Apple is preparing to drastically increase its expenditure in original video content, hoping to eventually compete with the like of Netflix and Amazon.
Analyst Gene Munster for venture capital film Loup Ventures has published a report (via Variety) predicting that Apple will grow its investment in original video content from its current $500 million annual to a whopping $4.2 billion annual expenditure by 2022.
According to Munster, a long-time Apple analyst, this increase is a clear effort to compete with video-on-demand giants Netflix and Amazon.
Despite its efforts, Apple won’t spend nearly as much as Netflix or Amazon by 2022, as Munster projects the companies to spend $8.3 billion USD and $6.8 billion, respectively.
Earlier this year, Apple signaled its intent to increase its expenditure on original content by as much as $1 billion USD, still well short of Netflix’s $8 billion budget toward original and licensed content in 2018. Amazon is expected to spend more than the $4.5 billion USD on original video entertainment this year.
Additionally, Munster’s report suggests that Apple plans to carry out a rebranding of Apple Music in the next 2 or 3 years to reflect its broader scope, which doesn’t just extend to music.
Building from a current base of 30 million Apple Music subscribers, a video-powered Apple video-on-demand service would instantly leapfrog Hulu, which Munster estimates to have between 12 million and 15 million subscribers.
Apple is increasing its expenditure is hopes to grow its Services side of business, which Munster estimates will account for 14% of the company’s revenues in 2017.