← The Town with Matthew Belloni
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- [00:00]
Amy Poehler
Hi everyone, it's Amy Poehler and I'm launching a new podcast called Good Hang. In preparation for that, I asked some of my friends to send in some videos and give me some advice.
- [00:11]
Matt Bellany
Just be yourself and the guests will come.
- [00:13]
Interviewer (likely a journalist or host)
Don't be the celebrity that this is.
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Amy Poehler
Their like sixth thing they're doing.
- [00:16]
Interviewer (likely a journalist or host)
I love true crime and cooking podcasts. Is there any way you could combine the two?
- [00:22]
Amy Poehler
Well everyone has an opinion and a podcast, so join me for Good Hang. It's rough out there, we're just trying to lighten it up a little bit.
- [00:31]
Matt Bellany
This episode of the Town is presented by FX's the Lowdown, proclaimed a gloriously off kilter noir by Rolling Stone. The series follows Lee Raybon, a citizen, journalist and self proclaimed truthsorian, as he exposes corruption and unearths the city's hidden rot from acclaimed reservation Dogs creator Sterlin Harjo and starring four time Academy Award nominee Ethan Hawke. TV Guide raves the Lowdown is easy. Easily one of the best new shows of the year, The Lowdown premieres September 23rd on FX, streaming next day on Hulu. This episode is brought to you by 20th Century Studios New Film Deliver Me From Nowhere starring Golden Globe winner Jeremy Allen White and Academy Award nominee Jeremy Strong. Scott Cooper, director of the Academy Award winning movie Crazy Heart, brings you the story of the most pivotal chapter in the life of an iconic don't miss the movie critics are raving is the real deal, an intelligent, deliberately paced journey into the soul of an artist. Springsteen Deliver Me from Nowhere Only in theaters October 24th get your tickets now. It is Tuesday, October 14th. What exactly is Apple doing in Hollywood? That's a question you hear a lot around town. It's not that the world's most valuable company isn't a welcome presence in the Entertainment business. Since 2019, Apple TV has been one of the biggest buyers of premium, often ultra premium TV shows and movies, usually with major stars and known creators involved. In 2021, Apple became the first streaming service to win the Best Picture Oscar for Coda. And the service has had some momentum lately, with severance and the studio scoring a combined 50 Emmy nominations with the studio winning the top comedy award. But the questions persist around Apple tv, which, which was rebranded this week as just Apple tv. Apparently it's cleaner, and that's because the business model around these services is not totally clear, at least not to people in Hollywood. The economics of streaming, for the most part are about a race to scale, and while Apple has hundreds of billions of dollars at its disposal, it has refused to do things that would help it grow and increase engagement, like build up its service with a library of movies or premium sports rights like the NFL or NBA, though it does have soccer and baseball. And according to my colleague John Arand at Puck, they're about to pick up F1 rights as well. Apple used to give its bigger movie releases a robust theatrical run, but after a few flops that stopped, with this summer's F1 being the exception, that turned into a hit with 630 million worldwide. Even so, Apple hasn't yet committed to any theatrical releases in 25 or 26. Nor does Apple release any data about who is watching what on its service. So what we know comes only from third parties like Nielsen, which reports extremely low engagement in the U.S. apple TV doesn't even register on the monthly gauge chart, but individual titles do pop up as hits like Severance and Shrinking on the TV side, and recent movies like the Gorge or last week's the Lost Bus. More and more of those titles are popping up, which does suggest more and more people are watching the service. That's only domestic, of course, and Apple counters that it's a global service. Okay, but it's all led to an odd situation. Hollywood loves Apple and the kind of content it's making, the good stuff for the most part, but it doesn't quite understand what its intentions are. Is this just a brand building exercise for a company that makes iPhones? Is Apple making money on Apple tv and for how long will it be committed to staying in this business? That's why I wanted to have Eddie Cue on the show, to ask him.
- [04:05]
Interviewer (likely a journalist or host)
If you don't know.
- [04:06]
Matt Bellany
Q. He's the Apple senior vice president of Services, reporting to CEO Tim Cook. He's been at the company 36 years and oversees everything from Apple music to Apple news, podcasts and much, much more. But I first met him when he was just starting to put together Apple tv. And that's what we're going to talk about today. The business model, the momentum from the studio and other recent hits, how the content chiefs Zach Van Amberg and Jamie Ehrlicht are doing the intentions for theatrical, the spending, his interest in buying another studio or even hbo, as has been speculated. Much, much more. Today, it's Eddy Q and Apple's true intentions in Hollywood. From the ringer and Puck, I'm Matt Bellany and this is the town.
- [04:50]
Interviewer (likely a journalist or host)
All right, thank you for doing this. Really appreciate it. I asked you at the Apple Emmy party and you said yes. And then you actually followed through, which is Nice. Which means that you are not a Hollywood person. Because a Hollywood person was. Would have had five publicists figure out a reason why you shouldn't follow through on what you actually said.
- [05:07]
Eddy Cue
So I gotta tell you, I've always wanted to do this. So when you asked, always, yes. Growing up a little more always since we've been doing this. So the fact that you asked, I absolutely said yes. And I'm glad to be here today. It's great to be together.
- [05:24]
Interviewer (likely a journalist or host)
All right, we'll wait till we start the questions. You may rethink that position.
- [05:27]
Matt Bellany
Okay, so the, the rebrand. How many management consultants did it take to tell you to drop the plus from Apple TV?
- [05:36]
Eddy Cue
0.
- [05:37]
Matt Bellany
You just decided?
