You might have noticed that Apple has been pouring billions into its Hollywood projects. However, this hefty spending spree could soon end due to significant production losses affecting the broader streaming industry. According to Bloomberg, Eddy Cue, Apple's senior vice president of services, urges studio chiefs Zack Van Amburg and Jamie Erlicht to monitor project budgets closely. The goal? To make Apple TV Plus a more sustainable business venture.
Big budget, low viewership
Apple has made headlines by investing heavily in individual projects, often outspending larger streaming giants like Netflix. They have shelled out over US$500 million on movies from famed directors such as Martin Scorsese (Killers of the Flower Moon), Ridley Scott (Napoleon), and Matthew Vaughn (Argylle). Despite the buzz these projects generate, especially during award seasons, Apple TV Plus needs help to draw the same viewer numbers as Netflix.
Nielsen's figures show that Apple TV Plus accounts for just 0.2 percent of US TV views. In stark contrast, Netflix commands a whopping 8 percent. As Apple finds it hard to compete with Netflix's massive viewership, the company has become quicker to cancel its original series. This is a marked change from when Apple TV Plus first launched in 2019. Furthermore, Apple now licenses more content from other providers to reduce its dependence on original series. The company has delayed production on shows like Foundation to stay within budget.
Secrecy and staffing stability
It remains a mystery how many people watch Apple's original content, as Apple keeps its viewership figures under wraps—even from the people making the shows. Despite these challenges, Apple has not laid off staff as rapidly as some rivals like Disney and Paramount. The revenue generated from selling iPhones and other tech products makes it tricky to gauge the financial pressure on Apple's studios.
A changing strategy
The shift in Apple's strategy could indicate a more cautious approach to spending on original content. This is a surprise, given Apple's previous willingness to invest heavily in premium content. However, the streaming industry's landscape is ever-changing, and Apple seems to be adapting to ensure its long-term viability in the market.
Apple's move to closely monitor budgets and delay some production shows a pragmatic shift towards sustainability. It remains to be seen how this new strategy will impact the quality and quantity of content on Apple TV Plus. Apple is re-evaluating its approach to original content in the face of industry-wide challenges.
