Indie film studio A24 has been on a roll in recent years, racking up 24 Oscar nominations to date across all categories, including taking home an Oscar for Best Picture in 2017 for Moonlight, among other awards. A24 was also responsible for other hit films like Lady Bird, Ex Machina, and Room. A24 was launched just six years ago, and has garnered considerable accolades since.
That growing reputation has apparently attracted Apple's (NASDAQ:AAPL) attention.
Apple is going for quality content
First reported by Variety but subsequently corroborated by CNBC and other outlets, Apple has struck a multiyear deal with A24 to produce original films for its forthcoming video-streaming service. No financial terms have been disclosed, and it's unclear how many films A24 may produce for the tech giant, and whether the films would be released in theaters.
Dominant video-streaming platform Netflix has long been averse to releasing its original films in theaters, instead preferring to use its content to entice consumers to subscribe. That approach has earned the ire of many in the industry, and the company is finally changing its theatrical release strategy. It's worth noting that a theatrical release is also often a requirement for many prominent awards, including the Oscars.
Most of the content that Apple has been buying up in Hollywood are TV series, making this new partnership among its more significant steps toward full-length feature films. Apple confirmed in September that it had acquired the rights to two original animated movies, one of which was made by Oscar-nominated animation studio Cartoon Saloon. Apple is definitely going for high-quality content, and is willing to pay for it.
The deal will not affect other existing distribution deals that A24 has with companies like AT&T's DIRECTV or Amazon.com, and A24 will continue producing other movies, according to Variety. Apple was reportedly even considering acquiring A24 before choosing to partner instead.
Cord-cutting is here to stay, and Apple wants in
Many questions remain around Apple's strategy, although it is reportedly planning on giving away its original content for free to Apple device owners through its TV app. That move would be designed to bolster usage and engagement of the platform, while establishing itself as a meaningful player in the entertainment and media space. Inevitably, Apple would look to introduce a paid subscription service later on as part of its ongoing efforts to grow its services business.
The tech behemoth now has 330 million paid subscriptions within its services business, including third-party subscriptions. CEO Tim Cook gave the most public confirmation over the summer that it is indeed working on a video-streaming service, as well as some insight into his thinking. "Cord-cutting in our view is only going to accelerate and probably accelerate at a much faster rate than is widely thought," Cook said.