Apple just made its biggest-ever movie acquisition for its AppleTV+ service — "Greyhound," the World War II battleship drama starring and written by Tom Hanks and produced by Sony.
Apple paid Sony about $70 million for 15 years of streaming rights to the film, which cost about $50 million to make, according to people close to the matter who declined to be named discussing confidential business matters. Sony will retain the right to distribute the movie in China, where it could eventually put it in theaters, these people say.
This is also the first time that Hanks, one of Hollywood's biggest stars, has foregone the big screen and is going straight to streaming – a decision that the star himself had to approve before Sony and Apple made the deal, according to these people.
So why did Sony decide to sell this film instead of simply delaying its release, as many studios have done with other films featuring big stars? People close to the matter say that when coronavirus shutdowns forced the cancellation of its scheduled release on Father's Day weekend, June 19, Sony became concerned that the film wouldn't be able to find a slot among the superhero films and franchises that had been delayed from the summer. A source close to the situation tells me that the studio shopped the film to Netflix and Apple, but Apple was willing to pay more.
Apple made the uncharacteristic move to spend $70 million on a film because the star wattage of Hanks and the World War II story line fits with AppleTV+'s focus on prestigious content.
At the same time, production stoppages are impacting Apple's content pipeline, along with every other network and streamer, causing delays to new material for the service.
The film also came on the market at a time when there's more competition than ever, with the recent launches of Quibi and NBCUniversal's Peacock, and with WarnerMedia's HBO Max launching May 27. While AppleTV+ launched with just about a dozen series and films, now that consumers are hunkered down at home, there's more demand for volume.
That's also why Apple is looking to acquire some library content to complement its exclusive originals, according to a person familiar with the company's thinking. Bloomberg reported earlier on Tuesday that Apple is looking to buy old TV shows for Apple TV+.
According to this person, Apple is not interested in investing hundreds of millions of dollars in the most popular shows, such as "Friends" or "The Office," but rather to make smaller acquisitions that will add content while keeping its originals shows as the centerpiece.
Apple and Sony declined to comment.
Introduced last year, Apple TV+ costs $4.99 a month, but customers get a free year of the service bundled with new Apple hardware like iPhones. Apple has not disclosed how many customers it has.
Industry insiders say that with production stoppages, shows are being shopped around to all the streamers. Apple has likely looked at shows who have expiring exclusive windows on competitors like Netflix or Amazon, or shows that have aired in other countries, such as shows from the BBC.