WSJ: Apple has $1 billion to spend on original video content
$1 billion may seem like a big number, but when it comes to show business, it can burn quickly. So, what to make of the news that, according to The Wall Street Journal, Apple has set aside that amount to spend on creating and acquiring video content for its Apple TV and Apple Music platforms? Plenty.
iTunes revenues from content rental have been falling steadily since 2012 while streaming players like Amazon and Hulu have made gains based on acquiring popular franchises and, more importantly, invested in producing original series — Netflix is set to sink $6 billion this year on its programming budget. The Apple Music team has floated test balloons out on its platform, producing “Planet of the Apps” and acquiring “Carpool Karaoke“. The shows got mixed reviews.
The word is that as many as 10 feature-length programs could be on the debut roster — analysts believe that the investment will be a success if just one series gets major audience-side buzz. The company has poached two Hollywood executives from their contracted work at Sony Pictures Television and was able to hire a former president of cable channel WGN America for development.
Apple does have the luxury of $261 billion in cash reserves, but is currently borrowing against its credit to fund manufacturing initiatives and share buybacks in the tens of billions of dollars. That’s to say that if segment earnings don’t pan out in a few years time, Apple could fall back into becoming a tube for content and focus on its core tech ventures.