Apples Billion-Dollar Bet on Hollywood Is the Opposite of Edgy

Days before Apple Inc. planned to celebrate the release of its first TV show last spring at a Hollywood hotel, Chief Executive Officer Tim Cook told his deputies the fun had to wait. Foul language and references to vaginal hygiene had to be cut from some episodes of , a show featuring celebrities such as Gwyneth Paltrow, Jessica Alba, Blake Shelton, and Chelsea Handler cracking jokes while driving around Los Angeles.

While the delay of was widely reported last April, the reasons never were. Edits were made, additional episodes were shot, and Apple shifted resources to another show. When was released in August, it didn’t make much of a splash. The early stumbles highlight the challenges ahead as Apple mounts an ambitious foray into showbiz. The company plans to spend $1 billion on TV shows over the next year and has hired a team that’s already bidding for projects against the biggest media companies in the world.

With $262 billion in cash and securities in its coffers, Apple has the money to make as much TV as anyone, but some in Hollywood are beginning to wonder whether it has a clear strategy. The most valuable company in the world, Apple is under the constant glare of regulators, reporters, and competitors. Furthermore, the people who use the hundreds of millions of Apple devices have pretty mainstream views about the brand’s appeal. Macs, iPhones, and iPads are also often in the hands of children—a group unsuited for much of the edgy programming that’s fueled the new golden age of television.

The secretive company says little about its plans. No one in Hollywood knows where the shows will be available to watch, how much they’ll cost, or even how Apple will publicize them. But in recent weeks, a visit to Apple offices in the Culver City suburb of Los Angeles has become as much a rite of passage for Hollywood producers, agents, and filmmakers as dining at Spago. So clues are beginning to emerge, based on interviews with more than a dozen people who’ve met with Apple executives or work there.

The company has had many fits and starts in Hollywood over the past two years, with as many as four different executives claiming to be responsible for its big move into Tinseltown. To lead the latest charge, Apple hired Jamie Erlicht and Zack Van Amburg, former heads of Sony Corp.’s TV studio. The two men have sterling reputations as key members of the studio that produced . They’ve hired other industry veterans to oversee the development of new shows. They also plan to hire at least 70 staffers—including development executives, publicists, and marketers—to fill out their division. “They are professionals with deep relationships with many of the people who make some of the best shows on TV today,” says Jon Avnet, who directed 10 episodes of Sony’s TV show .

Erlicht and Van Amburg have agreed to remake Steven Spielberg’s anthology series  with NBCUniversal and are in the bidding for another show, about morning TV show hosts played by Reese Witherspoon and Jennifer Aniston. Apple wants to have a small slate of shows ready for release in 2019. “I think for both NBC and Apple, it’s about finding that sweet spot with content that is creative and challenging but also allows as many people in the tent as possible,” says Jennifer Salke, president of NBC Entertainment.

However, Apple isn’t interested in the types of shows that become hits on HBO or Netflix, like —at least not yet. The company plans to release the first few projects to everyone with an Apple device, potentially via its TV app, and top executives don’t want kids catching a stray nipple. Every show must be suitable for an Apple Store. Instead of the nudity, raw language, and violence that have become staples of many TV shows on cable or streaming services, Apple wants comedies and emotional dramas with broad appeal, such as the NBC hit , and family shows like . People pitching edgier fare, such as an eight-part program produced by filmmaker Alfonso Cuarón and starring Casey Affleck, have been told as much.

Yet like Netflix Inc., Apple is thinking globally. The company hired Amazon.com Inc. executive Morgan Wandell to oversee its international division and is about to hire Jay Hunt to oversee development in Europe.

All this has led many producers to label Apple as conservative and picky. Some potential partners say they walk into Apple’s offices expecting to be blown away by the most successful consumer technology company in the world only to run up against the reality of dealing with a giant, cautious corporation taking its first steps into a new industry.

Apple isn’t the first tech company to underwhelm Hollywood. Yahoo! Inc. and Microsoft Corp. spent millions of dollars on TV shows before pulling back within a couple of years, frustrated by the slow pace of development and their inability to attract audiences. Even Amazon, at first considered a success story, is now drawing complaints from writers and producers over casting decisions and instances of buying scripts but not producing them. The online retailer also fired its studio chief in October over allegations of sexual harassment.

Streaming video is just one of many fronts in the global battle between technology titans. After years of flirting with Hollywood, Silicon Valley companies are finally writing big checks, spurring a doubling of video production over the past decade. Amazon spent an estimated $4.5 billion this year on movies and TV shows, while Facebook and YouTube will spend more than $1 billion each. Netflix, which plans to spend $8 billion in 2018, dwarfs them all.

Yet no one arouses more interest in Hollywood than Apple. One reason it quickly climbed the list of places to pitch new shows: the almost cult-like attachment many have for its phones. “Their brand is the most important thing,” says Avnet, who’s made shows for Snapchat and YouTube and is in the process of making one for Facebook.

By funding original shows, the company also can remind customers to think of the Apple TV streaming device before the Roku or Amazon Fire TV Stick and to use Apple’s year-old TV app instead of Amazon Prime Video or YouTube. With iPhone growth slowing, the company is looking to other divisions to deliver sales. ITunes, Apple Music, and the TV app are part of its services business, where CEO Cook wants to double revenue by 2020, to about $50 billion.

Yet Apple isn’t trying to compete with Walt Disney Co. or Netflix to become the biggest backer of TV shows and movies on the planet. Instead, the company wants its shows to complement those of other networks and streaming services that consumers already watch on Apple devices. Its new shows, however, will no longer be placed on Apple Music, which will limit its focus to music-related video.

Whether Apple can channel consumer demand in TV as well as it does in smartphones remains to be seen. Around the time Apple delayed the release of , its top brass also decided the TV unit should move up the release of , a reality competition series in which entrepreneurs pitched celebrity investors on their idea for an app, so it would make its debut on Apple Music in time for the company’s Worldwide Developers Conference in June. Apple execs loved the show and thought it would endear the tech giant to software writers. The show wasn’t supposed to be released for a couple of months, and there was no marketing plan in place—a vital step in the age of too much TV. Apple pressed ahead, and the show came and went with little fanfare beyond a couple of savage reviews. The show is “a bland, tepid, barely competent knock-off of ,” according to ’s Maureen Ryan. “There’s no reason” for Hollywood to lose sleep over it, she wrote. Apple is betting the same won’t be said about its broader TV strategy.

    BOTTOM LINE – Apple will spend $1 billion next year on programming for television. By sticking with mainstream shows, it could miss out on viewers who increasingly favor edgier fare.

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