Apple Eyes Move Into Original Programming (EXCLUSIVE)

Apple Exploring Original Programming Move, Could
AP Photo/Jeff Chiu

The moment the media and technology industries have been expecting for years may finally be arriving: Apple is exploring getting into the original programming business.

Sources indicate the Cupertino, Calif., colossus has held preliminary conversations in recent weeks with executives in Hollywood to suss out their interest in spearheading efforts to produce entertainment content. The unit putting out the feelers reports into Eddy Cue, who is Apple’s point man on all content-related matters, from its negotiations with programmers for Apple TV to its recent faceoff with Taylor Swift.

An Apple representative declined to comment.

The scale of Apple’s ambitions vary depending on whom is asked, but one high-level executive who talked with the company said the goal is to create development and production divisions that would churn out long-form content to stream in a bid to compete with Netflix. Apple is hoping to put a headhunting firm on those hires in the coming months, according to source, with the goal of being in operation next year. Unknown is whether the focus is on TV series, movies — or both.

Other sources described the company’s exploration as more of a flirtation, though one pointed to a recent sign that an escalation of interest is clear: Apple is said to have made an unprecedented bid to secure the stars of “Top Gear” when they exited their BBC series earlier this year. But Amazon ended up winning the bidding war for Jeremy Clarkson, James May and Richard Hammond in July.

The prospect of Apple going Hollywood has been bandied about for at least as long as the decade that has passed since Steve Jobs joined hands with the studios to make TV shows and movies available on iTunes. Given the often fractious relationship between the media and technology sectors, there’s often been curiosity as to why Apple doesn’t just build its own content capabilities, if not acquire a studio outright.

Such a move would have huge implications in the content world, potentially setting up a showdown with other streaming juggernauts including Netflix, Amazon and Hulu. Apple’s entry would sharpen a double-edged sword those companies are already swinging at Hollywood: a powerful new competitor that could steer eyeballs away from the traditional pay-TV world but also possibly a new buyer for content from existing studios.

For Apple itself, getting into original programming would be significant, but not necessarily earth-shattering. While financing its own exclusive content would be an interesting strategic shift that could better arm Apple in its global war against other tech giants like Amazon, Google and Facebook to be the ecosystem where users spend the most time, the hundreds of millions — perhaps billions — of dollars necessary to get into TV and movies is chump change to CEO Tim Cook, who has over $200 billion in cash on the corporation’s balance sheet at his disposal.

Given how early Apple is in the process, details are sketchy. It is unclear, for instance, if the company intends to structure itself like Netflix and work with outside production entities or attempt Microsoft’s ill-fated Xbox model, which entailed setting up an internal studio.

Another area where Apple can organically grow its content efforts is in independent film, where the company has quietly been snapping up content on the festival circuit for distribution on iTunes for years. One source familiar with Apple’s efforts in that business says Apple reps have mentioned expanding into original content as a possibility.

Another big question mark is what shape Apple’s content play would take; the company has been criticized for leaving the door open for Netflix’s a la carte model to flourish by opting for a transactional business instead of the subscription VOD route that has proven to get more traction with consumers. Monthly price — if that’s even the model Apple chooses — would be key given the competitive marketplace, though it’s conceivable there wouldn’t necessarily be a price if Apple chose to go the ad-supported route, a path it has contemplated in various iterations of its Apple TV strategy.

That device, which is expected after years of languishing to get a significant upgrade at a press event Apple is hosting next week, could be central to the company’s content plans. With long-developing plans for Apple to employ a virtual-MSO strategy akin to Sling TV or Sony PlayStation Vue still in limbo as content owners drive a hard bargain, it’s possible the company is willing to take on filling the content pipeline itself to at least supplement the service. But it’s highly doubtful the programming piece would be in place by next week, let alone any time this year.

Apple has also shown it’s not averse to pivoting content strategy in the streaming music business, where the recent launch of Apple Music was clearly a response to the success subscriptions have achieved with rivals like Spotify.

Apple Music is also where the company has dipped a toe into original content production for both audio, the format of its celebrity-studded Beats 1 radio program, and video, where some chart-toppers have created music videos with Apple’s backing. Some sources say that the original content efforts could end up being an extension of that strategy.

Episodic video content would be a significantly bigger outlay, though how big will be determined by whether Apple puts an emphasis on long-form scripted fare or hedges its bet with more unscripted content, where YouTube in particular has made a more modest investment betting on digital-native talent.

YouTube recently raised eyebrows by luring MTV programming chief Susanne Daniels to head its original content efforts. Regardless of what strategic direction Apple goes in on the same front, it’s a sure thing that a company as well capitalized and impeccably branded as Apple will attract top-shelf executive talent.

Cynthia Littleton contributed to this report.

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  1. The Netflix model is not a la carte. Excuse my French.

  2. Deezy Gee says:

    I can almost guarantee you Apple will not build a studio. They certainly have the cash to buy one. My guess is that they won’t, that they will contract out to other industry vets to produce content for them… or not.

    I think Apple would rather use the threat of becoming a studio to encourage the other studios to play ball at reasonable prices, so Apple can launch a “one stop for everyone” type streaming service. Historically, they have not been successful as content creators.

