Apple has set aside a reported $1 billion war chest to procure and produce as many as ten television shows over the next year, according to the Wall Street Journal today.
People familiar with the plan said the iPhone maker needs at least one hit for its rumored video-focused service to gain relevance. Apple could also provide the upcoming shows at no charge to Apple Music members, like it’s done with “Planet of the Apps” and “Carpool Karaoke”.
“Combined with the company’s marketing clout and global reach, that immediately makes Apple a considerable competitor in a crowded market where new media players and traditional media companies are vying to acquire original shows,” reads the article.
Managing spending of Apple’s Hollywood war chest is in the hands of Hollywood veterans Jamie Erlicht and Zack Van Amburg, whom Apple poached from Sony in June. The two men oversee Apple’s content acquisition and video strategy and have already begun meeting with Hollywood agents and holding discussions about shows Apple could acquire.
Amburg and Erlicht started working this month from Apple’s Los Angeles offices, where they are taking over programming responsibilities from the Apple Music team, according to sources.
Apple also hired former WGN America President Matt Cherniss, who worked as a production executive at Warner Bros, to oversee development and assist with finding programming.
Apple’s $1 billion budget is half of what HBO spent on content last year and on par with what Amazon spent in 2013, the year after it announced its move into original programming.
This year, Netflix it is expected to spend more than $6 billion versus the annual budget of $2 billion in the year its hit series “House of Cards” and “Orange is the New Black” were released.
An episode of a comedy show typically costs about $2 million versus more than $5 million for a drama. An episode of HBO’s “Game of Thrones” costs more than $10 million to produce.
The $1 billion figure is still a drop in the bucket compared to Apple’s $216 billion in revenue last fiscal year and more than the $261 billion it holds in cash and cash equivalents.