industry veterans and analysts remain skeptical of its move into original productions. “Even if they’ve been an emperor of the consumer landscape, at least from the content perspective, they are on the outside looking in,” said Daniel Ives, a managing director of equity research for Wedbush Securities. “That’s not a position they are used to.”
But Apple is also a late entrant in the streaming wars. Los Gatos, Calif.-based Netflix, which has about 140 million paid subscribers, will spend an estimated $15 billion on content this year. Hulu and Amazon also have aggressively expanded their entertainment offerings, while Disney and AT&T Inc.-owned WarnerMedia are ramping up their own streaming services to launch later this year.
While Apple has a long history of being a distributor and seller of music, books and movies, it has had limited experience producing original video content. Apple previously barely dipped its toe into programming, with its “Carpool Karaoke” offshoot and the lackluster “Planet of the Apps.” And several years ago the company pitched studios a proposed online subscription TV service for users of its set-top boxes, but it faltered. Some details and theories about Apple’s streaming plans have begun to emerge. Analysts have estimated the service could charge $8 to $15 a month, but Apple may initially offer its content for free for Apple device users.
Along with original shows, Apple is expected to offer subscriptions to other streamers through its own app, making it similar to Amazon’s Prime Video Channels platform, which allows users to sign up for premium channels like HBO, Starz and Showtime. (Netflix CEO Reed Hastings on Monday said it would not make its content available on the Apple service, citing competition.) Apple is also expected to launch a subscription service for news. Some analysts have predicted the company will bundle music, video and news into one subscription.
Some people familiar with Apple’s programming say the company is being overly cautious by avoiding programming with gratuitous violence, sex or anything that shows the nefarious side of technology. Rather than seek out boundary-pushing programs like Netflix’s “13 Reasons Why,” Cook is said to prefer family-friendly material that can be shown on screens in Apple retail stores without offending customers.
People familiar with Apple’s operations said Cook and Cue take a hands-on approach to approving content and that Erlicht and Van Amburg — who at Sony shepherded such shows as “Breaking Bad ” — have less autonomy than traditional programming heads.
“There is micro-managing and an overemphasis on star power and the names behind things,” said one source who requested anonymity to speak to protect relationships.
https://www.latimes.com/business/hollyw ... story.htmlApple could supercharge its efforts by buying a smaller studio, like Lionsgate, Metro-Goldwyn-Mayer Studios or A24. For now, though, Apple appears determined to grow its content business internally.