- [05:38]
Eddy Cue
I just decided. We just decided. Look, we put the plus in there because we've used it in our other services like iCloud and News Plus. But we do that when we have a free service and then there's a paid version. We stayed consistent because of it, but we all called it Apple tv and we said, given where we are today, it's a great time to do it, so let's just do it.
- [06:00]
Matt Bellany
We all call it that anyways.
- [06:01]
Interviewer (likely a journalist or host)
Although I remember when you announced it, Disney was annoyed.
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Eddy Cue
Remember?
- [06:05]
Interviewer (likely a journalist or host)
Because they had Disney coming.
- [06:07]
Eddy Cue
I do.
- [06:07]
Matt Bellany
And now I guess maybe it'll be happier.
- [06:09]
Interviewer (likely a journalist or host)
Maybe when you own them someday you.
- [06:11]
Matt Bellany
Can bring it back.
- [06:14]
Interviewer (likely a journalist or host)
And you know, you now have this.
- [06:15]
Matt Bellany
Confusion, though, potentially with other hardware.
- [06:17]
Eddy Cue
Our hardware is called Apple TV 4K for your TV, I think that's fine. And the app is called Apple tv. It's been called Apple TV on our third party products as well. So I don't think that'll be a problem at all.
- [06:30]
Interviewer (likely a journalist or host)
People in Hollywood are fascinated by you because in part, you guys have been an amazing boon for the industry. The fact that you are spending what you're spending on content, you are making it look and distributed the way that you're making it look and distributing it the way you are. You're working with top tier talent. You're paying for top tier talent. You are doing it in a way that people around town love, which also makes them terrified about what your intentions are in this business.
- [07:01]
Eddy Cue
And I want to talk a little.
- [07:02]
Interviewer (likely a journalist or host)
Bit about that because you guys are the market leader in a number of businesses that you're in by far in some businesses. Yet in Hollywood, you're not. You've been content to be niche. Why is that? Why don't you spend what it takes to be competitive with the big players?
- [07:24]
Eddy Cue
Yeah, we're not content to be niche. We're content to be the best. That's what we're trying to be. We're not trying to be the most, but we are trying to be the best. And that's been the goal from day one. And so I get the fact that it's Apple and we do all these other things and people get nervous about what our intentions are given our size and what we do. But our intentions here have been the same since the day we started. And that is we saw an opportunity to focus on creating great content, not the most. It felt like everybody in the industry had to go to we need everything.
- [08:01]
Interviewer (likely a journalist or host)
Certainly in 2019, that was the feeling.
- [08:03]
Eddy Cue
And so we looked at it and said, wow, this is like I can't believe we would be able to get into this market and be able to compete against people that have been doing this for 100 years or for 20 years. But we saw an opportunity because of this. And so we said, look, let's start something where we're trying to create the best content, the best storytellers, the best stories, create an environment for them to do their best work. And if we do that, we'll be successful. And that's never changed.
- [08:31]
Matt Bellany
Success for you.
- [08:32]
Interviewer (likely a journalist or host)
Is the service profitable? Is Apple TV profitable?
- [08:36]
Eddy Cue
The service is doing fine. Look, it's a lot harder than it looks, as always, because when you try to do things that are great, a it takes longer than you want. I didn't forecast being out of production for a year and a half. I didn't forecast a nine month strike from that standpoint. So we were a little further behind than where I'd like to be. But where we are today is great. Our content has never been better. We now started to have a library because we have shows going into seasons three, four and five and things like that. We've got theatrical movies that have done great. We've got subscribers growing at a much higher rate than are they. Yeah, absolutely.
- [09:13]
Interviewer (likely a journalist or host)
So you guys have not revealed subscribers and the credible numbers that are out there are about 40 million, 45 million, is that right? Is it more than that?
- [09:23]
Eddy Cue
We haven't said what our numbers are, but we're significantly more than that.
- [09:26]
Interviewer (likely a journalist or host)
Significantly more than that.
- [09:28]
Eddy Cue
But we're not going to say what our numbers are. We're happy with where we're growing, but you know, look, we're trying to be successful. Success. Part of success is you want as many people as possible to watch. But when you try to create the best content, it may not be everybody. We don't have content for. We don't have every Genre, every piece of content that you could have. But we think what we're offering, we can get a large set of users than we have around the world.
- [09:51]
Interviewer (likely a journalist or host)
But you said in March, you said when we think about our shows and we think about our products, we're not designing them for a small subset of people. We design them for every.
- [10:00]
Matt Bellany
Everyone.
- [10:01]
Interviewer (likely a journalist or host)
But do you think Apple TV is for everyone right now?
- [10:04]
Eddy Cue
I do, I do. I think we have shows that are for everyone. If you look at a show like the studio, you look at a show like Severance, you look at platonic. Right now, look, our movie, Formula one, is that not for everyone?
- [10:17]
Interviewer (likely a journalist or host)
That is for everyone.
- [10:18]
Eddy Cue
You know, the studio, when it started, everyone said, no one's going to watch this. It's a show about Hollywood. It's an insider thing starring a big comedy stars. That's right. And as the season started, you know, and it went through, it kept growing and growing and growing. And so it grew to, you know, the highest, the highest number of viewers we ever had was by the last episode, which shows growth. So I don't think it's in its show at all.
- [10:40]
Interviewer (likely a journalist or host)
Do you monitor the numbers?
- [10:41]
Eddy Cue
Sure you do? Every day? I get them. Every week? Every week.
- [10:45]
Interviewer (likely a journalist or host)
And do you pick up the phone and call Zach and Jamie and say, what happened here?
