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Apple's New Drama Series Expands Original Content Portfolio

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Apple Inc . AAPL is expanding its original content portfolio. Per entertainment website Deadline, which was quoted by Fortune, the iPhone-maker is developing a thriller drama series , Are You Sleeping , starring Octavia Spencer. The Oscar-winning actor is also one of the executive producers of the show.

Reese Witherspoon through her Hello Sunshine production company is also the executive producer of the drama series, based on the true-crime novel by Kathleen Barber.

This is Reese Witherspoon's second venture with Apple. The actor is already working (also serving as the executive producer) in a yet-to-be titled original television series that features Jennifer Aniston. The series is reportedly set in the world of morning TV shows.

Apple Banks on Hollywood

Apart from Hollywood's well-known actors, Apple is also working with Steven Spielberg's TV production company to resurrect 1980s sci-fi and horror anthology TV series Amazing Stories . Apparently, the company will shell out $5 million per episode for the reboot series.

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Apple is developing an untitled space drama involving Ronald D. Moore, the screenwriter and producer, behind the 2004 reboot of the classic sci-fi series Battlestar Galactica .

Moreover, Apple has also shown interest for the distribution rights of the upcoming James Bond movie. MGM, which controls the rights of the franchise along with Eon producers Barbara Broccoli and Michael G. Wilson, has agreed to cast actor Daniel Craig for his fifth bond movie. The producers have set Nov 8, 2019 as the probable release date in the United States.

Original Content to Boost Services Business

Apple is set to invest $1 billion on original television shows and movies in 2018 through Apple Music. To oversee this business, the company hired Jamie Erlicht and Zack Van Amburg, two former executives of Sony, in June 2017, who have successful productions like Breaking Bad and The Crown to their credit.

Per Fortune, Apple also hired former president of WGN America and Tribune Studios 1 Matt Cherniss - who is overseeing development of the company's video unit. Recently, the company also added Morgan Wandell, a former Amazon Studios executive, as well as U.K. TV executive Jay Hunt (BBC, Channel 4).

So far, Apple has launched two shows namely Planet of the Apps and Carpool Karaoke. The response to these shows has been lukewarm.

Apple is likely to launch streaming service in 2018, which will provide a significant boost to the Services business that includes revenues from Internet Services, App store, Apple Music, AppleCare, Apple Pay, licensing and other services. Apple targets to double Services revenues of $24 billion earned in fiscal 2016 by 2020.

Stiff Competition: A Concern

Apple's $1-billion investment on original content is miniscule compared with Netflix's NFLX $8 billion and Amazon.com's AMZN roughly $4.5 billion.

Netflix and Amazon dominate the space with their award winning series. Reportedly, Amazon is developing a TV series based on The Lord of the Rings novel.

Moreover, The Walt Disney Company DIS is coming up with own streaming service. Disney will start online streaming services for ESPN sports in early 2018. Moreover, the company's branded direct-to-consumer streaming service in 2019 will air Disney movies and TV shows. In this regard, the recently announced acquisition of several major 21st Century Fox assets is a significant addition to Disney's portfolio.

Further, Hulu, a streaming platform jointly owned by Fox, Disney, Comcast and Time Warner presents significant competition.

Currently, Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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