Background information
Apple TV+ – marketing in Netflix’s clothing
by Luca Fontana
How Apple TV+ is changing its strategy
21.5.2020
Translation: Eva Francis
Apple TV+ wants to be more like Netflix and Amazon Prime and is, as is reported, introducing third-party content. Tom Hanks’ upcoming movie «Greyhound» could be the first licensed movie.
A change of course seems to be happening in Cupertino, California. This is what the media company Bloomberg has reported. Apparently, the Californians don’t only want to offer their own productions – originals – on Apple TV+, but also licensed films and series produced by third parties.
This would make Apple's streaming business model much more similar to what Netflix and Amazon Prime offer. The latter have always included originals as well as thousands of third-party films and series, made possible with investments in the millions. By comparison, Apple TV+, which was launched last November, only offers 30 in-house productions.
An insider report by deadline journalist Mike Fleming Jr. supports Bloomberg's rumour. According to this, Apple TV+ is said to have secured the exclusive distribution rights to the upcoming Tom Hanks film «Greyhound». The film should have been released on 12 June 2020,
but the plans seem to have changed.
The problem ahead
What does Apple's change of plan mean? It’s possible that the Californians are worried they might not be able to keep their 33 million subscribers happy with their current streaming catalogue in the long term.
As a reminder, Apple launched its new iPhone and iPad products last autumn – almost simultaneously with Apple TV+. Anyone who bought an Apple product back then got a year of Apple TV+ for free. This mean most of the 33 million subscribers aren’t paying customers.
That's not the problem, as the free year of Apple TV+ free year probably served to boost sales of Apple equipment. A marketing investment, so to speak. I called it the «most expensive customer loyalty programme ever» at the time. After all, Apple invested 6 billion dollars in its own productions.
What are Apple's chances?
The Apple TV+ offer is good, but just not very large. Disney, for example, also offers original content only, but has about 500 films and 350 series, thanks to strong brands such as Pixar, Star Wars or Marvel.
Apple is forced to react.
Apple TV+ must adapt to the competition
In this context, reacting means offering more content. Movies and series that aren’t only included in the Video on Demand (VoD) paid service, but are available for free to Apple TV+ subscribers. The model could work similar to Amazon Prime, with third-party series with several seasons often being available for free to prime subscribers. All except for the latest season, which subscribers have to pay for.
Seems like Apple has taken a first step in this direction. At least that’s what the above-mentioned report by Deadline journalist Fleming claims. There hasn’t been an official confirmation.
Fleming reports, however, that Apple has beaten Netflix to the worldwide distribution rights for «Greyhound» – Tom Hanks’ latest film. The commitment is said to cost around 70 million dollars. Whether Sony Pictures, the studio that should have distributed the film for the cinema, will receive a further bonus in addition to this sum – a fee per screening, for instance – remains a matter of speculation right now.
Either way, Sony should be reasonably satisfied with this sum, as «Greyhound» has a production budget of 50 million dollars, without marketing costs. But the marketing costs shouldn’t have been immense. Therefore, the warship film is likely to make the film studio money. Maybe even a profit – no given in times of closed cinemas.
Could the pandemic pave the way for a new era in which more and more movies end up directly in the catalogue of streaming services?
Streaming services instead of cinema – not only since Corona
It’s hard to estimate the effects of the Corona crisis on Hollywood, cinema distributors and cinema chains. But it’s definitely not the first time that a streaming service replaces a cinema.
Netflix, for example. Two years ago, the Californian streaming company bought the distribution rights to Andy Serki's «Mowgli» for 100 million dollars – starring Benedict Cumberbatch and Christian Bale, among others. A year earlier, Netflix splashed out on acquiring «Ex Machina» maker Alex Garland's «Annihilation» – starring Natalie Portman.
And last year, Netflix «saved» Martin Scorsese's «The Irishman»: the film was supposed to have been produced by Paramount Pictures. Because Scorsese's movie «Silence» had been a box office failure and Paramount wasn’t prepared to take the risk of another flop, Netflix jumped into the breach – with a budget of 140 million dollars. Although the film didn’t win any Oscars, it was nominated for ten.
As you see, there are enough examples for Apple TV+ to follow.
Luca Fontana
Senior Editor
Luca.Fontana@digitecgalaxus.chI write about technology as if it were cinema, and about films as if they were real life. Between bits and blockbusters, I’m after stories that move people, not just generate clicks. And yes – sometimes I listen to film scores louder than I probably should.
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