Should Apple buy Disney? Plus: Apple's $1B blockbuster bet and more with Lon Harris | E1831

Episode Summary

Executive Summary: Jason Calacanis and Lon Harris discuss Apple’s quality-focused streaming strategy, the value of theatrical releases as marketing, escalating production costs, and audience fatigue with franchise sequels. They argue that distinctive filmmaker-led projects can still become major hits, while studios should control budgets and create event-worthy releases. They also examine AI’s limits in creative work, labor negotiations over streaming residuals, and share film and television recommendations.

Main Topics: Apple’s approach to entertainment and possible Disney ownership: The hosts praise Apple TV+ for releasing less content than rivals but maintaining a higher perceived quality level. They attribute this to a long-term, hands-on, product-oriented approach. They caution that acquiring Disney could reduce competition and lead to layoffs or canceled projects, as seen in other media consolidations. Theatrical releases, streaming, and audience discovery: They argue that a theatrical window can build awareness and increase later streaming interest rather than undermine it. They cite licensed HBO programs and Suits as examples of shows gaining renewed attention when made available on additional services. Apple’s theatrical-first strategy for films is contrasted with Netflix’s preference for streaming exclusivity. Rising budgets and the case for original, filmmaker-led projects: The hosts criticize ballooning production budgets, including reports that Secret Invasion cost more than $200 million. They point to Barbie and Oppenheimer as evidence that original or freshly reimagined projects can succeed, and argue studios should back distinctive filmmakers and market films as social events instead of relying on endless sequels. AI, creative work, and the writers’ strike agreement: They discuss the WGA agreement’s treatment of AI, including the principle that AI cannot receive writing credit or originate material adapted by a writer, while questions about training systems on writers’ work remain unresolved. Lon argues AI is better suited to technical and data-heavy tasks than generating genuinely original creative ideas. Actors’ negotiations and streaming compensation: The discussion focuses on SAG-AFTRA’s efforts to secure residuals or profit sharing tied to streaming success. Lon argues that meaningful participation could reward performers, encourage stronger commitment to projects, and make entertainment careers more viable; negotiations stalled after the studios rejected proposals based on revenue or subscriber counts. Recommendations and the value of distinctive storytelling: The hosts recommend television and films including The Fall of the House of Usher, The Diplomat, Mr. Inbetween, Past Lives, Aftersun, The Burial, and The Caine Mutiny Court-Martial. Their recommendations reinforce their preference for strong authorship, thoughtful dramas, and work that rewards focused viewing.

Key Arguments: Apple can afford to prioritize prestige content and long-term brand value because its business is far larger than the global film industry; streaming content may help strengthen its broader ecosystem even if individual projects are not highly profitable. Making a film available across theaters and streaming platforms can expand discovery and generate renewed interest. The hosts cite the streaming resurgence of older shows such as Ballers, Insecure, and Suits as evidence against strict platform exclusivity. Studios should respond to audience fatigue by investing in compelling projects from notable filmmakers, controlling budgets, and making releases feel like social events—not by simply producing more sequels or rushing toy-based IP adaptations. Theater-first releases can support streaming launches by creating cultural conversation. Apple’s plan to release films theatrically and later offer them on Apple TV+ is presented as a way to benefit from both experiences. AI can assist with coding, research, or other structured tasks, but the speakers doubt it can reliably create original, meaningful stories because it recombines patterns without human experience or judgment about what makes an idea compelling. Streaming residuals could improve incentives and help sustain long-term writing and acting careers. Lon argues that sharing success with creative workers can encourage investment in their craft and help retain talent. Media consolidation can reduce creative diversity and employment: the hosts point to layoffs and shelved projects following Warner Bros. Discovery’s merger as a warning about a potential Apple-Disney combination.

Data Points: Reported Secret Invasion production cost: Over $200 million - The opening discussion uses the Marvel series as an example of a costly production that, in the hosts’ view, did not look commensurately good. Apple revenue in 2022: $394 billion - Jason compares Apple’s reported annual revenue with the global film industry to illustrate the company’s ability to fund content for strategic reasons. Apple profit in 2022: About $100 billion - The figure is cited alongside Apple’s revenue as evidence that entertainment spending could be a small part of its overall business. Global film industry revenue: $77 billion - Jason gives this estimate for the entire global film industry and compares it with Apple’s 2022 revenue. Foundation season-one budget: $60 million - Lon contrasts this with an Amazon production budget he describes as over $120 million, arguing Apple took a comparatively measured approach. Wolf of Wall Street budget: $100 million in 2013; about $130 million in today’s dollars - Used as a historical comparison for the cost of Martin Scorsese’s later films. The Irishman budget: $159 million - The hosts cite its digital de-aging work as a contributor to the film’s high cost. Killers of the Flower Moon estimated budget: About $250 million - Jason gives this as an estimate during a discussion of prestige-film spending; it is presented conversationally rather than as a confirmed figure. Barbie budget and box office: $140 million budget; $1.4 billion gross - The film is cited as a high-performing project based on familiar IP but not a sequel to an existing movie franchise. Oppenheimer budget: $100 million - The hosts contrast the budget with the film’s strong theatrical performance and its status as a historical drama. Actors’ proposed streaming revenue share: 2% - Lon says SAG-AFTRA proposed a share of platform revenue, which studios said would equal about $2.4 billion over a three-year contract. Studios’ estimate of the 2% proposal: $2.4 billion over three years, or $800 million per year - Presented as the studios’ calculation of the cost of SAG-AFTRA’s revenue-sharing proposal. Netflix subscriber-based proposal: No percentage or total stated - After the revenue proposal was rejected, SAG-AFTRA suggested linking payments to subscriber counts; the studios reportedly objected that the idea was raised too late.

Pivotal Quotes: "All of these budgets need to come down." — Jason Calacanis: Jason’s central response to escalating film and television production costs, especially high-budget projects whose quality or commercial return may not justify the expense. "The more places something is available, the more heat and buzz it can build up." — Lon Harris: Lon’s argument that broader availability and theatrical exposure can increase discovery and later streaming viewership rather than diminish it. "The right lesson would be: you got to find interesting projects from notable filmmakers, put a lot of marketing muscle behind them, and come up with creative ways to make people feel like this is something I got to see opening weekend with my friends." — Lon Harris: Lon’s proposed alternative to sequel dependence: support distinctive creative work and make releases feel like shared cultural events.

Implications: Studios may need to pair tighter budgets with distinctive projects and event-focused marketing. Theatrical and streaming distribution can reinforce each other, while fairer success-based compensation could help retain creative talent. AI is more likely to augment structured work than replace human authorship.