Apple Plans To Spend $1 Billion On Original TV Programming

Apple (NASDAQ:AAPL) has told content producers that it plans to spend $1 billion on original programming over the next year to possibly kick-start its own video streaming service.

According to The Wall Street Journal, Apple plans to acquire and produce 10 new shows. At the moment, Apple produces two shows, Carpool Karaoke and Planet of the Apps, which are available on the company’s music streaming service. The new shows produced by Apple would also appear on Apple Music, or could be a part of a new, video-only service.

The $1 billion budget will be in the hands of Jamie Erlicht and Zack Van Amburg. The previous co-presidents of Sony Pictures Television were hired this past June to take over all TV programming for Apple.

Erlicht and Van Amburg have begun meeting with Hollywood agents to find shows the company could acquire. They have also hired former WGN America (NYSE:T) President Matt Cherniss to oversee programming development.

If Apple launches a video streaming service, it is entering a competitive field. Already, there is Netflix (NASDAQ:NFLX) ; Amazon.com’s (NASDAQ:AMZN) Prime Video; Hulu, which is owned by Disney (NYSE:DIS) , Twenty-First Century Fox (NASDAQ:FOXA) , and Time Warner (NYSE:TWX) ; Alphabet’s (NASDAQ:GOOGL) YouTube TV; and Time Warner’s HBO, which produces the popular Game of Thrones, and has its own popular, standalone streaming service, HBONow.

Not to mention, Facebook (NASDAQ:FB) , Verizon (NYSE:VZ) , and AT&T (NYSE:T) are all looking to debut video streaming services as well.

In comparison to the budgets of these other companies, $1 billion matches the amount spent by Amazon when it joined the video streaming field in 2013. However, Apple will need to expand its budget in the coming years to be competitive. Last year, HBO spent $2 billion on original programming, while Netflix is on track to spend about $7 billion in 2018.

Investors are reacting positively to the news, with shares of Apple rising 0.35% in morning trading on Wednesday.

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