Apple to launch its own video content: Days after Facebook announced its decision to roll out exclusively produced video content through its Watch tab currently available to select users in the US, it has emerged that the Cupertino-based tech giant Apple too is aiming to compete with streaming services and cable companies with original video content. The Wall Street Journal recently reported that the iPhone maker has set aside a $1-billion budget for producing and acquiring original TV content over the next one year.
With an investment of this scale, the company could easily aim for 10 new shows while matching the high-quality output maintained by service providers like HBO.
A Leap Too Late?
Apple may be gearing up for its grand entry into the world of original video content but the market is already crowded. Both new media and traditional broadcasters have been driven to the point of using lucrative deals to secure original content in face of fierce and growing competition. The effects of the market trends can be seen reflecting in Apple’s revenues from its rental services. The company had confined its focus to renting movies and TV shows through iTunes. However, its revenues from the rental-and-sales business model dropped from 50 per cent in 2012 to under 35 per cent, as per the recent figures.
Apple has also dabbled with producing original content in the past with a reality show, Planet of the Apps, and another show called Carpool Karaoke. However, these haven’t really been received well by the audience.
Stakes are High
On the face of it, Apple’s $1 billion budget may look substantial. But a closer look at the market dynamics reveals that it is mere table stakes. Other market players have matching or exceeding budgets. Amazon spent about $1 billion on content in 2013, HBO spent over $2 billion in 2016, meanwhile Netflix is expected to spend a whopping $6 billion on video content this year. Television and video content are two of the most expensive business, a rom-com episode takes $2 million to make, a drama show episode costs about $5 million per episode. Every episode of the previous season of popular fantasy drama show, Game of Thrones, reportedly costs a whopping $10 million.
Entering the original content market with a $1 billion investment can still turn out to be reasonably smart move as long as Apple can back it up interesting, engaging content. Netflix’s success can be credited to an enviable run-up of acclaimed shows like House of Cards. On the other hand, Facebook’s Watch tab received lukewarm reviews because of its mediocre content line-up.
It all boils down to quality at the end of the day. You can pump in big bucks but it takes interesting shows to make those big bucks count. How Apple will fare on the account remains to be seen.
