Apple’s original content is further along than you think with 16 new shows in the works

“While off to a disappointing start, (Carpool Karaoke and Planet of the Apps), we believe Apple is making measurable progress in original video content that will begin to contribute to Services growth starting in 2019 or 2020,” Gene Munster writes for Loup Ventures. “Content could ultimately account for $10-$15B in annual revenue (Netflix will do $16B in 2018) and 3-5% of overall Apple revenue.”

“At the helm of the company’s content efforts are Jamie Erlicht and Zack Van Amburg, who Apple hired away from Sony in 2017. Erlicht and Van Amburg ran Sony’s primetime series division since 2005,” Munster writes. “Apple has also hired an array of industry veterans from a range of backgrounds including streaming platforms like Hulu and Amazon Studios, and mainstay media companies like WGN America and Legendary Entertainment.”

“It’s an understatement to say that the video streaming landscape is competitive. Apple, once again, is late to the game but has an opportunity to change the game. Specifically, Apple can change the game around content streaming customer acquisition,” Munster writes. “Just like Netflix, HBO, and Hulu, Apple’s stories and production quality are first class. What separates Apple is the company’s access to 1.3B active devices through which they can subtly encourage adoption. Apple Music’s market share gains over the past two years are a testimony to the power of coupling Services with widely adopted hardware. An unrelated advantage is Apple’s brand, which, at its core, represents quality and attention to detail, and should translate into favorable initial adoption”

“Apple has 16 new shows in the works, comparable to Netflix in 2013 (its first year of original programming) when it had released 13 originals. We expect Apple to spend $900M on video content in 2018, growing to $4.2B by 2022,” Munster writes. “We think that over the next 5 years Apple will ramp its original content investment from an estimated $900m this year to an estimated $4.2B in 2022.”

Read more in the full article here.

MacDailyNews Take: From everything we’ve seen and heard, Apple’s efforts under Erlicht and Van Amburg will produce top shelf content to which subscribers will flock.

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11 Comments

    1. If you look at the track record of the people known to be hired so far, they have made popular, high quality programming. If they have been given anything like the budgets that have been rumoured, they should be making some stunning shows.

      The interesting part will be seeing how Apple will leverage that content. Will it be primarily to sell hardware, or to create greater demand for services?

  1. Getting production quality is just a matter of spending the money. Lots of great Cinematographers, Editors, Cameramen, Lighting Directors, Set Designers, etc.

    Getting quality material to produce is the hard part. Everybody has their wallet open and Apple’s money does not spend any better than the others. Rupert Murdoch has looked at the landscape and is selling Fox studios to either Disney or Comcast after a lifetime of building up his business- that is a tell.

    In the short term the story is going to be go large or go home. Disney is swinging for the fences and has extended Robert Iger’s tenure as CEO to complete the Fox deal and the launch of new streaming services. Murdoch is settling for the OTA Fox Network, TrumpTV (Fox News Channel) and the sports channels. National Amusements is trying to force CBS to take over Viacom which owns Paramount and collection of has been cable channels. Comcast thinks owning NBC, Telemundo and Universe Pictures is not enough and wants Fox as well.

    Netflix and Amazon are pouring in money on content and AT&T will likely be doing the same with HBO and the Warner Studio.

    I do not think this track is a good one for Apple, but they might look at buying out Viacom and CBS- both controlled by super shares held by National Amusements.

    CBS owns the Television Network, half of the CW Network, Showtime, a number of Cable Channels, the CBSN streaming News channel & CBS Sports Channel and can be had for 21.8 Billion. Viacom has the Paramount Studio, Nickelodeon and the MTV, VH1 and BET Channels and can be had for 11.9 Billion. Buying the Redstones out would give them a Premium Channel, a News Channel, a sports channel, an OTA Network and half of another, a movie channel, kiddie channels, Comedy Central and a stable of music channels that could be a great tie in for iTunes and Apple Music.

    This would, however, put them in direct competition with Disney. ABC vs CBS, Disney vs Paramount, etc. Not sure Tim has the stomach for it, but Les Moonves is great and could be a great head of Media operations. Unlike Eddie Cue, he knows what he is doing, having run Warner Brothers Studio and CBS TV before heading the whole CBS Corporation.

    1. “they might look at buying out Viacom and CBS…”

      “Buying the Redstones out would give them a Premium Channel, a News Channel, a sports channel…”

      These sentences have me wondering if you have even the slightest idea of how Apple operates?

      1. Stockholder since about the time of the OSX Public Beta, user since before the Mac.
        Yeah, I know how Apple operates.

        The issue is not Apple but the market they are moving into. Rupert Murdoch is getting out of this end of the business excepting live news, sports and the OTA network. Note he is getting out of content production excepting live events. Like so said, that is a tell.

        Go large or go home is the order of this era. We all know Apple has the money but I am not so sure they have the belly for it.

        Lots of people have come to Hollywood with a pile of cash only to leave later with a smaller pile and not much to show for it. It looks from the cheap seats like Cook is skating to where the puck was rather than where it is going.

    2. “Getting quality material to produce is the hard part” this comment is spot on. Yes, you need good quality Cinematographers, Editors, Cameramen, Lighting Directors, Set Designers, etc. And WRITERS, WRITERS, WRITERS!

  2. Money does not equal quality…just look at the billions that Amazon has spent and what they have put out = garbage!

    Time will tell and Apple buying CBS/Viacom is the worst idea I have ever heard!

  3. I really want to be optimistic, but looking at all the things they could have done over the years, they are just so far behind. I already spend too much on Youtube TV, Netflix, Amazon Prime, Tidal (while waiting for Qobuz) and internet. I never liked iTunes and I suspect the video offerings will be premium priced. But hey, I hope it works out.

  4. How is this original content going to be made available? They never talk about that. Are they going to be like other shows, you rent or buy them by the episode or season? Is it going to be a subscription service like Netflix, where you get access to everything? I’d definitely go for the subscription if the content was decent, but I’d have zero interest in paying for individual shows.

  5. Dubious about Apple’s makeover into a media developer and producer.

    Apple is incapable of making movies and tv shows which threaten their self-image as socially advanced and politically correct.

    Everything they do will be designed to further the public view that Apple is wise and kind and smart.

    And to avoid confrontations with federal regulators, Apple entertainment will be heavily self-censored. In Apple movies, the FBI will never violate constitutional rights, the CIA will never conduct operations on American soil, and the White House’s latest conspiracy theory will be accepted as fact. In other words, the Warren Commission will always be right.

    Not interested, Apple. But if you can do a decent job with Isaac Asimov’s Foundation, I will reconsider.

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