Apple Rolls Back Its Big Plans To Release Movies In Theaters

Apple is rethinking its movie strategy after the disappointing box office performance of several big-budget films, including Martin Scorsese’s Killers of the Flower Moon, Napoleon, Argylle and Fly Me to the Moon. Apple canceled plans to release Wolfs—an action comedy starring George Clooney and Brad Pitt—in thousands of theaters globally. Instead, the picture made its debut in a limited number of venues before it became available on the Apple TV+ streaming service on Sept. 27. Apple plans to use a similar approach with the next few titles on its calendar, including the World War II drama Blitz. Apple, which previously had intended to spend about $1 billion annually on blockbusters for cinemas, won’t return to the big screen with a wide, global theatrical release until June with F1—a film starring Pitt as a former Formula One driver who returns to racing to mentor a rising star.

The shift in film strategy is part of a larger reset at Apple’s Hollywood studio, which is led by Zack Van Amburg and Jamie Erlicht. Their bosses in Cupertino are seeking to rein in costs, as Bloomberg reported in July. After spending upwards of $100 million—and in some cases more than $200 million—on several of the aforementioned films, Apple will now focus on making about a dozen movies a year, most of them produced for less than $100 million, according to people familiar with the company’s plans who requested anonymity because they were not authorized to speak about an internal matter. That means Apple’s commitment to spend $1 billion annually on films won’t change, but the makeup of the company’s movie slate and release strategies will, the people said. Apple will still aim to take one or two big theatrical swings a year with films exceptionally approved for higher budgets, such as F1. But films like Wolfs, for which Clooney and Pitt earned a combined sum of tens of millions of dollars, will be marketed as streaming rather than theatrical titles.A representative for Apple declined to comment.

Apple is pulling back from theaters at the same time Netflix Inc. and Amazon.com Inc. are reworking their movie strategies. Earlier this year, Netflix hired producer Dan Lin to oversee its film studio, which had spent billions of dollars a year to produce more films than any other company in Hollywood. Yet Netflix struggled to control the quality and cost of its slate, which in some years approached 50 movies. For every hit, such as Bird Box, there were several misses. Lin’s predecessor Scott Stuber also clashed with management over its strategy for movie theaters. Stuber wanted to release movies such as Scorsese’s The Irishman and the Knives Out sequel Glass Onion widely in cinemas, but he couldn’t persuade Netflix co-Chief Executive Officer Ted Sarandos. Lin aims to make fewer movies and develop more projects in-house to keep costs down. He has considered scrapping several of the more expensive projects in development at Netflix.

Amazon hired former Warner Bros. executive Courtenay Valenti last year to lead its film division. The company aims to make about 25 pictures a year, 15 of which will receive a theatrical release and 10 of which will go straight to its Prime Video streaming service, according to people familiar with the matter. But Amazon has yet to release anything close to that number of titles, and hasn’t released a single blockbuster hit. Like both Netflix and Apple, it has had more success creating cultural hits with TV series including The Boys and Fallout.

Hollywood agents and producers have trouble understanding the technology companies’ strategy. Some question whether they’re putting movies in theaters to make money or as marketing for when the movies go to streaming. Either way, industry veterans say they need to spend a lot more promoting the titles. Agents have also pushed Apple and Amazon to hire more movie executives to balance out the control former TV execs hold at the companies. Apple’s film studio is run by Matt Dentler, who was previously a programmer at the South by Southwest Film Festival. He reports to Van Amburg and Erlicht, both of whom have spent their careers working in TV. Valenti reports to Amazon MGM Studios head Jennifer Salke, whose career before joining Amazon was also in TV. (Lin reports to Netflix Chief Content Officer Bela Bajaria, also a lifelong TV executive.)

Netflix’s reticence to collaborate with cinemas, combined with Apple’s theatrical retrenchment, is a blow to theater operators who’d been banking on Hollywood’s tech insurgents to bolster their struggling chains. The film business is still trying to recover from the impact of the coronavirus pandemic and two Hollywood labor stoppages. The billion-dollar box office successes of Inside Out 2 and Deadpool & Wolverine this summer have shown that the theatrical model can still thrive, yet both ticket sales and the number of releases lag the pre-pandemic norm, with revenue in the US and Canada about a third lower than it was in 2019.

Any pullback from theatrical releases is also a blow to the traditional studios that were earning fees for helping distribute Apple’s movies in theaters: Sony Pictures Entertainment, which distributed Napoleon and Fly Me to the Moon, was also due to release Wolfs.  

Although the future of Apple’s movie strategy remains unclear, executives at the company say that much hinges on the performance of F1. The tech giant is partnering with Warner Bros. to distribute the film, which has a reported budget of more than $300 million. That figure would make it Apple’s most expensive movie to date—and perhaps require up to twice as much in ticket sales to break even before it’s released on the company’s streaming service, using the rule of thumb for typical theatrical releases. In a July interview with Deadline, producer Jerry Bruckheimer and director Joseph Kosinski, who’d earlier teamed on the 2022 blockbuster Top Gun: Maverick, declined to say how much the film cost to make but suggested that the sum was tens of millions lower and benefited from tax rebates and sponsorship deals. In theory, that should lower the threshold for F1 to supply Apple with a rare return on investment at the box office.

"We can’t give you a number because that’s Apple money and they can talk about it," Bruckheimer said of F1’s budget at the time.

A representative for Apple declined to comment. One thing seems certain, however: Big tech companies have spent billions building up Hollywood studios and shifting the business of TV online, but even they are still trying to figure out the movie business.