Apple (AAPL - Free Report) recently finalized a production deal with former HBO executive Richard Plepler per a Bloomberg Report. Financial terms of the deal were not disclosed.
Per agreement, Plepler’s newly launched company, Eden Productions, will produce original series, feature films and documentaries exclusively for Apple’s recently launched streaming service, Apple TV+.
Notably, Plepler became co-president of HBO in 2007, leading HBO to successfully create shows like The Sopranos, Game of Thrones, True Blood, Boardwalk Empire, and News Pioneer ("The Newsroom"). However, he exited after HBO's parent company Time Warner was acquired by AT & T (T - Free Report) in February 2019. During his tenure, HBO won more than 150 Emmy Awards.
The collaboration with Plepler is expected to provide an impetus to Apple’s original content expansion strategy to penetrate in the immensely crowded streaming space.
Apple’s Strong Content Makes It a Potent Challenger
Apple’s robust original content portfolio that includes shows of different genres like See, The Morning Show, Dickinson and For All Mankind is a key catalyst.
The company recently premiered Servant, its latest original series, which is a new thriller from acclaimed director M. Night Shyamalan at the BAM Howard Gilman Opera House in Brooklyn, NY.
This followed the premier of Truth Be Told, a limited series from Aaron Paul and Octavia Spencer about America's obsession with true crime, which was launched on Dec 6 last month.
Although the company’s content portfolio is not as expansive as Netflix (NFLX - Free Report) or Disney’s (DIS - Free Report) Disney+ (due to the inclusion of 21st Century Fox content), Apple’s focus on partnering with Oscar winning content makers as well as popular Hollywood stars is expected to be a game changer.
The company has inked major content deals with the likes of Oprah Winfrey, Octavia Spencer, Steven Spielberg, Francis Lawrence, Damien Chazelle, M. Night Shyamalan and Kristen Wiig. Also, its shows like See and The Morning Show feature the likes of Jason Momoa and Reese Witherspoon & Jennifer Aniston, respectively. Furthermore, the feature film The Banker stars Anthony Mackie and Samuel L. Jackson.
The aforesaid factors are expected to help Apple create a place for itself in the intensely competitive streaming market. Per ResearchAndMarkets.com, it will witness CAGR of 19.1% between 2019 and 2025.
Competitive Pricing Key Catalyst
However, Apple TV+ is one of the latest additions to the increasingly-crowded streaming space, currently dominated by Netflix and Amazon’s prime video. Other notable incumbents include Disney+, HBO max and NBCUniversal’s Peacock.
Apple’s competitive pricing of $4.99 per month and focus on expanding its original content portfolio, as indicated by the recent pick-up in hiring, is a major growth driver. We believe its expanding content portfolio is likely to aid subscriber growth in the near term.
Apple currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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