- [10:49]
Eddy Cue
No, I don't need to call them. I kind of know throughout the week and what's going on and I'm aware of it. And you know, the numbers are important because they're a scoreboard. But, you know, I measure ourselves. That's a scoreboard that I can't change. What I can change is what we're creating and what we're doing. And that's where I put my energy. If we do that well, what I've always found is a scoreboard always works in our favor.
- [11:15]
Interviewer (likely a journalist or host)
So about a year ago, there was some reporting myself and others that you had communicated to the team in LA that the costs were too high, that spending should come down, and it was sort of interpreted as a come to Jesus moment for TV Plus. Is that accurate?
- [11:34]
Eddy Cue
Look, we've never taken a cut on our spending on, on TV plus. So that. That's not accurate. It is accurate that we are always looking at how we can be more efficient. Are we spending it the right way? Are there areas that we should be spending more on and areas that we should be spending less? We do that all the time and we're gonna continue to do that.
- [11:54]
Interviewer (likely a journalist or host)
And did that moment coincide with the theatrical pullback? Cause famously, you guys pulled back from Theaters. There was a big dust up over Wolf's. Brad Pitt, the director of that movie, were very upset by that. Where do you stand on theatrical for movies?
- [12:09]
Eddy Cue
It's never changed. Look, we look at. We're learning.
- [12:11]
Interviewer (likely a journalist or host)
It has changed.
- [12:12]
Eddy Cue
No, no, it hasn't changed. We have not. We never said from the beginning that when we were doing movies that every movie was gonna be theatrical. We never said that every movie was not gonna be theatrical.
- [12:22]
Interviewer (likely a journalist or host)
But there was a cadence of these movies.
- [12:24]
Eddy Cue
We said, we're gonna make it on a case by case basis and we'll find movies that we think should go theatrical. As we've learned about the theatrical business, we're learning more and more about it from that standpoint. What works, what doesn't work. And so we'll adjust. And we certainly made some adjustment on movies that we thought, you know what? We don't think this is a great movie right now to do theatrically. We think it's a better movie to do on direct streaming. And we'll make that call, and we'll continue to do that.
- [12:52]
Interviewer (likely a journalist or host)
So you have zero movies dated theatrically right now for wide release. Did F1 change that? Are you going. Did F1 was a hit. Will you put more movies into it?
- [13:02]
Eddy Cue
Absolutely.
- [13:03]
Interviewer (likely a journalist or host)
But what is the barometer for that?
- [13:05]
Eddy Cue
But it wasn't because of F1. I want to be clear about that. Sure. Does F1 give you more confidence? You have success, you get more confident. But no. We were planning on doing some movies theatrically in the coming year.
- [13:17]
Interviewer (likely a journalist or host)
Wide releases?
- [13:18]
Eddy Cue
Yeah, wide releases.
- [13:19]
Interviewer (likely a journalist or host)
In 26 you will have wide releases.
- [13:21]
Eddy Cue
We would like to have wide release movies in 26 and 27 and 28 and 29. We'd like to do that.
- [13:27]
Interviewer (likely a journalist or host)
We haven't scheduled anymore.
- [13:28]
Eddy Cue
But we'll make the call. That's right. We're going to make the call as when we think it's the right thing and when we don't think it's the right thing, we won't. We'll go streaming and we'll do a different thing. Or we'll do a smaller release. Like you're saying we don't have to do everything as a wide release. Sure.
- [13:42]
Interviewer (likely a journalist or host)
You understand why that's important to creators. There is a class of filmmaker that very much cares about that.
- [13:47]
Eddy Cue
Yeah, we care about it. Look, we love theatrical movies. Seeing a movie with hundreds of people or thousands of people, there's nothing like that.
- [13:56]
Interviewer (likely a journalist or host)
Yeah, but you don't like the headlines when a movie doesn't open. There's Apple and there's bomb in the headlines. You do not like that, by the way.
- [14:05]
Eddy Cue
Nobody likes that. I know, but that's not unique to me or unique to anybody else. Nobody likes it.
- [14:11]
Interviewer (likely a journalist or host)
You're doing this as a brand halo for the most part. You want to make money in this business. But the rationale I understand for even doing this entire thing is that it's additive to the Apple brand. Bomb is not additive to the Apple brand.
- [14:24]
Eddy Cue
That is not additive to the Apple brand. But no way. We didn't start this as a halo to the Apple brand. I think the Apple brand was doing really well and is doing really well without us. From that standpoint, we viewed that we could build a real, credible, great business in this. Now if we did that, would it be a halo to the brand? Sure, it would be. If we do great things, it always helps the brand. But we didn't start the business because we thought, oh, this is a good halo for the Apple brand.
- [14:50]
Interviewer (likely a journalist or host)
You didn't?
- [14:51]
Eddy Cue
No, not at all. That's.
- [14:54]
Interviewer (likely a journalist or host)
If you do, you had to be a factor. Yeah.
- [14:56]
Eddy Cue
But if you do that, you'll never be successful.
- [14:58]
Interviewer (likely a journalist or host)
Okay, but let's take a step back. Let's say you spend $5 billion a year on content, Right? So if the goal is to keep people in the Apple ecosystem, to keep people in the services aspect of Apple, couldn't that $5 billion be spent differently and have a better return on investment? If you put it into discounting, if you put it into marketing, if you put it into, you know, other things that would grow the services business that have nothing to do with content.
- [15:32]
Eddy Cue
If you were trying. See, that is exactly the point you're trying to make all of these scenarios which potentially could be a halo to the brand or helping the brand. We look at it as a, we look at it as a real business. We're building a real credible. What I think is a wonderful business to be in that is long lasting. It will be, you know, creating content. Movies and TV shows I think will exist 100 years from now. It's a business that we think we can be really good at and that's what we're trying to do. And so that's what we're doing. Those other things are important and we'll do those. But you have to start by the fact that this is a real business that we're trying to do.
