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Apple is making a $1 billion bet on its next big business

Published Aug 16th, 2017 1:33PM EDT
Apple vs Netflix
Image: Shutterstock

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Apple’s TV efforts haven’t exactly taken the world by storm thus far. For starters, Planet of the Apps — which represented Apple’s first foray into original programming — was largely derided by both critics and viewers. What’s more, there’s no indication that Apple’s most recent effort — a spin-off of the popular Carpool Karaoke segment from the The Late Late Show with James Corden will be a huge breakout or even viral hit.

Apple, though, is fully aware that it needs to step up its TV game if it truly wants to compete with the likes of Netflix and HBO, which is why the company hired Jamie Erlicht and Zack Van Amburg — two former Sony executives — a few months back. The duo may not be household names, but they were instrumental in bringing hit shows like Breaking Bad to the masses.

Now comes word via The Wall Street Journal that Apple is finally prepared to invest some major money into its original programming initiative. According to the report, Apple has earmarked $1 billion to be used for developing, producing, and acquiring original content. The fund will be managed by Erlicht and Van Amburg who will apparently have wide discretion as to how to spend that $1 billion.

All told, the Journal relays that Apple is hoping that it’s $1 billion will be enough to bankroll at least 10 new programs, a goal that’s certainly attainable. As a point of reference, it cost AMC approximately $42 million to develop and produce a full 13-episode season of Mad Men. And speaking to Apple’s ambitions, Apple is reportedly aiming to produce critically acclaimed series in the vein of HBO’s popular hit Game of Thrones.

Now as to why Apple’s TV efforts to date have been lackluster at best, that’s an interesting saga in and of itself. Remember, Apple has been contemplating making a big splash in the TV space for years. Not too long ago, rumor had it that Apple was working on developing its own subscription service, though that initiative reportedly fell by the wayside on account of pricing issues. Underscoring Apple’s failed efforts in the TV space thus far, a Business Insider piece from two months ago relayed that some of Apple’s top executives simply don’t appreciate the dynamics of the TV landscape.

“Eddy [Cue] is extremely smart,” a former Apple Music staffer said, but Cue is “very aggressive” in negotiations with people outside Apple. “In that area , Eddy negotiates like they need Apple. Not everybody is on board that they need Apple.” With the music industry, Apple had a lot more leverage than with TV, this person explained.

“They were trying TV stuff, but things would always fall through with networks,” another former Apple Music employee said. This person said that everyone in Apple Music had a great deal of respect for Cue, and that he was a smart guy, but that he could be overbearing in negotiations (“like a dictator” was the exact phrasing).

With Erlicht and Zack Van Amburg now pulling the strings, perhaps Apple’s TV initiative will finally see some semblance of forward momentum.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.