Apple spending $5b on TV to compete with Netflix

It is thought that in years to come we will need a subscription to several streaming services to get all the content we want, very much how the old school mentality was around cable services in the US. The reason? More and more companies are launching their own services to compete and will keep their original content to themselves. To that end, Apple spending $5b on TV content it will make available on its TV+ service shouldn’t be a surprise.

Apple wants to compete with the current big players, but also with the upcoming services all earmarked to be launched soon. Amazon, Disney, Netflix, Disney, Hulu and more will soon make for a very different market than we have now with Netflix dominating the market.

Read: Disney+ streaming service to launch in US, Canada and Netherlands on Nov 12

The company had originally set aside $1 billion for former Sony Pictures Television executives Jamie Erlicht and Zack Van Amburg to court well-known creators and Hollywood stars to its platform. This has now reportedly ballooned to more than $6 billion with a big push for production of original content.

As an example, we recently got a trailer for The Morning Show. This high profile drama about morning television stars Jennifer Aniston, Steve Carrell and Reese Witherspoon (among others) and cost Apple around $300 million to produce the first two seasons. On this basis, it is even more expensive per episode than Game of Thrones’ final season.

This effectively means Apple is spending as much as Netflix did a couple of years ago right off the bat, even before proving their business model works. Of course, Apple has all the cash in the world to burn and as we’ve often seen before, throwing cash at the problem can work. As for this financial year, Netflix is said to be spending $14 billion this year on original content.

For Apple to spend so much money on a service that hasn’t even launched yet makes sense. It will try to take advantage of the hundreds of millions of iOS users around the world. If they are able to convert a sizable proportion of them into loyal subscribers (like they have managed with Apple Music), the business will already have legs even before going after non iOS customers.

With Apple spending $5b on TV, do you think they will be able to compete with the giants in the industry? Let us know in the comments below.