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Don’t get too excited – Apple’s $1bn programme spend is no game-changer

September 1, 2017 - Martin Hoscik@martinhoscik

There’s been a lot of undeservedly giddy commentary about Apple’s belated foray into original content, with headlines highlighting the firm’s planned $1bn investment in shows and, possibly, films.

As always with Apple and TV, the headlines are likely to end up far more exciting than the end results.

For a firm which has such a strong reputation for innovation, Apple’s set top box is remarkably ordinary and, thanks in part to its high price, losing market share in its home market.

This presumably is where the new iTunes / Apple TV exclusive content comes in but, while Apple’s budget is enough to bag it a few decent shows, it’s not the game changer some of the more breathless coverage would have you believe.

Apple is entering a market in which established players already spend far more on content than it’s planning to. This year alone, Netflix is predicted to spend around $6bn while Amazon, which has a much thinner library than the market leader, will spend around $4.5bn.

To help put the ordinariness of Apple’s budget into more context, depending on exchange rates, $1bn converts into roughly £770million, less than the programming budget of BBC One (£1,115million in 2016/17) and ITV (around £1,025million).

It’s fair to point out that the BBC One and ITV budgets have to fill hours of liner broadcast time, but spending on both is heavily skewed towards peak hours where the big shows are to be found and, unlike Apple, they’re only buying content for a single territory, not globally, so the comparisons aren’t entirely unfair either.

People are used to seeing Apple as a huge upsetter of established markets so it’s natural that they see a large number bandied around in reports and assume it’s poised to do so again in TV and streaming.

But unless it ramps up its spending in future years, Apple’s move into original content isn’t going to trouble its rivals anytime soon.

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