    Perhaps the threat of a partnership with Disney/Pixar would be enough….

  3. Veron Thomas says:

    This is terribly written spculative journalism that is just hoping to get some clicks becaus there’s Apple in the title. What news do you actually have? How do you manage to write a 1000 words speculating???

  4. Bill B. says:

    As if we don’t already have enough programming. It is impossible for anyone to keep up with all that is being offered from so many different sources.

  5. If Transparent on Amazon Prime isn’t LGBT enough for you, just wait for Apple TV original programming. Now you can pay $200 for the device which can be controlled by your $700 iPhone to buy shows individually which will be produced by the fine folks at Apple who are willing to use near slave labor to bring you these great devices.

  6. ragu4u says:

    Somehow I envision any programming produced by Apple would be….how shall I say….rotten to the core!

  7. Observing Apple’s business plans is like watching a trailer for a movie based on H. G. Wells The Time Machine.

    1. The company’s executives view Americans as Eloi, child-like creatures to be entertained but never expected to work. Virtually every subsidiary business the company creates does (iTunes) that.

    2. On the other hand, when their executive attention turns to Asia, they imagine Morlocks, of value on for their cheap labor. If Chinese workers start demanding more pay, they’ll move their iPhone assembly to India. They’re always pursing cheaper, more compliant labor.

    That is very short-sighted. Entertained but not working, in the not too distant future Americans won’t be able to afford Apple’s products. We’re already seeing that in the decline of the middle class. And eventually, Apple and its suppliers will run out of countries whose labor can be exploited. What will the company do then?

  8. Apple has the money to do whatever they want, but the thing that they can’t change is their lack of user friendliness. Netflix is a hug success because it installs easily, and provides easy free access to thousands of loved movies and TV series. I’ve been watching Apple and its way complicated and seems out of touch with the average person, appealing mainly to the very young and techies, so I expect their attempt to replicate Netflix will be 1) expensive, 2) complicated and difficult, and 3) trying to get people to buy things right and left like Amazon. ( Once you have Amazon Prime you still have to pay additional fees to watch most of their movies)

  9. k_rodriguez says:

    If you are a apple fan, you should check out Expense Tracker 2.0 which is a unique app for any individual to keep track of the expenses while not forgetting to up-size their Savings. Visit appspace.hsenidoutsourcing.com/expensetracker2-0 and Stand a Chance to Win Expense Tracker 2.0 PRO Version for FREE!

  10. steve says:

    Crapple: trendy, overpriced, garbage for people who can’t shut up about it.

  11. TM says:

    They could just buy a studio with all their cash laying around.

  12. Jacques Strappe says:

    Stick to phones, Apple. Trying to be all things to all people will ultimately destroy a company.

    • Michael V. says:

      This is very true. Count how many Sony products you own today and know this is Apple’s future if they get into content creation.

    • lens42 says:

      I’m seeing a Sony redux. A great consumer electronics company loses itself on the way to becoming a media company. At least they already have the lawyers.

      • Michael V. says:

        Sony’s media/entertainment division is what destroyed Sony’s hardware division. De-worseification destroys companies. Steve Jobs said it best: Focus is about saying no to most projects. Say no to media/entertainment or face the fate of Sony.

      • Charlie says:

        There is a key difference between Sony’s content efforts and that of Netflix/Amazon/Apple. The latter keep their content exclusive to their platform for a period of time as a way to drive sales of their core products. They are not really media companies in the traditional sense. Sony on the other hand is a media company in the traditional sense.

      • twelve01 says:

        Media/entertainment is Sony’s most valuable divisions. Their hardware on the other hand isn’t doing so hot. Diversification. It is also what brought Apple into the music player, phone and tablet markets.

  13. Sam Adams says:

    How courageous and innovative of them.

  14. Bob Hinter says:

    Quick, please, we need someone to come in and rethink the sort of computer with which people make things. Apple has fallen asleep at the switch and have left us with minimal development for about ten years while they’ve pimped themselves out for anything but a computer.

    “Think Different”? I’ve been using an Apple since 1987. I’m thinking its time to get out of using Apple to do my work. Apple is really starting to suck almost as bad as Microsoft all those PC makers that come and go like El Niño.

    C’mon Apple. You have really lost sight of what is possible for the rest of us.

  15. timbocook says:

    Great is it just me who use to manage an apple store and is a Apple fan… Disgusted at the lack of benefits apple brings to the prosumer market anymore…… I can see this baffoon co-starring in apples new shows… The real queens of new York.
    I am guessing he will be in drag like the other managers I use to work with…..

  16. Steve says:

    Just what we need–another streaming service.

  17. It all seems to me that we (all Americans) are headed for a bunch of headless chicken form with feed from all directions but don’s know where it is. I guess it yet another way to keep us all confused & dumb but will certainly will lead to something else, perhaps discard everything & watches to simple basic life.

  18. Apple should buy Warner Brothers

  19. nerdrage says:

    Day-am!

    SELL NFLX NOW!

  20. Pretty sure Apple has had some good ins with Pixar/Disney for quite a while.

  21. Great, more left wing tripe on TV.

  22. BathhouseBarry says:

    MoochZilla will star in Queen Kong

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