In an unprecedented move, Apple (NASDAQ:AAPL) has stepped into the realm of film financing and production with “Killers of the Flower Moon,” a 3.5-hour epic featuring director Martin Scorsese and Hollywood heavyweights Leonardo DiCaprio and Robert De Niro. This highly anticipated movie, slated for theatrical release on October 20, marks the most expensive film ever undertaken by Apple’s four-year-old studio, signaling the tech giant’s deepening involvement in the movie production arena.
Apple’s new strategic direction involves expanding its foothold in moviemaking while fortifying its presence in the competitive video streaming market. The company is committed to investing $1 billion annually in movies that will enjoy extended runs in theaters before becoming available on its streaming platform. With “Killers of the Flower Moon,” Apple will premiere the movie in over 10,000 theaters this month and, at least 45 days later, debut it on its Apple TV+ streaming service. A similar rollout strategy is planned for its upcoming Napoleon and Argylle movies.
Apple aspires to establish itself as a destination for acclaimed filmmakers who envision their work being showcased on the big screen. The company believes that backing its films with multi-million-dollar marketing campaigns can potentially convert a portion of moviegoers into new Apple TV+ subscribers.
In the initial stages of its foray into movies, Apple is prepared to operate at a loss. The production budget for “Killers of the Flower Moon” ranged between $200 million and $250 million, yet Boxoffice Pro forecasts its initial ticket sales to fall between $29 million and $38 million, considerably below the expectations of traditional studios for a film of such scale.
Since the conclusion of the pandemic, movie theater attendance has declined by approximately 33% from pre-pandemic levels. Imax Corp, which is set to screen some of Apple’s movies on its large-format screens worldwide, sees Apple’s entry into adult-focused event films as a potential catalyst to lure audiences back to the big screen, emphasizing the irreplaceable value of theatrical launches for certain films.
While Apple TV+ currently accounts for less than 1% of TV viewing in the U.S. according to Nielsen, Ampere Analysis estimates that Apple TV+ subscribers will reach 40 million by year-end, praising Apple’s strategy of offering curated, high-budget, premium original content. Apple’s belief is that Hollywood films and TV shows available on Apple TV+ will encourage iPhone and iPad users to stay engaged with their devices, bolstering its services. This strategy has already proven successful, with Apple’s service divisions, including iCloud, Music, and Arcade, generating $21.2 billion in revenue in the last quarter, establishing them as substantial profit centers for the company.
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