Apple Joins The Premium Video Arms Race

Apple is reportedly ready to fuel more premium TV content; it intends to spend $1 billion on original material, according to The Wall Street Journal.

While this sounds like a lot, the biggest digital media producer, Netflix, promises a massive $6 billion budget. In addition, it continues to sign major TV talent, such as TV producer Shonda Rhimes.

Apple’s outlay is equal to Amazon’s TV production -- also $1 billion.

The erosion of broadcast ratings was due to rising cable networks' programming and content. Now there is a new rival. Digital media is eating into both broadcast and cable TV.

John Landgraf, chairman of FX Networks, derides the glut of premium TV programing on all platforms -- broadcast, cable, and digital platforms -- which is now around 425 shows. He says they cannot all be financially supported.



Why is Apple -- a massive digital device, computer, phone, and tablet company -- looking to join the Netflix-Amazon-Hulu race?

Because it learned a valuable lesson in launching the iTunes/App Store over a decade ago -- content drives digital device use. And premium digital video lures all sorts of companies.

For Apple, it will lift Apple TV OTT set-top boxes. At first glance, $1 billion may seem like a lot of money. But according to sources, it will finance 10 TV series, adding to the 425 total.

Apple, of course, has loads of cash. Is it truly interested in this proposition long-term? The ups and plenty of downs in producing long-lasting TV content is legion. Or is Apple thinking about something else?

One thing is certain -- Apple will take a decent bite.

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