- [16:13]
Interviewer (likely a journalist or host)
So the number one indicator of the success of a streaming business, according to your competitors is engagement. Engagement on Apple TV is very low. It doesn't register on the Nielsen gauge most months. And there are things you could do that would increase engagement significantly. Like license a library. And you've chosen not to do that.
- [16:33]
Eddy Cue
I think our engagement is actually quite high for the number of content that we have. That's fair, right? That's fair. And so, yes, you're right. Look, we took an approach that nobody else has ever taken. Everybody else said couldn't be done, which is to say we're not going to license content. We're gonna start from scratch and build everything ourselves. Why is that so difficult? Well, obviously, clearly you don't have a lot of shows around this. And as we talked about, you know, with things, you know, there were some people that were happy when, you know, Covid got delayed some productions. Cause they saved money. Sure. We were not. We didn't have any shows. Right. So we didn't have a huge library.
- [17:10]
Interviewer (likely a journalist or host)
We own a lot of those shows also.
- [17:12]
Eddy Cue
We own more and more. You own more, but biggest names, Ted.
- [17:14]
Interviewer (likely a journalist or host)
Lasso, the studio, others are not owned by you guys.
- [17:19]
Eddy Cue
We own quite a few of them. So we're very happy with that direction. I think partnering in both ways is a good thing. But again, we started with this idea that if we're going to put our brand and we're going to put our name behind something, then it needs to be us. We don't put our brand on other people's products. We don't do it on anything else that we do. And so why would we do this here? And so when you look at a TV show or a movie, if it has that apple logo on it, that's us. We did that. We partnered with someone, we worked with writers, worked with actors. That's important to us. That's what we stand for. And so, yeah, it's going to take some time. I wish I had a larger library three years ago, but today, now we have three or 400 shows and movies that are in our library and it's growing.
- [18:11]
Interviewer (likely a journalist or host)
Quick way to do that is to buy something. And I know everyone thinks you guys are almost about to buy everything under the sun, but why have you not bought something you were interested in hbo. We know that a decade ago.
- [18:25]
Eddy Cue
Look, we talk to a lot of folks. We like learning and talking and listening is a good, good way to learn. But again, I never say no to anything in the future. But it's not our approach. We like building things. We like doing things ourselves and creating them. And we think that that's how we can really stand out and do unique things.
- [18:45]
Interviewer (likely a journalist or host)
So you're not going to buy Warner Brothers?
- [18:48]
Eddy Cue
I would be surprised, but again, I never say no to anything because you never know what happens in the world. But no, look, we like not even Disney.
- [18:56]
Interviewer (likely a journalist or host)
Iger has said if Steve was alive, the companies will be merged.
- [19:01]
Eddy Cue
That's not. Not something, unfortunately. I wish, I wish he was alive. But that's not something we're going to be able to figure out. No, look, we're happy with where our position is and where we're growing and how we're doing it.
- [19:12]
Interviewer (likely a journalist or host)
So you're putting an end to the speculation that Apple will buy any of these companies?
- [19:17]
Eddy Cue
I don't know about an end. I just said, look, I never say no to anything. But we're not, we're not actively looking at buying any company of any size. We like building. Building things ourselves.
- [19:28]
Interviewer (likely a journalist or host)
Your churn is still high and I think it's because you are perceived as a show to show service, meaning something new comes on. If you're interested, you opt in. If you're not, you maybe opt out. What are your strategies to reduce that churn other than just building the library? Is sports helping? Is, you know, doing different cohorts of shows for different audiences helping?
- [19:56]
Eddy Cue
Look, I think our churn is one is it's gotten significantly better over the years for the reasons you just said. As you grow more and you have one show to the next show to the next show that people are going to, it just helps. So that's the primary driver to this. It's creating great content and our churn is in a good position. You know, look, we price at 12.99. We don't have any ads. We're highly competitive. From a price point of view, when you look at any one of our competitors and when you look at the quality of the content that we're offering with no ads, I'll put us up against anybody. So I like our position and where we're headed.
- [20:39]
Interviewer (likely a journalist or host)
Sports business, you guys have been in the mix on a number of these sports rights deals and haven't pulled the trigger on anything. Except for MLS, which is a 10 year, $2.5 billion deal and Friday night baseball. And you are perceived to be negotiating for F1. Is that accurate?
- [20:57]
Eddy Cue
It's accurate that we're on MLS in Major League Baseball, F1 as well. No, look, I'm not going to talk about things we haven't announced or haven't done or anything on F1 or any other sport.
- [21:08]
Interviewer (likely a journalist or host)
Why haven't you pulled the trigger on NBA or an NFL package? You sort of have let Amazon kind of run away with that, being the streaming pioneer there.
- [21:17]
Eddy Cue
Look we said we like really looking at sport a little differently. One of the things that we did with Friday night baseball, we wanted to learn a little bit about sports, so that's why we did it. But it wasn't an end goal of just Friday night baseball. MLS is closer to what we wanted to do, which is we'd like to own a sport end to end so that we can offer customers what we do today, which is you don't have to worry about blackouts. You don't worry about how to watch. We can do picture in picture. We can do all kinds of things that every sports fan wants. I know that I want when I'm watching all these other sports, taking little rights here and there across all these different sports just doesn't deliver that. And so that's not an area that we've been interested in. I read a lot about us being in the thing, and I get that people say a lot of that, but a lot of that gets used because we're big and it helps, you know? Sure sounds that. But I can tell you we are not. We have not been in the bidding process to take chunks of sports well.
