Apple Increases Spending On Original Programming

Reports indicate that YouTube and Facebook have been outspent by Apple with regards to original programming. Additionally Apple has also emerged as a threat to Netflix as it has bid aggressively for original content. The reports further indicate that Apple is planning to unveil its slate of original programming early next year.

Since last year in October Apple has ordered a total of 12 original shows. Per The New York Times of the 12 nine did not go through the normal pilot-episode stage. While it had initially been reported that Apple had allocated approximately $1 billion for the purchase of original spending, it has now emerged that the iPhone maker has surpassed this amount. However that poses no danger as it has ample cash reserves. At the close of last year Apple’s solid cash balance amounted to more than $285 billion.

Late to the party

The aggressiveness of Apple is understandable as the Cupertino, California-based tech giant is late to the party. Currently the online video streaming market is dominated by companies such as Netflix, Amazon Prime, YouTube, HBO, Hulu and Comcast. Competition in the space is expected to intensify as more players enter the market. Media and entertainment giant, Disney, is for instance expected to unveil a streaming service. A few months ago Disney added to its content portfolio when it acquired the assets of 21stCentury Fox.

The cord-cutting phenomenon is expected to intensify thus ensuring the continued growth of streaming services. According to Markets and Markets, a research firm, the compounded annual growth rate of the online video streaming sector is expected to be between 18.2% in the next five years.

Focus on quality

In its history Apple has come to be associated with quality products and the situation is not expected to be any different with regards to original programming. Though Apple is aggressively purchasing content, the iPhone maker will probably not adopt the high volume strategy of Netflix. Rather Apple’s strategy appears to be to hire renowned Hollywood talent in order to provide quality content.

The original programming unit of Apple is for instance led by two ex-Sonny executives – Zack Van Amburg and Jamie Erlicht. The division has consequently inked deals with big names such as Steven Spielberg, Jennifer Aniston, Octavia Spencer, Francis Lawrence, Reese Witherspoon and Damien Chazelle. Recently Apple also signed a lease for building that will house its original programming division. Currently the unit has about 40 employees.

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