Apple’s film engagement to exceed $1 billion; The question is: should it distribute and market a theatrical film, or should it license?

The media news cycle is abuzz today over a Bloomberg article claiming that Apple will spend $1 billion annually to produce features for the big screen. This is good news for exhibitions, yes. But in reality, if the streamer did the math, he’d already be spending billions on a feature board.

Apple’s deep wallet gives it the financial firepower to take any project off the table, and it has. If we calculate some of the budgets now available for large packages they have acquired, the financial commitment could be well over $1 billion. Martin Scorsese Killer of the Flower Moon priced between $150 million and $200 million; the self-titled Jon Watts-George Clooney-Brad Pitt film is estimated at around $100 million; Matthew Vaughns argyle package is worth about $200 million; Ridley Scott Napoleon at least US$100 million; and the Joseph Kosinski-Brad Pitt Formula 1 film, originally reported between $130 and $140 million, is now closer to $200 million. So these five films alone cost $800 million. And features of this magnitude each require at least $100 million in global R&D spending.

It’s still unclear if deals will need to be renegotiated once the pictures hit theaters. Streamers usually buy up the talent backend upfront. With such great talent and filmmakers, it only makes sense to give them a big boost on the big screen. Apple paid $120 million for the Will Smith liberation Film that had no reported box office dollars in its limited release and no downstream earnings either.

killer of the flower moon, which is about to have its world premiere at Cannes, will be released sometime this year via Paramount. Apple will desperately need a theatrical and distribution partner for future films, and Paramount could be a contender. This is similar to how Amazon Studios distributes and markets its films; Before building an internal infrastructure, the streamer was released by other studios, including Lionsgate or STX.

Outside Killer of the Flower MoonApple has yet to make any commitments to theatrical studio partners.

If Apple is going all out, why not set up its own in-house marketing and theater departments? Especially when it comes to tying up billions and money is no object. That way, says a distribution insider, “they’re in control of their own destiny” and don’t have to negotiate release dates or distribution costs with a distribution partner.

At Amazon, his biggest success before its $8.5 billion acquisition of MGM was winning several Oscars Manchester by the sea ($79 million at the global box office), which was released in 2016 by Roadside Attractions. This year, Amazon was in control of its own destiny with inside sales/marketing belief III, which opened to $100 million WW. It’s their biggest opening of all time, while the threequel is also easily the highest-grossing film of all time at $226.7 million. There are more movies on the Amazon big screen that the Ben Affleck-Matt Damon Artists Equity film was centered around, Heaven from Prime Video to its theatrical debut over Easter weekend.

It’s all part of a major rethink of streaming strategy and recognition of the increased awareness that a major theatrical release can bring to these streamers. apples KODA was barely in theaters before winning the Oscar for Best Picture last year, along with the feeling that Apple put a lot of money on the table with it.

Apple isn’t breaking out its streaming TV subscribers, which are part of the services division, including music and other platforms, all of which help power Apple’s vast ecosystem. It has fewer subscribers than stream leaders Netflix and Disney. Natch, the thinking is that launching a movie on the big screen is more publicity for the streaming service itself in its quest to gain subscribers.

Amazon is similar in that Prime Video is an asset, and according to CEO Andy Jassy, ​​a very valuable one in driving members to Amazon Prime, the world’s largest loyalty program.

Major studios, from Warner Bros. to Disney, are also pushing more theatrically now than they have since Covid and streaming.

It’s all good news for cinema chains, which have been shuttered by Covid and suffered from a lack of major releases in the fourth quarter – from AMC to Cinemark to Imax. It was picked up this year. Royal parent company Cineworld filed for bankruptcy last fall.

Show stocks outperformed a rising market today, with AMC Entertainment closing up 3% at around $4.50, Cinemark up nearly 6% at $13.24 and Imax up 2% at $18.

Apple did not respond to a request for comment, nor did they confirm the Bloomberg article that the tech company spends $1 billion annually to produce feature films.