Apple has made a splash in the world of movie theaters by spending a whopping $200 million on producing large-scale films like historical epics, war dramas, and action comedies. While other studios are tightening their budgets due to the contracting global box office, Apple seems unfazed. But can they continue to spend big on movies that fail to perform at the box office?
Box-Office Misfires
Apple’s latest release, Matthew Vaughn’s spy thriller “Argylle,” debuted to disappointing numbers, earning only $18 million domestically and a disastrous $35 million globally. With its oversized budget, the film is unlikely to turn a profit during its theatrical run. In fact, a traditional studio would need at least $500 million globally to break even on a movie of this size. Unfortunately, “Argylle” has been burdened with negative reviews and discouraging audience scores, making it the year’s first flop.
The Challenge of Massive Spends
According to Jeff Bock, an analyst with Exhibitor Relations, no studio can sustain massive spends when the box office results are underwhelming. The poor performance of “Argylle” has already negatively impacted its earning potential on streaming platforms. Additionally, Apple faced the challenge of recouping its investment for its first major releases, Martin Scorsese’s “Killers of the Flower Moon” and Ridley Scott’s “Napoleon.” While these movies fell just short of their $200 million price tags, they sold a decent number of tickets considering their adult-skewing, prestige drama nature.
Apple’s Future Film Projects
Despite these setbacks, Apple’s upcoming films will not be getting any less expensive. The company has several projects in the pipeline, including a 1960s-set space race comedy starring Scarlett Johansson and Channing Tatum, a psychological thriller called “Wolfs” with George Clooney and Brad Pitt, and a Formula One feature with Brad Pitt. The cost of these films ranges from $100 million to $200 million.
Apple’s Film Strategy
Apple remains tight-lipped about its film strategy, which seems to prioritize prominence over profits. These theatrical releases can be seen as advertising expenses, as they help generate awards chatter and buzz for Apple TV+. However, there is a risk of associating Apple with flops, which may deter talent from wanting to work with the tech giant. Moreover, popcorn movies like “Argylle,” which are not likely to receive Oscar attention, pose an additional challenge for Apple.
Apple’s Financial Flexibility
Being new to the theatrical business, Apple has released only three major movies to date. Despite the setbacks, some analysts believe that Apple’s massive market cap provides the company with the financial flexibility to keep experimenting until they find the winning model. However, as a publicly traded company, Apple must justify how it allocates its capital and keep shareholders satisfied.
In conclusion, while Apple’s spending on box-office bombs raises eyebrows, the company’s deep pockets and commitment to the entertainment industry allow them to weather the storm. As Apple continues to invest in the film world, only time will tell if their strategy proves successful.
Source: F5 Magazine