Apple Inc. (AAPL), the world’s most valuable company, is mulling a billion-plus dollar foray into movie theaters and sports streaming in an attempt to drive subscriber growth for its Apple TV+ streaming platform.
Apple is expected to spend $1 billion a year to produce movies for theatrical release. The company is reportedly in talks with movie studios to partner on the releases of upcoming movies by Martin Scorsese, Ridley Scott, and others. The company is also reportedly considering bidding on the streaming rights to English football games.
The new plans constitute a significant increase in Apple’s entertainment spending that could be part of an effort to draw more interest in Apple TV+, which lags behind rivals in subscriptions. Apple TV+ has an estimated 40 million subscribers, compared with at least 200 million each for Amazon’s (AMZN) Prime Video and Netflix (NFLX).
Apple also lags behind rivals in content spending. The company spent about $6.5 billion on movies and television in 2021, while Amazon and Netflix spent $9 billion and $17 billion respectively.
So far, Apple’s greatest streaming success has been in television, with the acclaimed series Ted Lasso. The business of releasing movies for wide theatrical distribution may be more complex, particularly given theater chains’ struggles to rebound from COVID-19 and fend off competition from streaming services. Movie ticket sales are about a third below 2019 levels. Chains like AMC Entertainment Holdings Inc. (AMC) have attributed the sluggish sales to a shortage of available films.
Apple’s distribution agreements may help boost ticket sales, and it is not the only tech company entering theaters. Amazon acquired major studio Metro-Goldwyn-Mayer for $8.5 billion last year and now plans to make up to 15 movies for theatrical release each year. In each case, Apple and Amazon may attempt to drive streaming viewership by later releasing those films on their respective platforms.
Apple’s interest in adding English football games to its streaming platform follows last year’s $2.5 billion 10-year streaming deal with U.S. Major League Soccer. Terms of a potential deal between Apple and the UK’s Premier League have not been disclosed.
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