Now Showing: Apple Movies

See on it big—or small—screen. Can the company’s plans to show movies in theaters boost its streaming service?

People are accustomed to watching movies from major Hollywood studios on Apple devices. But now, in a twist, people can watch Apple movies in Hollywood theaters.

As part of its efforts to drive subscribers to its new Apple TV+ streaming video service, which launches on November 1, the company plans to partner with movie exhibitors to screen its films in theaters first before making them available on its platform. By giving its films an exclusive theatrical run, Apple is aiming to generate publicity from movie distributors and attract top-tier creative talent who still value having their work appear on the big screen.

“Theatrical is still the largest marketing megaphone for movies,” says Henry Topping, a senior client partner with Korn Ferry’s Media, Entertainment, and Sports practice.

Apple’s theatrical release plan, coupled with a cheaper price point for its streaming video service ($4.99 for Apple TV+ versus $9.99 or more for other services), is also an attempt to offset some of the competitive disadvantages it already faces. For one, the company is launching its streaming video service not only against established players such as Netflix, Amazon Prime, and Hulu, but also new platforms like Disney+, HBO Max, and NBC’s Peacock. Those services feature larger libraries of new and old TV shows and movies than Apple and entrenched subscriber bases in the tens of millions. 

Jamen Graves, a Korn Ferry senior client partner who specializes in leadership and talent consulting, says Apple’s “dipping its toe in the water” approach to streaming video is unlike its approach to new product launches in the past. “It’s inconsistent with the Apple way of introducing game-changing ideas into the market,” says Graves. “We expect Apple to do something new and different here and we just aren’t seeing it. At least not yet.”

That’s not to question Apple’s agility and ability to innovate, however. The company’s track record in disrupting legacy markets or creating new ones is well established. The iPhone, as is well known, didn’t debut until after smartphones were in full bloom, and yet it still came to dominate the market. “They’ve always been a smart and fast follower,” says Topping. “They aren’t really on the cutting edge of risk-taking.” Instead, it tends to see how the market evolves first.

To be sure, given the hundreds of billions of dollars in cash on its balance sheet, Apple’s streaming video service isn’t exactly a big risk. It’s more of an opportunistic attempt to diversify revenue and generate growth in markets adjacent to its core businesses. That’s part of the reason why the company is offering a free one-year trial subscription to its streaming video service to anyone who buys an iPhone, iPad, Mac, Apple TV, or iPod touch. It also has a history of successfully selling entertainment content via its iTunes store.

As William Simon, a senior client partner and global sector leader for Korn Ferry’s Media and Entertainment practice, notes, even if Apple’s movies fail at the box office, that likely won’t keep people from subscribing to its streaming video service. “Positive buzz from theatrical releases can drive subscribers,” says Simon. And negative buzz? “They have plenty of other ways to attract them.”