- [22:17]
Interviewer (likely a journalist or host)
But you could have taken ufc. That would have been everything.
- [22:20]
Eddy Cue
Sure. Yeah. No.
- [22:21]
Interviewer (likely a journalist or host)
And you didn't get that. Did you want that?
- [22:23]
Eddy Cue
Not something we, you know, we.
- [22:25]
Interviewer (likely a journalist or host)
Not the brand.
- [22:26]
Eddy Cue
Not something we looked at right now. That. Very accurate.
- [22:29]
Interviewer (likely a journalist or host)
You could have taken one of the college sports conferences. Did you look at the Big ten or SEC or one of those?
- [22:34]
Eddy Cue
You couldn't. You couldn't take any of those. Those have all been taken for a while. So now that Pac 12, maybe.
- [22:39]
Interviewer (likely a journalist or host)
Well, yeah.
- [22:42]
Eddy Cue
Sorry.
- [22:44]
Interviewer (likely a journalist or host)
I'm a cow guy, so I got to make a PAC12 joke.
- [22:46]
Eddy Cue
I'm a Duke guy. So we won't talk about the game then.
- [22:48]
Matt Bellany
That's.
- [22:48]
Interviewer (likely a journalist or host)
We will not talk about that game. Why did you not. I mean, you decided film and TV is interesting to you. Why not. Why not podcasts? Why didn't you want to own podcasts? You have such a platform there.
- [22:59]
Eddy Cue
Well, we love. We love what we're doing in podcasting.
- [23:02]
Interviewer (likely a journalist or host)
From a platform, but own like Spotify and Amazon did.
- [23:05]
Eddy Cue
But I think there's plenty of people doing great work in that area. And we didn't see a way for us to do something that was unique that the industry needed, honestly. And so you look. You guys are doing a tremendous job in the ringer. You look at companies like Wondery. I mean, there's a lot of companies doing great work. And so in this space, we thought there was a real Opportunity to do something different.
- [23:31]
Interviewer (likely a journalist or host)
What have you learned in sports so far? You said you did MLB to learn. What have you learned and what have you learned from mls?
- [23:38]
Eddy Cue
I'll tell you what we learned in MLB that I love. Quality of video. If you've ever watched the Friday night baseball game, the first time that we broadcast, everyone was like, oh, my God, what is this?
- [23:50]
Interviewer (likely a journalist or host)
8K?
- [23:51]
Eddy Cue
I don't understand. It looks better because it looks way better. And part of that is because we don't compress it as much. And so the quality is like. It's the first time you've ever seen sports at that level. When you look at the things that we've done from a graphics, from a stats point of view, we've tried to innovate in this space, and so we think there's a real opportunity to do a lot more innovation in sports. But in order to do that, you kind of have to have the complete sport. It's really hard to do something when you can't watch something or certain things are not there.
- [24:22]
Interviewer (likely a journalist or host)
The major sports are not giving you all their rights. It just doesn't benefit them.
- [24:25]
Eddy Cue
Yeah, and I get that. But then, you know, as a sports fan, it's very, very difficult. You know, it's not fun to be a sports fan right now when you have, you know, 12 different places, 12 different subscriptions to try to figure out where the game is.
- [24:39]
Interviewer (likely a journalist or host)
You guys have also not been as big of a player in the channels business. Amazon has a very successful channels business where others are there. You know, Netflix isn't even in the app Store. Does that bother you? Is the goal ultimately to try to compete, to be the gateway for all video, or is that ship?
- [24:57]
Eddy Cue
No, I think, look, we are in the channels business in a different way. All of our apps, all the apps except for Netflix, are integrated into the Apple TV app. So you get to see all the shows, you get to see everything on there. So we don't have to sell it directly to be in the business. We do. We have a channels business, and we do that as well. But we thought there was a real opportunity to bring everybody into the fold, not just the ones that we sell. And so I think from a customer point of view, it's way better. And so I look at most of my content through the Apple TV app and I get access to my HBO subscription. I get access to Peacock. I get access to all of that right in my interface.
- [25:36]
Interviewer (likely a journalist or host)
Okay. Content. When you guys came into town, you said, bring us your best projects. Regardless, it's pretty clear that The Apple brand can't expand to certain types of content. I don't think you guys would want a John Oliver show. I don't think you guys are into some of the harder R, you know, some racier content. Is that accurate?
- [26:00]
Eddy Cue
No. Look, I don't think we want to be in the news business, but I don't think the world wants a large company being in the news business. So it's not an area that we wanted to pursue. And so we were clear about that up front. I think when you look at content. Look, we said from the very beginning that we were not afraid of any content as far as whether it's R rated or not or adult content from the viewpoint of violence or things. If it's not the horror business, if it's not gratuitous, you're not in the horror business. We're not in the horror business, but that's a genre we decided not to pursue. But you look at shows. Disclaimer. You're gonna tell me that that's a pg? No, that is very much an adult thing. There was a rape scene on the morning show.
- [26:45]
Matt Bellany
There's been stuff.
- [26:46]
Eddy Cue
And so there were people that said, Apple will never, never do a show like that. And that's one of the things they said, but it was never true.
- [26:52]
Interviewer (likely a journalist or host)
I don't think you're doing that show again just because it was so expensive. It didn't have a huge audience. But I get what you're saying.
- [26:57]
Eddy Cue
No, we love that show. It was a great show.
- [26:59]
Interviewer (likely a journalist or host)
I want to talk a little bit briefly before we go about just some of the larger issues where you see the industry going. Do you believe that we're going to be consolidated to fewer studios in five years?
