Apple AAPL has inked a first-look film and TV deal with famous Hollywood director, Martin Scorsese.
Per the multi-year deal, Scorsese will produce film and TV projects for Apple TV+ streaming platform through Sikelia Productions that he founded in 2003.
Apple had previously announced it would produce Martin Scorsese’s upcoming drama Killers of the Flower Moon, starring Leonardo DiCaprio and Robert De Niro. The movie will appear on Apple TV+ after it is distributed in theaters by ViacomCBS VIAC-owned Paramount Pictures. Moreover, it will be his second production for any OTT platform, the first being The Irishman on Netflix NFLX.
Apple’s focus on partnering with Oscar-winning content makers as well as popular Hollywood stars is expected to be a game changer and strengthens Apple TV+’s competitive position in the streaming market currently dominated by Netflix, Amazon prime video and Disney’s DIS Disney+.
Expanding Content Portfolio to Aid Apple TV+ Prospects
The recent deal is the latest in a series of agreements signed between the streamer and high-profile talent. To date, Apple has signed overall and first-look deals with internationally acclaimed studios, including Appian Way, founded by Leonardo DiCaprio and co-run by Jennifer Davisson, Idris Elba's Green Door Pictures, Ridley Scott's Scott Free Productions, A24 and Imagine Documentaries, as well as trusted studios for kids and family entertainment, Sesame Workshop and Peanuts.
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Although coronavirus-led lockdowns and shelter-in-home directive have played havoc with the production schedule, Apple TV+ has a number of shows in the pipeline including Boys State (Aug 10), which it acquired at Sundance for $12 million in a partnership with A24 and Ted Lasso (Aug 14).
Apple’s WWII drama Greyhound, starring and written by Tom Hanks, which it purchased from Sony for $70 million amid the closure of theaters during the height of the pandemic, has become the largest opening-weekend release ever for Apple TV+. Beyond generating the largest opening weekend ever for Apple TV+, 30% of Greyhound viewers were new to the streaming platform.
The iPhone-maker is rumored to release a dozen new movies with a year on Apple TV+, with blockbusters lined-up such as Emancipation, the in-development Will Smith film it recently acquired for around $105 million.
Other movies that Apple TV Plus is looking to premiere include Shantaram, which is based on Gregory David Robert's novel, Pachinko, a series that is based on the New York Times bestseller novel from Min Jin Lee, and Uma Thurman-starrer Suspicion based on the award-winning Israeli series, False Flag.
Bundle Offering to Aid Apple TV+ Subscriber Base
This Zacks Rank #1 (Strong Buy) company has been rumored to start offering a service bundle that combines access to Apple Music, Apple TV+ and other services such as Apple Arcade, for a single monthly subscription cost of $30. You can see the complete list of today’s Zacks #1 Rank stocks here.
Apple News+ and Apple TV+ are not as popular as Apple Music, so a bundle could drive top-line growth and also keep users even more tied to its ecosystem.
Continued momentum in service offerings amid coronavirus-led lockdown is expected to aid Apple in the near term, Notably, Services (22% of sales) revenues grew 14.8% from the year-ago quarter to $13.16 billion in third-quarter fiscal 2020.
Notably, Disney+ is benefiting from Disney’s bundle offering that comprises ESPN and Hulu. Disney+ is expected to have between 60 million and 90 million subscribers globally by the end of fiscal 2024. However, based on the current coronavirus-driven momentum, Disney+ is expected to surpass the lower end in 2020. Notably, as of Aug 3, Disney+’s subscriber base had already surpassed 60.5 million, the lower-end of the target which is encouraging for Apple.
Netflix, by contrast, has more than 192.9 million subscribers. Nonetheless, Apple has already been pushing its services business with tempting offers like free Apple TV+ for one year on new iPhone/iPad purchases or an affordable students' bundle of TV+ and Music. A bundle offering could further boost that effort.
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