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Saturday, June 3, 2023

Apple will spend more on entertainment

Apple Inc. (NASA), the world’s most valuable company is considering a $1 billion-plus foray into movie theaters and sports streaming in an attempt to drive subscriber growth for its Apple TV+ streaming platform.

key points

  • Apple is likely to spend more than $1 billion a year to increase its movie distribution and sports streaming.
  • The company is reportedly in talks with studios to co-release Martin Scorsese and Ridley Scott films.
  • Previously, Apple spent most of its $6.5 billion movie and TV budget on TV shows.
  • The move could help draw viewers to Apple’s streaming platform, Apple TV+, which lags far behind rivals such as Amazon and Netflix.

Apple is expected to spend $1 billion a year producing movies for theatrical release. The company is reportedly in talks with studios to co-release upcoming films from Martin Scorsese, Ridley Scott, and more. The company is also reportedly considering a bid for streaming rights to football matches in the UK.

The new plan significantly increases Apple’s entertainment spending, likely in an effort to drive more interest in Apple TV+, which lags rivals in terms of subscriptions. Apple TV+ has an estimated 40 million subscribers, while Amazon has at least 200 million (amazon) Prime Video and Netflix (NFL).

Apple also lags rivals in content spending. In 2021, the company will spend about $6.5 billion on movies and TV, compared with $9 billion for Amazon and $17 billion for Netflix.

Apple’s biggest streaming success so far has been in television, with the acclaimed series Ted LassoThe business of distributing movies for broad theatrical release can be more complicated, especially as theater chains struggle to bounce back from COVID-19 and fend off competition from streaming services. Movie ticket sales were about a third below 2019 levels. AMC Entertainment Holdings Inc. (asset management company) attributed the lackluster sales to a shortage of available films.

Apple’s distribution deal could help boost ticket sales, and it’s not the only tech company hitting theaters. Amazon, which bought major movie studio Metro-Goldwyn-Mayer last year for $8.5 billion, now plans to produce as many as 15 films a year for theatrical release. In each case, Apple and Amazon are likely to try to boost streaming viewership by releasing those movies later on their respective platforms.

Apple is interested in adding English soccer games to its streaming platform, following a 10-year streaming deal worth $2.5 billion with Major League Soccer last year. Terms of a potential deal between Apple and the English Premier League were not disclosed.

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