Apple announced a massive increase in its programming budget and a price point that undercuts Netflix. | Source: Shutterstock; Edited by CCN
By CCN Markets: The walls are closing in on Netflix. Apple is not only going to debut its streaming video service within the next two months but has boosted spending on its service from $1 billion to $6 billion.
Big Shows, Big Budgets, Big PR
This gigantic capital increase is a vote of confidence in Jamie Erlicht and Zack Van Amburg, whom Apple poached from Sony TV studios following the pair’s incredibly successful run there overseeing original programming.
To those of us who had experience with these executives, the hire was not only a no-brainer but a brilliantly executed surgical strike. Apple has taken a very diligent approach toward creating new programming.
Apple’s flagship premier will be “The Morning Show,” to which it committed to full seasons worth of episodes, at a cost of $300 million. The cast includes Steve Carell, Jennifer Aniston, and Reese Witherspoon.
The strategy of launching a high-profile, extremely expensive, star-driven vehicle duplicates what Netflix did when it began original programming with “House of Cards.”
While one should not expect every show coming out of Apple to cost $150 million per season, its initial slate does suggest Apple is going for the quality approach to programming, a standard originally set by Home Box Office.
Pricing Will Undercut Netflix
Apple TV Plus is apparently going to cost $9.99 per month, substantially undercutting Netflix and priced at just $3 more per month than Disney+.
Whether or not that price point remains the same over time will be determined by how popular the programming is and what kind of demand Apple sees for the service.