Apple ponders producing movies in light of online video’s expected growth

Apple TV has languished for years, but a big upgrade is expected to be part of Apple’s announcement show next week. And now shadowy sources are telling Bloomberg and Variety that Apple has had talks about producing original content for its own streaming service.

The talks are early, so the unnamed “people in the know” say not to expect Apple original programming — whether movies or “House of Cards” style series — to be rolled out until next year.

An earlier round of talks to line up enough outside content for a streaming service reportedly didn’t go well, meaning such a service isn’t expected to be part of Apple’s Sept. 9 announcement. But that bump in the road might have spurred Apple to think more about making its own content.

Getting into the production business, whether by running its own studio or contracting with top movie and TV talent, would be a leap for Apple. But consider:

— CEO Tim Cook and his team are sitting on more than $200 billion, thanks to its high-margin phones, tablets and other devices.

— Apple has already taken the leap in music with its own streaming service and exclusive audio content such as Dr. Dre’s show “The Pharmacy.” Some exclusive behind-the-scene video with musicians also is part of its new music app.

 
 
You will find more statistics at Statista

— The growth in video is expected to dwarf the growth in music, as this chart shows. Data from Statista’s Digital Market Outlook indicate annual revenues from video streaming and downloads’ growing by more than $6 billion between 2014 and 2020 — almost four times the expected growth of the digital music market.

— Video content providers know this and are driving a hard bargain these days. Producing its own movies, TV shows or both would help Apple fill the pipeline for a streaming service.

The new Apple TV and iPhone devices expected to be announced next week someday could be ways to watch an Apple video service with exclusive Apple content. Amazon, Netflix and Hulu can’t be too happy about that prospect.

“Straight Outta Cupertino”? Stay tuned.

This story was originally published September 2, 2015 at 7:51 AM with the headline "Apple ponders producing movies in light of online video’s expected growth."