Apple Reportedly Planning To Spend $1 Billion On Original Video Content

Apple has been long rumored to be planning to make its own lineup of original video content for its own streaming service. Now, the tech giant is reportedly planning to invest $1 billion to create original TV shows.

This new piece of information was first reported by The Wall Street Journal, which cited anonymous sources. The report claims Apple’s planned investment could lead to as many as 10 new shows by next year with the company’s executives already scouting for possibilities with agencies.

The budget figure reported by the WSJ is about half of what HBO spent last year, and is also around the same amount of what Amazon spent in 2013 when it announced it was going to create its own original shows, as pointed out by MacRumors. With a planned $1 billion budget, Apple hopes to deliver shows that can match the same quality of what its competitors can offer.

The report goes on to say that Apple’s budget will be handled by Jamie Erlicht and Zack Van Amburg. Both were hired by Apple back in June after they exited Sony Pictures Television. Erlicht and Van Amburg are expected to oversee the acquisition of content, while also coming up with Apple’s new video strategy.

They are also expected to be joined by Matt Cherniss, who was the former president and general manager of WGN America. Variety confirmed Tuesday that Cherniss was hired by Apple to oversee its plans for its original content. Cherniss, Erlicht and Van Amburg have previously worked together on the Sony TV shows “Outsiders” and “Underground.”

Although Apple’s planned $1 billion budget may seem quite large, its rivals are already spending way more than that. TechCrunch pointed out that Amazon plans to spend as much as $4.5 billion this year, while Netflix plans to spend up to $6 billion.

That said, Apple could still do a lot with its planned budget. The company could spend around $2 million per episode for comedy shows, or a drama for $5 million per episode, according to The Verge. If Apple wants to outdo something like HBO’s “Game of Thrones,” It would definitely need more money. Forbes reported last year that the sixth season of “Game of Thrones” costs $10 million per episode.

Apple has already dipped its toes into original video programming through its music streaming service, Apple Music. The company has already debuted two shows, “Planet of the Apps” and “Carpool Karaoke.” Apple hasn’t released any data on how the shows are performing in terms of viewership, but reviews aren’t looking too good.

Not only will Apple need to step up its game to compete with its major rivals, but it will also need to avoid jeopardizing its own business. Apple is currently enjoying a 15 percent cut from subscriptions made from the App Store. Users are able to subscribe to services like HBO Go and Netflix through the App Store, and Apple is able to get 15 percent from those subscriptions.