Why Apple needs a bigger Los Angeles soundstage

From the Wall Street Journal’s “Apple Looks to Lease Hollywood Hub for Filming Shows and Movies” in Wednesday’s paper:

Apple Inc. told real-estate developers it wants to lease a large production campus in Los Angeles for its growing entertainment operations, according to people familiar with the matter, a move that would further deepen big tech’s presence in Hollywood.

Apple told development executives it is looking at several possible locations, the people said. The new hub could exceed half a million square feet and would complement Apple’s current arrangement, where the company leases soundstages to film in the Los Angeles area and other parts of the world…

In recent months, investors have come to believe that even a Goliath like Apple will need to double down on entertainment if it wants to compete for subscribers, as consolidations like the WarnerMedia-Discovery Inc.tie-up turn the market into a top-heavy brawl. Apple executives appear to agree, announcing in the past year a new Leonardo DiCaprio movie, record-setting acquisitions and a series of other initiatives that signal a new chapter for its Hollywood efforts…

Part of the reason Apple has been scouting locations for many months, one person said, is that much of the city’s available space has been taken up. With hundreds of millions of global subscribers in play, soundstages across Los Angeles are booked months in advance by services that need a constant churn of programming, prompting companies to acquire the space themselves or lock in leases that last several years.

My take: Spot shortages show up in the strangest places.

8 Comments

  1. Kirk DeBernardi said:
    With potential billions of eyes awaiting, just another sign of Apple playing the long game with content.

    Going well beyond the parameters of just their little set-top box.

    3
    July 21, 2021
  2. Romeo A Esparrago Jr said:
    Once established there , I wonder if Apple will create studios elsewhere (like Disney in Kissimmee FL, Emeryville near Berkeley (Pixar), Skywalker Ranch/Marin). Job creation just like Apple’s other campuses & design centers around the world. Matthew McConaughey, Robert Rodriguez, & other Texans making movies in Greater Austin mayhaps?

    3
    July 21, 2021
  3. Bart Yee said:
    As Apple locks in long term content production leases for sound stages and production companies (a la TSMC Silicon), there may / will be a flight of staff to these hubs and areas. Steady work will attract longer term investment in people and positions, especially as more work appears and competition for existing and newer staff intensifies.

    For LA, this will mean more traffic, more local film and TV shooting, and pressure on housing creation and upward demand on existing housing and prices. Rinse and repeat for other US and Canadian entertainment content hubs.

    Cook, during the upcoming earnings call, should be touting these long term investments as part of its efforts to create US jobs for skilled content creation workers (I hesitate to use the word Hollywood since there will be many other non-Hollywood sites). The way to fight trustbusters is to clearly define Apple’s positive impact on jobs, housing, and state and local economies and the steady downpour / multiplier effect this has on consumer business in general as Apple’s spending ripples outward. Not to mention all the tax revenues it creates too.

    Hook the constituents’ pocketbooks and wallets, and some politicians will be pulled in and persuaded.

    2
    July 21, 2021
  4. Steven Philips said:
    Why not do similar in China? A massive Asian audience and could subtitle some for the Western market. Great Asian epics? Crouching Tiger? They have some very good directors and this might be a great additional tie to Apple there.

    1
    July 21, 2021
    • Bart Yee said:
      @Steven I agree with you in principle but I fear investing in China programs and films production will create censorship problems for Asian markets. Production of content with potentially sensitive themes could be problematic for the Chinese government’s interaction and control of the film industry.

      I would suggest investment in Taiwan instead while still able, otherwise consider investing in the filmmakers and content providers who can work elsewhere in the world. IMO, it’s not about where it’s produced but by whom and their vision and execution. Bring them to where production isn’t hampered and let them loose.

      1
      July 21, 2021
  5. Jerry Doyle said:
    The largest global film industry is Bollywood based in Mumbai, India. India’s population overtakes China this decade, if not already. Also, China is an aging population while India’s population of youth under 25 years is around 45% of the total population. India’s youth thirst to view Bollywood films. Basing a segment of its film production in India affords Apple a platform to sell other Apple products & services.

    2
    July 21, 2021
    • Bart Yee said:
      @Jerry Absolutely agree with your take about India and content creation specifically for that market as well as global distribution for Apple TV+. This would be a huge boost for Apple Services and a long term draw for future Apple products. I’m conflicted about investing right now in India production due to the ongoing pandemic and a drawn out uncertain timeline. But that could mean production leasing / deals could be had at a discount for the near future. Or wait till trends improve and 6-12 month clarity allows more realistic moves.

      2
      July 21, 2021
  6. The global film industry is currently ranked as follows:
    1. Bollywood — India
    2. Nollywood — Nigeria
    3. Hollywood — US
    Ticket sales & movies produced each year are the metrics. 2020 sucked everywhere in new cinema produced. Theaters will rebound but not like AMC shares reflect. Home entertainment will become the norm.

    0
    July 22, 2021

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