Apple planning to spend $1 billion on original content

As reported by the Wall Street Journal on Wednesday, Apple has set aside $1 billion in an attempt to acquire and produce original content that they hope will eventually rival the likes of Netflix and Amazon.

This plan could see as many as 10 original television shows, a figure based on the budget of what Time Warner’s HBO spent on content last year. The budget will be controlled by Jamie Erlicht and Zack Van Amburg who were hired from Sony to oversee content acquisition and video strategy. Apple also recently hired the former WGN America President Matt Cherniss who will oversee development of the video unit.

Of course, Apple’s main rivals Amazon and Netflix are already hugely invested in original content but another problem lies with the company having to avoid jeopardizing the 15% cut of subscriptions it gets from the App store for services like HBO GO.

To gain traction, at least one of Apple’s shows must be a hit. Up until now, initial efforts ‘Planet of the Apps’ and ‘Carpool Karaoke’ have failed to bring much attention and the company are still yet to reveal ratings for the show.

Apple is hoping that its efforts toward original content will increase appeal in iTunes movie rentals which last year generated a $4.1 billion in revenue although its share of the movie rental and sales market had declined to less than 35%.

About the Author

Helen is a Digital Copywriter at Precise English, a copywriting and marketing agency based in the UK.