Inc is planning to build a significant new business in original television shows and movies, according to people familiar with the matter, a move that could make it a bigger player in Hollywood
and offset slowing sales of iPhones and iPads.
These people said the programming would be available to subscribers of Apple’s $10-a-month streaming-music service, which has struggled to catch up to the larger Spotify AB. Apple
Music already includes a limited number of documentary-style segments on musicians, but nothing like the premium programming it is now seeking.
giant has been in talks with veteran producers in recent months about buying rights to scripted television programs. It also has approached experienced marketing executives at studios and networks to discuss hiring them to promote its content, said people with knowledge of the discussions.
In addition to TV, Apple
indicated to these people that it is considering offering original movies, though those plans are more preliminary.
Executives at Apple
have told people in Hollywood
they hope to start offering original scripted content by the end of 2017.
The shows Apple
is considering would likely be comparable to critically acclaimed programs like “Westworld” on Time Warner
or “Stranger Things” on Netflix.
Because it is looking at just a handful of carefully selected shows, and potentially films, it doesn’t appear Apple
is preparing to spend the hundreds of millions or even billions of dollars it would need to spend annually to become a direct competitor to Netflix
com Inc’s Prime Video or premium cable networks.
Rather, it would escalate the arms race between Apple
Music and Spotify, which both offer essentially the same catalog of tens of millions of songs, by adding other content that could distinguish Apple’s service.
Nonetheless, the entry of the world’s most valuable company into original television and films could be a transformative moment for Hollywood
and mark a significant turn in strategy for Apple
as it starts to become more of a media company, rather than just a distributor of other companies’ media.
In addition to its music-related nonfiction shows and documentaries, Apple
Music already has bought the rights to a half-hour version of “Carpool Karaoke,” which is currently a segment on CBS’s “The Late Late Show with James Corden.” It is also making a quasi-biographical series about Dr. Dre, the rap star and Apple
Music executive, which is slated to premiere later this year.
But it hasn’t yet bought scripted content from outside producers, a more expensive and riskier endeavour that takes it further onto the turf of entertainment
companies. The series and movies Apple
is now considering buying don’t have any particular relationship to music, according to the people familiar with the matter.
One reason Apple
hasn’t yet completed a deal to buy a scripted series is because it is still working out details of its business strategy built around original content. But it has told producers that a key advantage it hopes to offer is that it would share data on how many people watch its original content and some demographic data on them. Netflix
doesn’t share any such information with its content creators, which has been a source of contention among some in Hollywood.
has been flirting for years with whether and how it should enter the entertainment
business. It held talk with television companies about offering a “skinny bundle” of networks over the internet, but was never able to reach terms. It also approached Time Warner
Inc last year about a possible merger before that company agreed to be acquired by AT&T Inc.
The move into original content comes as Apple
is grappling with a slowdown in its traditional business. Last year it missed its own internal revenue targets for the first time in at least seven years as sales of the iPhone
6s fell short of expectations. Sales of the iPhone, which turned Apple
into the world’s most profitable company, have slowed amid rising competition, particularly in China.
Music has become a key piece of the company’s services business, which has been growing as iPhone
sales slow. Revenue from Apple
Music rose 22% in the quarter ended Sept. 24, but the service’s subscriber base is still dwarfed by Spotify’s.
Music said in December that it had more than 20 million subscribers, most of whom pay $9.99 a month; Spotify counted more than 40 million paying subscribers in September.