When it comes to AppleHollywood's ambitions are about spending big to win big.
On March 10, the tech giant has 13 shots to win an Oscar via two historic epics,”Flower Moon Killers” And “Napoleon», which received 10 and three nominations respectively. That gives Apple the second-largest haul among major studios and streamers, just behind Netflix's 18 nods and tied with Universal and Searchlight.
But at what cost ? Sources say the Martin Scorsese-directed “Killers” cost a staggering $215 million (including about $40 million in Covid-related costs). In fact, Apple spent at least $700 million to make and market just three films: “Killers,” Ridley Scott's “Napoleon,” and Matthew Vaughn's “”Argyle.” The trio earned a combined $466 million at the worldwide box office, with “Napoleon” leading the pack with $221 million, followed by “Killers” ($157 million) and “Argylle” ($88 million). ).
Apple isn't complaining, at least not about “Killers” or “Napoleon.” A studio source says both films are profitable, supported by ancillary revenue streams. Both ranked among the top 10 highest-grossing films of the past year on Apple's App Store, with “Killers” holding the top spot for four weeks. It's too early to tell how “Napoleon” is doing on Apple TV+ – it debuted on March 1 – but “Killers” is off to a strong start as the most-watched film on the platform in its first 45 years. release days, generating new subscriptions. In the process.
Unlike its rival Netflix, Apple sees the benefit of releasing films in theaters to increase their visibility. “Killers” and “Napoleon” both enjoyed a peak awareness score of 58% in the United States, according to NRG Analytics, while “Argylle” had a score of 45%. The company's think tank believes that making Apple TV+ the exclusive home of high-profile theatrical films brings added value to subscribers.
Yet neither “Killers” nor “Napoleon” shook things up as much as many industry observers hoped. “Argylle,” with its $200 million price tag, is a total disaster. No studio is better placed than Apple to absorb colossal budgets. But even Wall Street is wondering whether the studio's reported billion-dollar annual movie spending might have been better served by increasing product volume rather than making a few nine-figure swings.
“The quality of the films has been extremely impressive and has driven significant demand for the Apple TV+ service,” said Dan Ives of Wedbush Securities. “But the Achilles heel is not quality. They just don't have enough (product). I think that's been the tug-of-war with Apple: They've achieved high quality and won Oscars, but they're short on library in this content arms race.
Since being tapped to launch Apple's film and television businesses in 2017, Jamie Erlicht and Zack Van Amburg have used a brick-by-brick approach to building the studio's library from the ground up.
“There is clearly a recognition of the importance of theater, not only in terms of box office but also in terms of cultural footprint,” says Paul Dergarabedian, senior media analyst at Comscore. “But it’s unclear what the calculus is for deciding what’s appropriate in a movie theater and what should go directly on the Apple platform.”
Apple's studio business is still in its infancy. But just four years into his Hollywood adventure, the tech titan reached the pinnacle of success by winning the Best Picture Oscar for “CODA” (a feat Netflix has yet to replicate) as well as 46 Emmy Awards, including Michael J. Fox documentary “Still.”
And Apple isn't the only one spending big. According to California Film Commission filings, Netflix spent at least $166 million on Zack Snyder's two-part film, “Rebel Moon.” But that figure only reflects “qualified” spending, which is defined as California workers’ below-average wages and payments to state vendors, and does not include talent contracts or marketing. The real cost is likely much higher for two films that almost certainly won't reach the 10 Oscar nominations for “Killers,” given that the first installment received a cold shoulder from critics. (“Rebel Moon – Part One: A Child of Fire” has a dismal 21% Fresh rating on Rotten Tomatoes.) Similarly, Amazon spent $75 million on the psychological thriller “Saltburn,” which grossed $21 million. dollars worldwide at the box office and was shut out on the Oscar nominations front.
A top executive says a course correction on budgets is underway across the company, including at Apple. “The arms race caused all these people to stupidly overspend, and now they're starting to pull back,” the agent said.
Apple has already started to diversify its movie portfolio. The studio is producing a Formula One film starring Brad Pitt and has greenlit Paul Greengrass' thriller “The Lost Bus,” with Matthew McConaughey in the lead. Even though the Formula 1 movie will cost around $200 million, “Lost Bus” won't be in that stratosphere. Smaller bets in the works include the dark comedy “Outcome,” starring Keanu Reeves, Cameron Diaz and Jonah Hill, the latter also a co-writer and director; a Little Richard biopic produced by Ron Howard and Brian Grazer's Imagine Entertainment; and a documentary about Formula 1 driver Lewis Hamilton. The Hamilton document will likely be timed for optimal synergy with the Pitt project in 2025.
Perhaps the biggest question mark concerns Apple's approach to releasing films in theaters. For its first three large-scale releases, Apple partnered with a major studio to market and distribute them: Paramount (“Killers”), Sony (“Napoleon”) and Universal (“Argylle”). But the company might just acquire a full-fledged movie marketing and distribution apparatus.
“There's a lot of pressure for Apple to acquire a major studio,” Ives says. “I still think there’s a better than 50% chance they’ll acquire one in the next 12 to 18 months.”