Apple Plans to Spend $1 Billion Annually on Theatrically-Released Movies to Enhance Profile of Apple TV+
“Hooray for Hollywood” might be the actual lyrics to the well-traveled old song, but movie studio executives are likely modifying it to “Hooray for Apple” this morning. That’s thanks to a new report from Bloomberg, which states that the iPhone manufacturer is looking to spend $1 billion per year to distribute its original films in theaters.
That marks a decided philosophical shift for Apple, whose original movies like “Emancipation” have thus far mostly headed straight to its streaming service Apple TV+. But taking home the Best Picture Oscar in 2021 for “CODA” has apparently whet Apple’s cinematic appetite according to the report, and more theatrical releases will allow the company to build better relationships with talent, as well as movie theater companies who are still struggling to bounce back from the COVD-19 pandemic.
Another benefit the company hopes to see from its increased presence in theaters is improved awareness of Apple TV+. Apple doesn’t report subscriber totals publicly, but Bloomberg estimates it currently sits at between 20-40 million users. That would place the service far behind the biggest streamers in the industry like Netflix and Disney+, and also trailing more modestly sized platforms like Paramount+ and HBO Max. Apple would not only see more notoriety for Apple TV+ with this plan but would presumably also get the benefit of an additional revenue stream through ticket sales.
The real trick is that Apple has no experience distributing movies in theaters. That’s why it has been approaching third-party distributors, with whom it will have to negotiate marketing budgets and distribution fees. Paramount, for instance, will collect a 10% fee for distributing Apple’s film “Killers of the Flower Moon,” directed by Martin Scorsese and starring Leonardo DiCaprio.
Apple is not the only company firmly entrenched in the streaming space that wants to put more movies back into theaters. In November of 2022, it was reported that Amazon would use its newly-acquired movie studio MGM to produce and distribute up to 15 theatrical films per year. Disney has also committed to longer theatrical windows for its films and will announce a new slate of Star Wars movies headed to theaters at its Celebration event in early April.
In the end, you’ve got to spend money to make money, and Apple is clearly not interested in simply standing pat with its streaming service. In addition to promoting Apple TV+ by spending $1 billion on theatrical releases, the company has been exploring adding more live sports to the service, with rumors of a potential bid on English Premier League soccer rights in the U.K. swirling. Apple is carving out its own path for the future of streaming video, plotting out multiple revenue streams to ensure it continues to be flexible as the industry changes.
Apple TV+
Apple TV+ is a subscription video streaming service for $9.99 a month that includes high-quality original shows and movies including Best Picture winner “CODA,” popular sitcom “Ted Lasso,” and dramas like “The Morning Show” and “Severance.” Apple TV+ is also home to MLB baseball games on Friday nights and MLS Season Pass.