Apple on Emmy quest with big bet on video streaming

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Television is one of the few screens that Apple hasn’t conquered, but that may soon change.

The world’s richest company appears ready to aim for its own Emmy-worthy programming. Apple lured away two longtime TV executives Jaime Erlicht and Zack Van Amburg from Sony Corp. in June and has given them one billion US dollars to spend on original shows during the next year, according to a Wall Street Journal report quoting unnamed people.

The programming would only be available on a subscription channel, most likely bundled with the company’s existing Apple Music streaming service.

Apple declined to comment.

While one-billion-US-dollar is a lot of money, it’s a drop in the bucket for Apple and its 262 billion US dollars cash hoard. But it’s still enough to vault Apple into the top tier of tech-industry outsiders producing their own slates of television shows.

AP Photo

History not repeating

Hollywood has long shuddered at the thought of Apple training its sights on TV the way it once did on the music business.

Almost 15 years ago, Apple’s then-CEO Steve Jobs convinced record labels to let the company sell digital music on its iTunes store for 99 cents a single, a deal the music industry was happy to take in the face of growing music piracy enabled by Napster. Over time, though, Apple’s dominance in digital music chafed music executives, who saw the company siphoning off a chunk of their profits.

Movies and television have proven much harder for Apple to crack. The company’s interest in transforming television has been an open secret for years, but Hollywood has so far spurned Apple’s efforts to make itself an indispensable digital middleman for video.

Apple CEO Tim Cook speaks about the Apple TV during an event at Apple headquarters in Cupertino. /Reuters Photo

In a way, Netflix beat Apple to the punch with its groundbreaking video streaming service. It also helped unleash a crescendo of creativity in Hollywood. Follow-on rivals Amazon and Hulu also boast popular video streaming services, and mainstream broadcasters such as CBS and Walt Disney Co. – the owner of ABC and ESPN, among other networks – are also jumping in.

Business necessity

All of that has increased the pressure on Apple to step up its game in TV – not least because the increasing popularity of streaming is hurting its business of renting and selling video from iTunes.

Apple “doesn’t want to be left behind,” said Debby Ruth, senior vice president of consumer research firm Magid. “This is a way for them to put a stake in the ground.”

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This year, the company released its first two original series. But neither show has generated much buzz or critical acclaim.

The recent hiring of Erlicht and Van Amburg signaled Apple’s intent to make bigger splash. The executives have helped orchestrate several TV hits.

Apple also has a not-so-secret weapon: hundreds of millions of iPhones and iPads already in the hands of faithful fans. It could easily transform those into a marketing platform to lure users to its TV service.

Making it in Hollywood

But the company has a steep hill to climb.

Netflix has more than 100 million worldwide subscribers and a video library that will add 1,000 hours of original programming this year alone. And HBO has become the Emmys’ pacesetter since branching into original programming 20 years ago.

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Both companies vastly outspend Apple’s reported production budget of one billion US dollars.

Apple is still experimenting in TV, said Gene Munster, a longtime Apple watcher and managing partner with the research and venture capital firm Loup Ventures. “In five years, I bet Apple will either be investing ten billion US dollars a year in content or zero,” said Munster. “It’s going to be one or the other.”

But if Apple decides it needs a little more help in video streaming, Munster thinks there’s in one-in-three chance that it will buy Netflix to instantly gain the cachet and expertise in TV programming that it craves.

Source(s): AP