- [27:10]
Eddy Cue
It's always hard to tell. There's too many pieces to that. Right. Regulatory and all that standpoint. There are a lot of players out there, so it's not. Wouldn't surprise me if there's friendly with Larry Ellison.
- [27:22]
Interviewer (likely a journalist or host)
What does he want with Hollywood?
- [27:24]
Eddy Cue
I don't know. That's a good question for him.
- [27:26]
Interviewer (likely a journalist or host)
But I mean. But you are friendly with him. What do you think he wants?
- [27:29]
Eddy Cue
We're not, you know, look, he's. I know him. We're not that. That close from that standpoint. I look, I think the media business, if I look at it, we love, We. We love what we do. I guess, you know, he's looked at it and said there's a real opportunity. David, who runs Paramount now, we've worked with at Skydance. He's a great leader and So I think they look at the media business and say there's a real opportunity there for the future. And I agree with that.
- [27:55]
Interviewer (likely a journalist or host)
You do. So at some point, I mean, not today, but at some point, the leadership at Apple will change over. Do you think that Apple will still be committed to the entertainment business if Tim isn't in the chair and if, you know.
- [28:09]
Eddy Cue
Yes, yes.
- [28:12]
Interviewer (likely a journalist or host)
People shouldn't worry is what you're saying. You'll be in this business in five years.
- [28:15]
Eddy Cue
We're going to be in this business in 10 years.
- [28:17]
Interviewer (likely a journalist or host)
You think so?
- [28:18]
Eddy Cue
Absolutely. There's no question about it. I mean, people have doubts.
- [28:21]
Matt Bellany
I know, but they don't see the.
- [28:22]
Interviewer (likely a journalist or host)
Rationale, they don't see the roi. And that's what worries people. Other entertainment business, you get what they're doing. Amazon, it keeps people buying toilet paper. Netflix, they have a subscription business that's growing, growing, growing. The Apple business. It's a question as to what you guys are getting out of this again.
- [28:41]
Eddy Cue
Look, I get why it's been the same thing when we did things from Apple pay to. Any product we've ever entered is always the same. Why? It's like, oh, they're not really care. They do it to sell, Apple to buy. We look at these businesses when we enter them very carefully. We don't do very many of them, if you look at our history. And so when we do something, we're committed to it and we believe in it and we're going to pursue it. And so if you look at where we are today, we're six years, just about six years into this. You look at the quality of content that we're creating, the people that want to work with us and we want to work with them. I'm incredibly proud of the team that we have and what we've built. And I think it's going to last a lot longer than me.
- [29:24]
Interviewer (likely a journalist or host)
What about the criticism that Apple's just making dad shows that it has a particular demo of upper class, more male. A lot of these shows are white, that it's not a diversified offer.
- [29:36]
Eddy Cue
I think our look, we're doing things internationally. We have shows.
- [29:41]
Interviewer (likely a journalist or host)
What percentage of the subscribers are international?
- [29:43]
Eddy Cue
We don't talk about.
- [29:44]
Interviewer (likely a journalist or host)
Well, you can talk about it here. That's why you come on.
- [29:47]
Eddy Cue
Look, we like, there's some things that you don't need to know. Everything we do, we want people that.
- [29:52]
Interviewer (likely a journalist or host)
Make your shows would like to know who's watching them and where.
- [29:57]
Eddy Cue
And we tell them some things from that standpoint. Look, our devices are everywhere in the world. Number one, number two, we're on Android. Number three, we're on every TV set manufacturer. We're on every game, Xbox, PlayStation. We're on cable boxes from Xfinity to. So you can watch on any device anywhere in the world. So there are people watching everywhere. And it's growing. And so we're. We're very happy with that.
- [30:26]
Interviewer (likely a journalist or host)
Can you share the percentage growth year over year?
- [30:29]
Eddy Cue
No, we're not going to share numbers.
- [30:31]
Interviewer (likely a journalist or host)
Okay, all right, I'm not. I'm going to stop. What is the measure of success each year for, let's say, Zach and Jamie? What are their KPIs, other than growing the numbers? Do you put more credence in awards? Do you put more credence in reducing churn?
- [30:49]
Eddy Cue
Do you.
- [30:50]
Interviewer (likely a journalist or host)
What is, what is the success metric?
- [30:52]
Eddy Cue
Yes, yes, yes.
- [30:53]
Interviewer (likely a journalist or host)
No, no, no. But don't just say we make the best content. That's our goal. Everybody wants to make the best content.
- [30:58]
Eddy Cue
No, everybody says they want to make the best content. That's different than actually doing it.
- [31:03]
Interviewer (likely a journalist or host)
Okay?
- [31:03]
Eddy Cue
It's easy to say it, but it's different to do it.
- [31:06]
Matt Bellany
And actually, the best is a.
- [31:08]
Interviewer (likely a journalist or host)
Is a very malleable term.
- [31:10]
Matt Bellany
It is.
- [31:10]
Interviewer (likely a journalist or host)
Does that mean working with big stars? Because you guys clearly love stars. Does it mean the best creators?
- [31:16]
Matt Bellany
Does it mean the best reviews?
- [31:18]
Interviewer (likely a journalist or host)
Does it mean the best engagement?
