Apple Inc. (AAPL) is undergoing a strategic shift in its movie production approach, focusing on cost-effectiveness. This move is spearheaded by the Hollywood studio heads, Zack Van Amburg and Jamie Erlicht, as part of a broader turnaround strategy. The company aims to produce a dozen movies annually, with most productions carrying a budget under $100 million, according to Bloomberg sources. This shift comes after Apple’s recent foray into big-budget movies, including “Killers of the Flower Moon,” “Napoleon,” and “Argylle,” which collectively cost a staggering $700 million but only generated $470.4 million in global box office revenue.
Apple is considering a hybrid release strategy for future films, similar to the approach taken with their recent action comedy “Wolfs,” starring George Clooney and Brad Pitt. This strategy involves a limited theatrical release followed by streaming availability on Apple TV+. This approach is being considered for upcoming releases, including the World War II drama “Blitz.”
This move comes amidst a fierce battle for market share in the streaming landscape. Netflix Inc. (NFLX) dominates the subscription video-on-demand (SVOD) services market with a 22% share in the second quarter of 2024. Walt Disney Co. (DIS) follows closely with Disney+ holding an 11% share, while Apple TV+ sits at 9%, according to Statista. The high stakes are evident in Netflix’s annual content spending, which reaches $17 billion, fueled by a $600 billion revenue opportunity.
Disney has enjoyed significant success in 2024, with established franchises like “Deadpool & Wolverine” and “Inside Out 2” grossing $1.32 billion and $1.69 billion globally, respectively, according to Box Office Mojo. Comcast Corp’s (CMCSA) “Despicable Me 4,” another proven franchise, generated $0.95 billion in revenue.
Apple’s next theatrical release, “F1,” starring Brad Pitt, is scheduled for June. In the meantime, AAPL stock rose 0.18% to $227.94 at the last check on Friday.
