Apple has been a sleeping giant in the online TV production space, with many of its original programming efforts coming out of its music platform rather than a standalone video offering. But two of its recent high-profile hires, including top UK TV executive Jay Hunt, have signalled this is about to change.
Apple has been teasing a fully fledged TV service akin to Netflix and Amazon Prime for over two years now, but the famously secretive Silicon Valley giant has given few clues as to what this would look like. When quizzed by analysts in February as to its plans in original content production, chief executive Tim Cook simply promised there are “more things planned” for Apple TV in 2017. Apple TV is the company’s internet-connected streaming device, intended to be a cheaper alternative to traditional cable packages.
The iPhone-maker put a “toe in the water” after it bought popular online TV format Carpool Karaoke in July 2016. It was also found to be the commissioner for the music video for Hotline Bling by Drake, which was released exclusively on Apple Music at the end of 2015 – its first foray into original video programming. While this laid the foundations for its plans to expand into original video, it has so far used its original productions as a means to bolster its music business by placing them on the Apple Music platform rather than developing a standalone TV product. It launched its first two original shows, Planet of the Apps and a spinoff of Carpool Karaoke, this summer.
“Their forays into video in last few years have been very stop-start and not particularly focused,” says Tom Harrington, a research analyst at Enders Analysis.
However, though the company has remained tight-lipped on its plans to become a competitive TV content creator, the talent it has acquired in recent months speaks volumes.
In June it hired longtime Sony Pictures Television presidents Jamie Erlicht and Zack Van Amburg – who oversaw huge TV hits such as Breaking Bad, The Blacklist and Netflix original The Crown – in newly created posts overseeing its worldwide video efforts. Last week it poached Amazon’s international TV executive Morgan Wandell to head up creative development of worldwide video.
Now the company has signalled its intent to succeed both locally and globally with the hire of Jay Hunt, one of the UK’s most prominent TV executives and most recently creative chief of Channel 4, to lead a new programme commissioning team in Europe.
Netflix made a rare appearance to press this week at the Westminster Media Forum in which it detailed its ambitions to work together with local industries, including the BBC in the UK, to produce content that brings “local stories, culture and talent to the rest of the world”. It's something both Netflix and Amazon underestimated when they first experimented with original content; how localised TV has become as a medium, when each country has its own distinctive style. But Netflix cottoned on to this when it produced The Crown, a show that had all the hallmarks of a BBC production, to many accolades.
In fact, only one foreign production made it onto the UK’s top 150 shows last year, according to Harrington. This is because “people like stuff they can relate to”, he says. He cites original productions like Amazon’s Transparent and Netflix’s audience figures from some of its originals that are the “same size as a syndicated network TV on cable but not enormous” as evidence that these original productions aren’t sitting as well with local markets as the two streaming services would have you think.
“There is disproportionate coverage in press about Netflix and Amazon originals which skews what people are actually watching,” he adds.
But it is difficult for global companies like Netflix and Amazon to create TV content that is applicable in all the markets they operate in (Netflix is only absent in three countries) in the way localised broadcast TV already does.
This is where Jay Hunt, who has held positions at three British broadcasters and is credited with sparking Channel 4's creative renaissance since her arrival in 2011, comes in.
“If you have someone like Jay Hunt who knows the local market, knows all the production companies, knows what works, it is a massive advantage,” Harrington says.
Gavin Jones, head of video operations and people at Havas Media Group, says that focusing on a local content offering in the UK or more broadly across Europe “would give them a distinctive USP” than their competitors.
“Hunt brings with her a wealth of experience, success and there is an expectation that she'll be able to recreate that inside the subscription/internet TV sphere,” he adds.
What will this content look like?
The tech company is reportedly aiming to have a "small slate" of TV shows ready to debut in 2019, but exactly what this will look like remains a well-guarded mystery.
Apple Insider reported yesterday (26 October) that the company is taking a conservative stance to its content, with shows unlikely to have any controversial material, violence, profanity, or nudity. The company is said to be turning down show pitches with anything akin to risque content, such as an eight-part series by Children of Men director Alfonso Cuaron, starring Casey Affleck, and its rumoured reboot of Steven Spielberg's Amazing Stories is unlikely to have any controversial material.
Whatever this content looks like, Paul Verna, principal analyst of video at eMarketer, believes the company is “in this game to win”, with its $1bn commitment to original shows proof of this. While Netflix and Amazon’s content budget is bigger, at $6bn and $4.5bn this year respectively, the budget split between original shows and acquisitions is not disclosed, so Apple’s original budget could well be on par with theirs.
However, transforming from a Silicon Valley giant to a Hollywood company is a “spectacularly difficult game”, believes Verna.
“You can crunch all the data and throw all your money at it but what makes a hit is very uncertain, it is mercurial. Amazon for instance has made questionable calls passing on shows like the Handmaid’s Tale,” he says.
This is also where Hunt can help. While online streaming platforms have the advantage of being able to make content choices informed by their algorithms rather than by a select group of commissioners, data doesn’t always translate into viewers. Alex Gardner, head of The Story Lab, says Apple will need to combine the "art" of someone like Jay Hunt with the "science" of someone with a more data-led approach.
Yet even if it can carve out a competitive advantage by focusing on the allure of local shows, this will be irrelevant if the company has left it too late to launch itself into an already saturated online TV market. Where in certain industries there are benefits to having a late mover advantage – to observe the successes and failures of competitors – Gardner doesn’t believe this applies to the entertainment market, which could be facing a crash.
"A potential problem on the horizon could be a ‘crash’ in the entertainment market that would torpedo Apple’s efforts. Consumer spend has gone up and up and up in this space and a keen entertainment fan could easily spend £200 a month across various different experiences to get all the content they want and there’s likely to be a ceiling eventually," he says.
“Apple, as the late player to the market place, might fall victim to this unless they have a truly unmissable slate,” he adds.
What’s more, scripted shows – Hunt’s expertise – are particularly competitive. In the US there are over 500 scripted shows in production right now, not just from online streaming services but from basic cable channels who are “feeling the pinch” and being forced to differentiate themselves with big format shows, according to Harrington. This not only makes it harder to be ‘original’, but drives up the costs of talent and production.
“There is this expectation now that everything has to look amazing," Harrington says. "Once you have seen Game of Thrones everything else looks cheap; that is the other pressure in price. You can’t have cheap hits."
Additional reporting by John McCarthy