Apple is eyeing the Hollywood TV programming market. The tech giant is reportedly setting aside a significant budget to join in the Video Content market.
Apple is setting aside a huge budget for Hollywood Programming
The Wall Street Journal reports that Apple has assigned a $1 billion budget for the acquisition and production of Original Video content in the coming year. The whopping investment would yield as many as 10 original shows. Reports claim that the iPhone maker is looking into releasing original content that will match the high-quality videos of more established competitors such as HBO.
The competition in the original video content market is already heated as it is. The industry is crowded with traditional and new comers that are constantly competing over original hits. The tech giant has previously focused their efforts on making TV shows and movies available for rent in iTunes. However, due to the recent popularity of streaming services such as Netflix and Spotify, Apple’s share in the rent and sale market which was pegged at 50% in 2012 dived down to 35% in the current year.
Apple’s $1 billion budget is relatively minimal compared to the budgets of established competitors. According to The Verge, HBO spent $2 billion on content in the previous year. Amazon spent about $1 billion in 2013 after jumping into the video content industry.
The Wall Street Journal estimates that Netflix will be spending $6 million for its original contents in 2017. Video contents are relatively expensive. The top rating “Game of Thrones” requires $10 million per episode. Comedies and dramas are cheaper, costing about $2 million to $5 million per episode.
The iPhone maker could be a tough competition
Apple’s global presence gives the tech giant an edge in the original video content market. The company has proven its marketing prowess as evidenced by the global sales of its iPhones and iPads. These characteristics make Apple a tough competitor in the video content industry.
The tech giant is not entirely new to the industry.
In fact, it had already produced its own original contents including the “Planet of the Apps” and “Carpool Karaoke”. The Netflix success story tells us that producing one hit show can change the game.
Apple’s budget will be placed under the disposal of two former Soy executives. Hollywood veterans and new executives, Jamie Erlicht and Zack Van Amburg were tasked to oversee Apple’s content acquisition strategy. Penetrating the video business will not be easy but the innovative genius is ready to take the risk.
