Apple’s “quality over quantity” approach is paying off at the Oscars

Apple inc

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The boutique store approach to streaming pays dividends with trendsetters.

While Apple TV+ doesn’t have nearly as extensive a catalog as streaming giants like Netflix inc

and Walt Disney co

‘s Disney+ has made it a critical darling. Sunday night’s Oscar win for “CODA” — the first time a streaming service has won best picture — comes just months after Apple TV+’s “Ted Lasso” followed with the trophy for best comedy at the Emmy Awards had taken home.

Launched in 2019, Apple TV+ has opted for a more tactical approach to streaming than its competitors – Netflix, Amazon.com inc

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Prime Video, Disney+ and AT&T inc

HBO Max – who are engaged in an arms race to create as much content as possible.

“It seems that due to missing library and [intellectual property] Portfolio, really tried to keep quality over quantity,” said Michael Nathanson, media analyst at MoffettNathanson.

After CODA premiered at the Sundance Film Festival in January 2021, Apple paid $25 million for the distribution rights to the film, a record for Sundance. The film was shown on Apple TV+ and in a limited number of theaters for a short time.

Led by former Sony Television executives Jamie Erlicht and Zack Van Amburg, Apple TV+ has also struck numerous deals with big-name talent and companies including Julia Louis-Dreyfus, producer Ridley Scott and Imagine Entertainment.

Apple’s streaming offering is part of a push the company has made to diversify its revenue streams beyond iPhones and other hardware sales. Revenue from the services business, which includes Apple TV+ subscriptions, rose about 24% to $19.5 billion for the October-December quarter.

Apple TV+’s “Ted Lasso” recently took home the trophy for Best Comedy at the Emmy Awards.


Photo:

Apple TV/+Everett Collection

While the streaming service, which costs $4.99 a month, accounts for a small portion of that revenue, it’s grown steadily since its launch. According to Bernstein analyst Toni Sacconaghi, Apple TV+ revenue nearly doubled in fiscal 2021, which runs from October through September, compared to fiscal 2020 to an estimated $2.2 billion.

Many people have access to Apple TV+ without necessarily having to pay for it. Apple is making the streaming service available free of charge to Apple device buyers for three months. Apple hasn’t disclosed the number of Apple TV+ subscribers, and MoffettNathanson estimates the service has about 12 million paying customers in the US

Watch an Apple TV+ show and you’ll likely notice a lot of iPhones, iPads, and other Apple products. We analyzed 74 episodes of the streaming service’s top shows, including “Ted Lasso” and “The Morning Show,” to better understand the strategy behind all of this product placement. Photo illustration: Alex Kuzoian for The Wall Street Journal

Along with Ted Lasso, Ben’s groundbreaking Apple TV+ original shows include The Morning Show, a look into the world of television news with a star cast led by Jennifer Aniston and Reese Witherspoon, and new dystopian workplace drama Severance Stiller starring Adam Scott and Patricia Arquette.

Apple has also invested heavily in news and documentary programming, including a weekly show hosted by Jon Stewart.

Landing a successful show is no guarantee of continued success for streaming services. A recent Wall Street Journal analysis of data from subscriber analytics firm Antenna showed that highly anticipated content helped attract large numbers of new subscribers, but only half of those subscribers stayed for at least six months.

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Apple TV’s Severance stars Patricia Arquette and Tramell Tillman.


Photo:

Apple TV+/Everett Collection

Apple occasionally gets into bidding wars for content. It has beaten Netflix and others on several high-profile projects, including Killers of the Flower Moon, an upcoming Leonardo DiCaprio movie directed by Martin Scorsese.

Unlike most of its competitors, Apple lacks a large library of content to search through for its streaming platform. HBO Max relies heavily on sister studio Warner Bros. for library pricing, while Disney has a wealth of content, from its legacy films and shows to everything it inherited when it acquired 21st Century Fox’s entertainment assets – including The Simpsons and Avatar. .”

Amazon’s Prime Video made its own major content acquisition last year by buying legendary film and television studio MGM in a $6.5 billion deal. Apple looked at MGM but passed because it felt the price was too high, people close to the company said.

Instead, Apple has made some smaller deals, such as the rights to Charles Schulz’s Peanuts specials, including “A Charlie Brown Christmas.”

Apple is also venturing into esports to boost interest in its streaming service. It recently struck a deal with Major League Baseball for the exclusive rights to a Friday night game package.

In addition, Apple is among those slamming the National Football League’s “Sunday Ticket” package, which lets users watch every game on Sunday, people familiar with the matter said. DirecTV is the current Sunday ticket rights holder, but that deal will expire after next season.

write to Joe Flint at joe.flint@wsj.com

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