Apple can well afford its $1bn foray into content

Netflix, HBO – and now Apple – doing their best to make other television look cheap

Chief executive Tim Cook: in a departure for the tech giant, Apple is expected to spend $1bn on original entertainment content. Photograph: David Paul Morris/Bloomberg

Chief executive Tim Cook: in a departure for the tech giant, Apple is expected to spend $1bn on original entertainment content. Photograph: David Paul Morris/Bloomberg

 

Apple plans to spend $1 billion on original entertainment over the next year, the Wall Street Journal has reported, with sources telling the newspaper that this could result in “as many as” 10 new shows.

A billion is a big number, but not to Apple. At the last count, the company had a cash stash of $261.5 billion. What the outside world will view as a major strategic departure for the tech giant will likely seem a fun experiment for the head honchos in Cupertino, Silicon Valley.

This is what $1 billion looks like: It is more than three times RTÉ’s programme costs. It is a half of HBO’s spend, slightly less than a third of the BBC’s spend and less than a quarter of Amazon’s $4.5 billion investment.

It is also just a sixth of the current annual outlay by Netflix on content (both originals and acquisitions), and from next year, if Netflix bumps up its spend by $1 billion to $7 billion as planned, it will be a seventh.

What kind of shows will Apple commission? Something like HBO’s Silicon Valley without the satire? It doesn’t bear thinking about.

‘The Crown’

The main clues so far come from the names Apple has hired. In June, it was revealed that its plan to “take on” Hollywood would be advanced by Zack Van Amburg and Jamie Erlicht, two ex-Sony Pictures Television executives who had shepherded shows such as AMC’s Breaking Bad and Netflix’s The Crown to global hit status.

But let’s go back to the suggestion that for a sum of $1 billion, Apple will, if the reports are correct, have its brand all over 10 new series. That implies an average series budget of $100 million.

This is a figure that will hurt as it provides yet more evidence that in the industry we still know – just about – as television, there is a new “quality” baseline: entertainment with a price tag of $10 million an episode.

Leading shows from HBO’s Game of Thrones to The Crown have made eight-figures an hour a new norm at the “top” of a market that is propelled by massive US companies. Broadcasters of more modest means will need to do something extra special not to look cheap.

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