Apple plans to lease a Hollywood hub for filming shows and movies

Since launching in November 2019, Apple TV + has aired a handful of well-known shows and movies, including the hits “Ted Lasso” and “The Morning Show,” but it’s still a relatively small operation compared to well-known rivals. established as Netflix. Inc.

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or Amazon.com Inc.

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Now, with an expansion underway, the company is using big-budget films and a slew of new film and TV deals to set the stage for more direct competition with other tech players.

Apple’s larger footprint in the entertainment capital would strengthen the engagement of the world’s most valuable company in the streaming wars that define Hollywood today. Apple TV + has held a curious position in the industry known for its highly regarded shows but lacking the scale many producers thought it would have, especially given its aggressive push into music and podcasts.

In recent months, investors have come to believe that even a Goliath like Apple will have to double its entertainment offering if it is to compete with subscribers, as consolidations like WarnerMedia-Discovery Inc.

the merger turns the market into an intense brawl. Apple executives seem to agree, announcing a new Leonardo DiCaprio movie last year, record-breaking acquisitions and a slew of other initiatives that open a new chapter for its Hollywood efforts.

But its need for more soundstages speaks to one of the most surprisingly competitive aspects of streaming: securing the space needed to produce shows and movies.

Part of the reason Apple searches for locations for many months, one person said, is that much of the available space in the city has been taken up. With hundreds of millions of subscribers around the world, Los Angeles sound stages are booked months in advance by services that need constant programming, prompting companies to either acquire the space themselves or to lock in multi-year leases.

Another person familiar with the company’s plans warned that a final square foot target has not been determined and could be less than half a million square feet.

Other tech competitors have taken different approaches to establishing a physical presence in Los Angeles. Amazon occupies the vast majority of the space at Culver Studios, a 14-acre expanse where “Gone with the Wind” and “Citizen Kane” were filmed. Netflix occupies several sound stages in the region, but has also built, purchased and developed its own in Albuquerque, New Mexico.

At Apple, Mike Mosallam, one of the company’s senior real estate production managers in Los Angeles, joined in January and helps oversee soundstage strategy. Mr. Mosallum previously worked as director of production planning and studio rental at Netflix.

There have been other indications beyond its real estate plans that Apple’s entertainment ambitions are growing. The company is producing a Martin Scorsese film, “Killers of the Flower Moon,” an Oklahoma-based film that stars Mr. DiCaprio and is filmed in the state.

The rights to make the film sparked a bidding war when they hit Hollywood in 2016, and the attached pedigree has already created Oscar buzz. With a budget of over $ 200 million, it’s an anomaly in today’s Hollywood, an expensive movie that’s not based on a comic book. ViacomCBS Inc.

Paramount Pictures was originally supposed to fund the film, but dropped it as the price rose. Apple stepped in to cover its budget.

Earlier this year, Apple wrote yet another Hollywood-cracking check, setting an acquisition record for the Sundance Film Festival when it paid $ 25 million for the right to release a popular title, “CODA,” on his service. And last week the company signed with the production company of Adam McKay, a director known for hits like “Anchorman” and “The Big Short,” a premier contract that gives it access to the films he product.

Elsewhere in Los Angeles, Apple announced in April that it would expand its existing office presence in the Culver City neighborhood as part of its $ 430 billion U.S. investment pledge. Apple has said it wants to expand its ranks in the region to more than 3,000 employees by 2026, although the expansion is different from its current production space plans.

As dominant as it is in the smartphone industry, Apple is one of the many players fighting for subscribers among streaming services. The stakes of the competition have risen dramatically since the pandemic accelerated plans for studios like Comcast Body

Universal Pictures and Walt Disney Co.

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focus on their direct-to-consumer offers.

The recent announcement that Amazon would pay $ 8.4 billion, including debt, to acquire MGM Holdings Inc. has led some Wall Street analysts to say Apple will also need to beef up its library of offerings if it is to stand out. .

Write to Erich Schwartzel at [email protected]