- [31:19]
Eddy Cue
Look, I think when you look at them, all of those things matter to that standpoint. But let's start with the question you asked. So what are the KPIs and things that we look at? We look at the shows that we're creating, and we measure ourselves on a few things. One is we have our own benchmarks of the quality of the shows. And we look at that and say, like, did we deliver? Sometimes it doesn't quite work up to what you thought you had. These things are hard to do. They're not. Everybody looks at them. And when you see that one, that's great. Everybody's like, oh, it's so easy. But no, it's hard to create things that are awesome. The second thing we do is we look at what viewers and are we growing the viewers? Right. That people like the show. You can't just look in the mirror and say, well, I think this is great. If your viewers don't think it's great, then you can't say that. Of course. And so we look at. Those are the two primary, primary things that we look at. And so because those other things, whether it's subscriber numbers, churn, all the other ways that people Will measure. They're the benchmark. Those are the determining factor that determines that. What are the shows we're creating? Are they resonating with people? Driving that? And then you'll see the numbers of customers, and then everything else sort of fits itself. Look, awards, they're fun. Who doesn't like. They're great.
- [32:34]
Interviewer (likely a journalist or host)
And you go, tim goes. And he tweets about it.
- [32:37]
Matt Bellany
It's great.
- [32:38]
Interviewer (likely a journalist or host)
And a lot of people think that is a big reason why you're in this business, that it's fun.
- [32:42]
Eddy Cue
No, it's great to get an award because it's nice to get recognition. But when we go to the awards, the thing that we love is the people that actually created the shows.
- [32:52]
Matt Bellany
Yeah.
- [32:52]
Interviewer (likely a journalist or host)
You guys were at the Emmy party, mingling with Seth and Evan and all of that.
- [32:56]
Eddy Cue
Yeah. And it was incredible. When they walk in with their Emmys, it's theirs, it's not ours.
- [32:59]
Interviewer (likely a journalist or host)
I get it. But that gets to the fun part.
- [33:01]
Eddy Cue
And so it's great to, you know, it's great to be recognized for that. We help them achieve the goals that they have.
- [33:08]
Interviewer (likely a journalist or host)
But what did they help you achieve?
- [33:10]
Eddy Cue
They helped us achieve. Created what I think is one of the best studios in the world today.
- [33:14]
Interviewer (likely a journalist or host)
Okay. HBO would add a lot to that. Bolt it on.
- [33:20]
Eddy Cue
You know, I think that's true. You know, there's lots of things that would add. Disney's a wonderful company. HBO is a wonderful company. I.
- [33:27]
Matt Bellany
Both of them.
- [33:28]
Interviewer (likely a journalist or host)
But do you want to get a call when a kid gets eaten by an alligator? You do not.
- [33:32]
Eddy Cue
We like creating our own content. We like building things ourselves. We think we're really good at it. And I like where we are right now and where we're going.
- [33:41]
Interviewer (likely a journalist or host)
Okay. What about you personally? What's the movie you've watched the most?
- [33:45]
Eddy Cue
Well, I watched F1 a lot.
- [33:47]
Interviewer (likely a journalist or host)
No, no, but not this year.
- [33:49]
Eddy Cue
Oh, please.
- [33:50]
Interviewer (likely a journalist or host)
In your life?
- [33:50]
Eddy Cue
No, no. In my life. Godfather, An Affair to Remember. Cause I watched it when I was a kid a bunch of times that I used to like with Cary Grant, you know, comedies, Stripes. You know, I'm older, so there's a lot of old things.
- [34:06]
Interviewer (likely a journalist or host)
None of those available on Apple tv.
- [34:08]
Eddy Cue
No, that's right.
- [34:09]
Interviewer (likely a journalist or host)
They could be.
- [34:10]
Eddy Cue
They could be. But, you know, they're available elsewhere, and they're available on our platform, and they're available through Apple tv, the app, from that standpoint. But you know what? Our shows are not available anywhere else. They're only available through us. And so that's what we're building until.
- [34:24]
Interviewer (likely a journalist or host)
The shows that you don't Own come up for renewal and they decide to pull them back. And all of a sudden Ted Lasso is on hbo.
- [34:31]
Matt Bellany
Max.
- [34:31]
Eddy Cue
You know, look, we'll see. Stay tuned. You know, Ted Lasso's in production. I can't wait for the new season.
- [34:38]
Interviewer (likely a journalist or host)
Unless you buy hbo, then you get all those shows you own shrinking. You own all of them.
- [34:43]
Eddy Cue
Look, you can have what I would view as ownership of the show and the way that we have it, and we're quite happy with that.
- [34:49]
Interviewer (likely a journalist or host)
Okay, let's talk about the studio. You won a bunch of Emmys, set a record for a new comedy. What do you guys have left for season two?
- [34:59]
Eddy Cue
You know, this is a, you know, I call these kind of questions boomerangs because you asked me the question. It's really a question for you. Hey, you start on the show.
- [35:08]
Interviewer (likely a journalist or host)
Stop.
- [35:08]
Eddy Cue
So how are we going to make. How are we going to make it better? That's a great question. You know, are you going to.
- [35:13]
Interviewer (likely a journalist or host)
They have to go to space, obviously.
- [35:15]
Eddy Cue
Yeah. Are you going to do season two?
- [35:17]
Interviewer (likely a journalist or host)
I don't know.
- [35:18]
Craig Horlbeck
Sure.
- [35:18]
Interviewer (likely a journalist or host)
If they call. Our question is, would you do season.
- [35:21]
Matt Bellany
Two if they asked you?
- [35:23]
Eddy Cue
No. No. You know, your abilities, you and others are way better at doing that than I am.
- [35:29]
Interviewer (likely a journalist or host)
No, no, no, no. Behind the scenes, randos can do it.
- [35:31]
Matt Bellany
You can do it.
- [35:32]
Interviewer (likely a journalist or host)
And Apple is a character.
- [35:33]
Matt Bellany
Scorsese was said he should have sold his movie to Apple in the first place.
