Apple Making Big Investment In Original Content

Apple Inc. (NASDAQ:AAPL) is planning to invest about $1 billion over the next year in acquiring and producing original TV shows. Apple is reportedly looking to match the high-quality content of networks like HBO. According to a source with knowledge of the matter, the investment could result in as many as 10 new shows.

Making original content is expensive. Season six of Game of Thrones is reportedly costing HBO $10 million per episode. A good drama can carry a fee of $5 million per episode and comedies cost around $2 million per episode.

The market for original content is getting crowded, as both traditional broadcasters and new media are seeking original hits. Netflix is expected to spend more than $6 billion on original content in 2017. HBO spent about $2 billion on content last year. Amazon spent around $1 billion in 2013.

Adding exclusive video programming to Apple’s music streaming service could help attract new subscribers. Apple’s business of renting TV shows and movies through iTunes has been damaged by the rise of subscription services. It has been estimated that the company’s share of the movie rental-and-sales market has fallen from 50 percent in 2012 to less than 35 percent now.

Apple launches its original television series, reality show Planet of the Apps, on Tuesday starting at 9 p.m. PDT. The first episode will be available for free streaming to anyone around the globe who wants to see it on iTunes and the show’s website. The rest of the episodes will be released each Tuesday on Apple Music for the streaming service’s subscribers.

The 10-episode Planet of the Apps is a reality show about the world of app developers trying to bring their ideas to market. The show shares a number of similarities with ABC’s Shark Tank. Developers try to interest celebrity mentors with a pitch of their product. Musician appears as a judge with actresses Gwyneth Paltrow and Jessica Alba, who have launched successful businesses, and entrepreneur Gary Vaynerchuk.

Eddy Cue, Apple’s senior vice president of Internet software and services, said the company is also planning an adaptation of comedian James Corden’s Carpool Karaoke idea. A documentary about Sean Combs will begin airing in June and another about Clive Davis will follow.