Apple planning to make original TV shows and movies as hardware sales soften

While investors seem to remain optimistic about Apple’s future, it’s no secret that sales of the company’s iconic hardware products have flatlined or fallen over the past year.

We’ll have to wait until January 31 to find out how Apple performed over the critical holiday period. But for the moment, its most promising category of revenue has been “services,” which includes things like Apple Music, and which has been on a big winning streak over the past several quarters.

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Now it appears Apple is getting ready to make an even bigger bet in this category. According to a story just published by the Wall Street Journal, the company “has been in talks with veteran producers in recent months about buying rights to scripted television programs. It also has approached experienced marketing executives at studios and networks to discuss hiring them to promote its content.” The Journal cites “people with knowledge of the discussions.”

According to the story, the programming would be part of the Apple Music subscription ($6/month for an individual plan, $9/month for a family plan.) The movie bit is deemed to be “more preliminary,” according to the Journal.

Such a service would bring Apple into more direct competition with companies like Netflix, Amazon’s Prime Video, and HBO. The first two have made their own big moves in recent years, diversifying into original content to differentiate themselves in a hotly contested market. HBO has been in the original content game for decades. Notably, all three offer some of the most popular apps on the Apple App Store.

Though the Journal says Apple is not planning to match the budgets of those three companies at the start, it’s worth noting that Netflix and Amazon started slowly and then expanded after producing a handful of hits. With its almost unlimited ability to generate cash, Apple certainly has enormous resources to develop shows.

The unanswerable question at this point: Would such content truly pay for itself through either more subscriptions or more sales of gadgets? Of course, this could be a strategic maneuver, as the company also continues to hope that broadcasters and content makers might strike a deal to participate in the company’s long-rumored Apple TV streaming service.