Things are about to heat up in the digital content game because one of the worlds largest and richest companies is going to throw its hat into the ring. The new word on the streaming street is that Apple is exploring ways to produce original content, though its unclear at the moment what kind of content and just how Apple will distribute it to itsuser base.
According to Variety, Apple has been meeting with Hollywood executives for a few weeks, poising the company for a leap into the original content sphere. Although Apple didnt officially comment on the story, the expectation is that the company is looking to be competitive in the streaming sphere with Netflix, Amazon, and Hulu.
Right now, Apple has a VOD service run through iTunes where you can rent digital movies for a 24-hour play period, or straight-up purchase digital content a la carte. For television watchers, Apple has created the Season Pass, which will push pre-purchased episodes of your favorite TV show to your Apple device the day after it airs on television.
Its possible that original content is the first step to Apple setting up a streaming service of itsown, likely based on monthly subscriptions like Apple Music, itsSpotify competitor. That would require new deals for large swaths of Apples currently licensed catalog, something the companycould be working out behind closed doors right now. A new streaming service to stay competitive in the digital market would benefit from eye-catching original content, the Dr. Dres Beats 1 station of video, if you will.
Its unclear what route Apple will take to cull original video content for itsservice. Netflix has had a lot of success partnering with outside entities and production companies to produce thier shows, but Apple is a large enough entity already that they could create their own in-house movie studio or straight-up buy a smaller one to bring under the Apple umbrella. Apple is already somewhat familiar with the small studio model as they have been distributing indie films on VOD for several years.
Previous attempts to create in-house studios from scratch have proven ill-advised (right Microsoft?), but the comparison between investment in film and TV and investment in technology ends up making video look like chump change. Take Yahoos acquisition of NBCs Community: that show was allowed to stay at a budget of $1 million per episode because Yahoo has billions of dollars in advertising revenue. Apple could fund a couple of blockbuster films off three weeks of new iPhone sales.
At this point, Apple is not talking about if itsgetting into streaming for itselfor will begin to make itsown content to license. The assumption would be that the company is looking to be competitive as most of our broadcast entertainment migrates online to chase the money cord-cutters and tweens have been taking off-air. The companycould seek to lure big-name talent to the streaming realm, or it could make like YouTube and try to grow digital content producers into bigger things. Single films and unscripted (reality or competition) shows are probably on the cheaper end of the spectrum, while mini-series and ongoing scripted TV shows would be more expensive. Either way, the rumbling you hear is everyone watching Apple trying to decide how it plans to throw the first punch when it joins the battle royale that is the online streaming content realm.