- [35:37]
Eddy Cue
Yeah, no, that was great. Look, it's a great show. We were thrilled for Seth and everybody, everybody involved with the show. For them to win 13 Emmys and, and be the most, most ever of a first year comedy, they deserved it so much. And I can't wait for season two because there's so many great stories. That's the best part about this show.
- [36:00]
Interviewer (likely a journalist or host)
It'll be interesting to see who gets on season two because it's sort of.
- [36:02]
Matt Bellany
A flex within the industry now. Everybody wants to be on it, so who they pick will be very fun.
- [36:08]
Eddy Cue
Yeah, no, that's. That's exactly right.
- [36:10]
Interviewer (likely a journalist or host)
Last question, then we'll wrap up. Is this fun? Is the Hollywood stuff fun for you?
- [36:15]
Eddy Cue
Yeah, look, I think the challenge of doing something like this and starting it from scratch is fun. It's hard, it's challenging. Not every day. It's fun. Building a team from scratch of the quality that Zach and Jamie have done and working with them, that's a ton of fun. When you get to work with great people, it's a great day.
- [36:41]
Interviewer (likely a journalist or host)
Brad Pitt's not bad.
- [36:42]
Eddy Cue
He's really good. Yeah.
- [36:44]
Interviewer (likely a journalist or host)
Have you Driven with him.
- [36:46]
Eddy Cue
I have not driven with him, but I've seen him drive. He's got the driving bug. Lewis told me he wasn't that great of a driver until he started learning, but now he's legit.
- [36:57]
Interviewer (likely a journalist or host)
Okay, there you go. Well, congrats. Thanks for doing this. Appreciate the time.
- [37:01]
Eddy Cue
I appreciate it. Thank you.
- [37:04]
Matt Bellany
We are back with the call sheet. Craig, before I get into a box.
- [37:07]
Interviewer (likely a journalist or host)
Office prediction, we are all about accountability.
- [37:09]
Matt Bellany
This is accountability corner. How did I do last week?
- [37:12]
Craig Horlbeck
It was a good week for you, Matt.
- [37:14]
Eddy Cue
We.
- [37:14]
Craig Horlbeck
We took the under on Tron Aries at $45 million.
- [37:18]
Interviewer (likely a journalist or host)
That was a layup.
- [37:19]
Craig Horlbeck
Never sweated out for a second.
- [37:20]
Interviewer (likely a journalist or host)
Too easy.
- [37:21]
Matt Bellany
It's like taking candy from a baby.
- [37:23]
Craig Horlbeck
Yes. It came in at, I think 33. So an easy win for you. Congrats.
- [37:29]
Matt Bellany
But didn't. I didn't and I didn't do Roofman. Roofman was tougher because the tracking was at like 10, 10 and it ended up coming in at 8. I actually saw Roofman last week and I liked it. I thought it was pretty fun. But it came in under the tracking. But I did not predict that one. So let's go on to this week. This week is a tougher one. I think The Black Phone 2 first one did 161 worldwide, including 90 domestic and open to 23.6 million in 2022. So this one, I don't know. This seems to be positioned as like the big Halloween horror movie. The tracking is at 25, which is a little bigger. The Blumhouse sequels don't always come in higher than the first one, obviously. Megan two the example of that one earlier this year. But I'm gonna take the over on 25. I think there's pent up demand, desire, Halloween season kind of market is there for this movie.
- [38:31]
Craig Horlbeck
I think I agree with you. Black Vote is one of those movies that came out in the real heyday of Blumhouse in the like 2021-2023 race.
- [38:39]
Interviewer (likely a journalist or host)
Back in the old days of 2022.
- [38:42]
Craig Horlbeck
It was when I feel like they couldn't miss. It was like Smile and Black Phone and all of these movies that would just crush, like they could do anything.
- [38:48]
Eddy Cue
And it was working.
- [38:49]
Craig Horlbeck
But I agree with you. I think I would take the slide over as well.
- [38:53]
Matt Bellany
So you think this is going to reverse the recent Blumhouse slide that he was lamenting on this show? Although he does own Atomic Monster now and they had the conjuring. So that is a gigantic hit.
- [39:04]
Craig Horlbeck
I think it'll come in right around Tracking. I don't think it will be a.
- [39:07]
Matt Bellany
Surprising right around is not good enough, Craig. You have to take an over or under.
- [39:11]
Craig Horlbeck
But what's interesting about being, you know, right by by a million dollars or wrong by a million dollars, to me.
- [39:17]
Matt Bellany
The more that's where winners are made. That's where the money is made. If you can come in right above, then you are golden.
- [39:24]
Craig Horlbeck
If you had to guess that this movie grosses 15 million or 40 million, which would you pick? Cause to me, that's more interesting.
- [39:31]
Matt Bellany
I guess I would guess 15. Just because these days it's easier to predict an underperformer than a massive over performer. But that's not what we're doing here. That's a different show. We're doing over or under. What say you?
- [39:46]
Craig Horlbeck
Fine, I'll say the slight. Slight under.
- [39:49]
Matt Bellany
Okay, sure. So Craig hates Jason Blum and all of his friends of the town. Craig just went against him.
- [39:56]
Craig Horlbeck
It's hard to bet against Ethan Hawke coming back as the grabber.
- [39:58]
Interviewer (likely a journalist or host)
I know the grabber. Yeah.
- [40:03]
Matt Bellany
Ethan Hawke made a lot of money on Blumhouse movies. He and Jason are friends. So good for him taking the over. We'll see how I do. All right, that's the show for today. I want to thank my guest, Eddie Q, producer Craig Horlbeck, our director Jesse Lopez, and I want to thank you. We'll see you one more time this week.