Smartphone maker Apple Inc. (AAPL) is stepping up its game in the context of a "content arms race" among disruptive tech giants and traditional media players. A new partnership with Oprah Winfrey reflects the Cupertino, California-based company's push to carve out a share of the evolving entertainment industry, which increasingly revolves around direct-to-consumer streaming platforms.
Apple heads off in the content war alongside leading subscription-based streaming service Netflix Inc. (NFLX), Amazon.com Inc. (AMZN), Alphabet Inc.'s (GOOGL) YouTube, Walt Disney Co. (DIS) and now AT&T Inc. (T) with HBO, among others. The new multiyear deal with Oprah for new original programming will be released as part of a lineup of original content from Apple, the company said in a statement Friday.
Apple declined to discuss financial terms of the deal, and did not specify whether Winfrey will appear in any of the shows. She is expected to have an on-screen role as a host and interviewer. (See also: Comcast, Disney Vie for a Key Fox Asset in India.)
Hollywood Content Wars Heat Up, Driven by Cash-Laden Tech Titans
In an interview with CNBC, Dan Ives of GBH Insights indicated that Apple could spend as much as $2.5 billion to $3 billion on content per year, compared to the under $1 billion it currently spends. For comparison, Netflix currently spends $8 billion and is forecast to perhaps shell out as much as $10 billion on original programming next year. According to the incoming head of AT&T’s entertainment division, HBO's new owner is also planning to double down on original content, investing billions to create more large-budget shows like "Game of Thrones" and "Westworld," as reported by Bloomberg.
Deep-pocketed media and tech titans have been quick to pay hefty sums to lock in producers, showrunners and performers. Over the past year, Apple has inked deals with bigwigs and stars such as Steven Spielberg, Reese Witherspoon, Kevin Durant and Octavia Spencer. The new talent is seen as helping Apple with its content strategy, as the firm brings its expertise in app development, distribution and marketing to the table. (See also: Can Disney Spend its Way to Content Dominance?)