Bidding for the James Bond franchise took an unexpected turn recently. Reports emerged that the Hollywood studios competing for the distribution rights to the British secret agent had encountered some unexpected competition: e-commerce juggernaut Amazon.com, Inc. (NASDAQ:AMZN) and iconic iPhone maker Apple Inc. (NASDAQ:AAPL) have joined the skirmish in a story first revealed by The Hollywood Reporter.
With the two tech giants joining the chase, there could be more at stake than film distribution rights. The most likely options are a licensing deal or potential sale of the franchise, which is valued at between $2 billion and $5 billion.
Hollywood vs. Silicon Valley
Time Warner Inc.'s Warner Bros. is said to be the leading suitor, with Sony Pictures Entertainment, 21st Century Fox, and Comcast's Universal Studios in hot pursuit. Reports indicate that with the emergence of the competing bids, Warner Bros. is pushing to conclude the deal. The strength and enduring popularity of Bond could be transformative for either of the tech titans.
In June, Apple hired Jamie Erlicht and Zack Van Amburg, who served as co-presidents at Sony Pictures Entertainment to lead its move into original content. The pair are said to be representing Apple in the negotiations with MGM and Eon Productions, which jointly control the character.
Bond is a pop culture icon and one of Hollywood's longest running and most bankable names. The storyline has produced 25 movies over the past 50 years, with worldwide ticket sales exceeding $5 billion. As one of the last remaining successful independent franchises, obtaining the rights to Bond's legacy would be a coup for any company.
Looking for a big play
For its part, Apple has only recently been pursuing original content, with shows Planet of the Apps and Carpool Karaoke making their debut on Apple Music (though both were stung by harsh critical reviews). Being new to the space, the company has been testing the waters while providing exclusive content to its subscribers.
Recent events reveal that Apple is ready to delve further into the space. The iPhone maker is reportedly planning to spend more than $1 billion for content over the coming year, with CEO Tim Cook saying on the third quarter conference call that it is an "area of great interest."
Amazon is no stranger to original programming. The company has been producing content for more than four years, garnering praise for such award-winning hits as Transparent, Manchester by the-Sea, and Mozart in the Jungle. For all its success, it still lags Netflix. eMarketer reports that Netflix is the top subscription video-on-demand service, with 61% penetration. Amazon comes in second with 36%. Amazon plans to ramp up spending to better compete with its streaming rival, spending an estimated $4.5 billion on programming in 2017, compared to $6 billion for Netflix.
Bond would bring legions of fans and intellectual property ripe for mining.
Netflix has a substantial advantage in the streaming space, having pioneered the technology. The company boasts 104 million subscribers worldwide, adding millions with each passing quarter along with a litany of critically acclaimed and award-winning shows. Amazon is making progress but still trails the streaming leader, while Apple is barely out of the starting gate.
Obviously, this isn't a zero sum game. More than one company will succeed in the space. Bringing home The Spy Who Loved Me would provide bragging rights, and could go a long way toward narrowing the lead.