Should Netflix be afraid of Apple?

Apple's March 25 event is intended to draw attention to the company's billion-dollar-plus bet on entertainment, an initiative that will put Apple in direct competition with Netflix, Amazon and HBO

On March 25, a delegation of producers, studio executives and big-name actors will enter the subterranean 1,000-seat Steve Jobs Theater in Cupertino, Calif, for one of those Apple showcases, with the Chief Executive, Tim Cook, commanding the stage before a crowd of loyalists.
 

This time around, the focus won’t be on the next must-have device. With iPhone sales showing signs of fatigue, the event is intended to draw attention to the company’s billion-dollar-plus bet on entertainment, an initiative that will put Apple in direct competition with Netflix, Amazon and HBO.

The premiere date for the service is getting closer, with the first of a dozen or more shows likely to start streaming before the year is out. At next week’s presentation, Apple is expected to reveal details of what it has been working on with stars from both sides of the camera.
 

The tag line, “It’s show time,” appeared prominently on the invitations. For many of the show business people, this will be their first trip to Cupertino, the corporate home of their new patrons.

Apple didn’t need stars before, but it needs them now. Although the company was the first publicly traded American firm to be valued above $1 trillion, its most recent earnings report showed flat profits and falling revenue.

So the plan now is not only to sell devices, but to fill them with content. That has led the company into the alien territory of Hollywood, where local customs can clash with Silicon Valley folkways.

Apple is a relatively late arrival to streaming. Netflix, Amazon and Hulu have offered original programming for several years. In 2018, there were nearly 500 scripted television shows available in the United States, with Netflix spending at least $8 billion on new content. 

Apple has decided to put more emphasis on its services — think Apple Music and Apple Pay — to increase revenues. The strategy will include an expansion of Apple News, which is expected to be highlighted at the showcase, and the star-studded streaming service. Apple has negotiated with the likes of HBO, Starz and Showtime to populate its screens, Bloomberg has reported, but the centerpiece will be original programming.

The event at the Apple Park campus in Cupertino is also meant to drive home just how many shows Apple has pulled together. Five series have completed filming. Around a half dozen more are on the verge of wrapping production, according to several people familiar with the shows who were not authorized to speak publicly. And the number of original productions is expected to increase in 2020.

With all that new material, Apple will transform itself, seemingly overnight, from a tech giant into a more general enterprise, with a slate of original entertainment offerings sizable enough to put it in a league with Showtime, Hulu or FX.

Interviews with more than a dozen people who have had dealings with Apple, all of whom said they couldn’t speak publicly about private discussions, suggest that, while the producers and stars appreciate having another deep-pocketed company to pitch, they also have concerns.

Those concerns have arisen from the culture clash that may inevitably come about when a tech company that is used to guarding its trade secrets gets involved in show business.

Players expect to be kept in the loop. But many of the people working with Apple said they have received little or no information on how, exactly, their shows will be released. They also don’t have a clear idea of Apple’s marketing plans for the shows. 

Apple’s entertainment team is based in Culver City, Calif, and is led by two former Sony television executives, Jamie Erlicht and Zack Van Amburg, under the watch of the senior vice president of internet software and services Eddy Cue. Cue hired the Sony veterans in 2017, after Apple rolled out its first original series, a reality show called “Planet of the Apps,” which was a dud. About $1 billion was set aside for them to spend on programming, and they have blown well past that amount by now.

Apple’s entertainment team has not been totally opaque. It has provided feedback to individuals involved in the shows, but it has been tight-lipped about the marketing and rollout plans. 
 

People involved in the coming series also said that Apple executives had expressed squeamishness when it comes to the portrayal of technology in the shows — how exactly are you using that iPhone? Or that Mac laptop?

Apple had no comment on any aspect of its streaming plans.

 © 2019 The New York Times