The river of cash flowing to Hollywood from new content producers is about to swell as Apple plans to spend $1 billion within the next year for its own productions, The Wall Street Journal reports today.
The tech giant wants to buy or produce as many as 10 TV shows the paper says, citing “people familiar with the plan.” They could run on Apple Music, or perhaps a “new, video-focused service.”
The company signaled its interest in joining traditional networks, Netflix, Amazon and others in the originals game in June. Apple’s SVP of Internet Software and Services Eddy Cue hired former Sony Pictures Television presidents Jamie Erlicht and Zack Van Amburg to run all aspects of worldwide video programming.
They will oversee the $1 billion spending effort, according to the report. Yesterday they hired former WGN America President Matt Cherniss, a former production exec at Warner Bros., to help with development.
Apple has already dipped its toe into the business with the recent launch of its first original series, the unscripted Planet of the Apps, on Apple Music. It also has a Dr. Dre drama series.
Today’s report follows stories this month from India saying that Apple is in the mix to spend about $1 billion for the film and music content library of Eros Group, the country’s largest movie producer.
Apple can easily afford these investments: It had $261.5 billion in cash on its books at the end of June.
But it’s late to the online programming game: Netflix, Amazon, Hulu, and HBO have well established services, and a pipeline of original offerings. Netflix spends about $6 billion a year on content, roughly on par with Time Warner’s spending at Turner and HBO, but behind Fox, Disney, and NBCUniversal which also invest heavily in sports.
And while Apple is keenly interested in content and services, its investors would look askance at initiatives that might dilute the company’s rich profit margins. Apple shares have appreciated 49% over the last 12 months, in part due to optimism about the prospects for the iPhone 8 which many investors believe will be introduced in September.