When Bloomberg reported last spring that tech giant Apple Inc. had plans to spend $1 billion a year to produce films that would release in theatres as a way to market them, my initial reaction was the same as when it was announced that the Cupertino-based company had achieved a valuation of $1 trillion back in 2018–“wow, that’s a lot of money.” A billion dollars a year sounds like a lot of money, and it is, however when compared to other big-name streamers like Disney and Warner Bros. Discovery and how much money they spend yearly on original content, that number is quickly dwarfed. To clarify, though, this $1 billion Apple is spending is strictly for their theatrically released blockbusters like Napoleon and Killers of the Flower Moon, and separate from how much they spend for their original content in total, which is reported to be closer to $7 billion according to The Financial Times—still a far-cry from the $30 billion that Disney spends.
Nevertheless, spending that much money on getting your films out to theatres seems like quite the gamble, especially with movie theatres yet to return to their pre-COVID numbers in terms of revenue. It’s a gamble that doesn’t seem to be paying off, as Apple’s Henry Cavill-led action-comedy, Argyle, which had a $200 million budget, debuted in theatres at a measly $17 million. Ridley Scott’s critically contentious war epic, Napoleon, which also had a $200 million budget, barely broke the $20 million mark at its debut, and grossed only a little over the total budget. To quote The Hollywood Reporter, “if legacy Hollywood studios released a $200 million movie with results like these, they would be skewered.”
They’re not wrong. Traditional rules within Hollywood finances note that a film’s gross box office numbers need to be thrice that of its budget to be considered profitable. Money can be recuperated, of course, with merchandising and home rentals, but hitting anything below double the budget at the box office is deemed to be a failure. So how come Apple are continuing to invest such a large sum of money to get films with blockbuster budgets into theatres, instead of simply putting them directly on their streaming service? Well, I can think of a couple reasons.
For one, even though their films have yet to make huge splashes at the box office, they have made splashes elsewhere: The Academy Awards. 2022’s CODA saw Troy Kotsur become the first deaf actor to win an Oscar, and the film took away the evening’s most coveted statuette in “Best Picture,” which resulted in Apple becoming the first streaming service to win the category. This year saw both Killers of the Flower Moon and Napoleon—both titles that underperformed at the box office—receive a total of 13 nominations, with Scorcese’s masterwork notching ten of those nods. Nominations like these put an air of prestige to the content on offer from any studio. Even if Apple continues to not sell tickets at the theatres, they all but make up for it in the hopes that their films will once again be adorned by the judges during award circuits. It should also be noted that for a film to even be considered for the Oscars, it needs to be in theatres for “at least seven consecutive days in the same commercial motion picture theatre, during which period screenings must o us at least three times daily, with at least one screening between 6pm and 10pm daily.”
The prospect of being nominated for more awards may be enough for Apple, as such accolades bring in more subscribers and at-home rentals. Enough of those can offset much of the losses from theatres. Moreover, and this is my second point, let us not forget that this is Apple Inc. A company whose current market cap stands at nearly $3 trillion. It’s a number that sounds almost comical, and doesn’t exist due only to Apple TV+, but rather their myriad of other services and, of course, lineup of immensely popular devices like the iPhone and MacBook. If Apple’s share uptick by even the slightest margin, I’m talking decimal points here, that $200 million budget they spent on some star-filled gamble that fails miserably at the box-office will be made up in literally seconds at the announcement of the Apple Vision Pro 2. This is a company that has the luxury to put out hundred-million-dollar box office busts. As long as those busts come with either more Oscar nods, or alongside the launch of a new product, Tim Cook and Co. will be just fine.