Acceleration of Netflix Exodus: The Apple x North Road Exclusive Deal Reflects the Next Chapter of the Film Industry

Apple's "Five-Year Defection Deal" with North Road—Shockwaves in the Film and Streaming Arena

1. Introduction

On June 24, 2022, starting with a report from Bloomberg, it was revealed that Apple has entered into an exclusive film production partnership with the U.S. content studio "North Road." North Road, led by Peter Chernin, had been in a five-year partnership with Netflix but has now shifted its exclusive relationship to Apple. This agreement, which industry insiders call a "historic transfer symbolizing a departure from Netflix," holds the potential to dramatically reshape Apple TV+'s long-term strategy.marketchameleon.comtimesofindia.indiatimes.com

2. Contract Details

• First-Look Deal
  Apple has acquired the first-look rights for feature films planned by North Road. This allows Apple Original Films to take the lead from the early stages, even before scripts and casts are finalized.timesofindia.indiatimes.com

• Handling of Existing Projects
  North Road will complete two ongoing projects for Netflix, 'Apex' (starring Charlize Theron) and '11817' (Wagner Moura/Greta Lee), as "exceptions," but new projects will generally be distributed by Apple, either through its streaming platform or theatrical releases.timesofindia.indiatimes.com

3. Behind the Negotiations

Peter Chernin commented to Bloomberg, "We have achieved success with Apple through TV series 'See' and 'Truth Be Told,' and we trust their creative support." Anticipating the end of the Netflix contract, Chernin became a free agent, with multiple companies vying for a deal, but Apple's "theater + streaming" hybrid strategy was the deciding factor.marketchameleon.com

4. Social Media Reactions—"Apple is Buying Too Much" "Is This the Revival of Theaters?"

Overall

• Investors: Positive as a stock price booster.

• Creators: Expectation that the scale of releases can be anticipated more than with Netflix, potentially raising the "status" of works.

• Viewers: Concerns persist about the "difficulty of finding" Apple TV+ works.

5. Deciphering Apple's Video Strategy

5-1. "Dual Strategy of Theaters and Streaming"

Since around 2023, Apple has shifted to a dual model targeting box office revenue with major works like 'Killers of the Flower Moon' and 'F1' (scheduled for release in June 2025). The North Road contract aims to secure a base for mass-producing this scheme, targeting 4-6 films annually.

5-2. Scale of Content Investment

Apple's content investment is estimated at $20 billion for fiscal year 2024. In light of this contract, there are reports from North American production sites that "Apple will increase its annual budget by an additional 20%." This is against the backdrop ofstagnant hardware sales → necessity to raise ARPU in the services sectoras a management challenge.gurufocus.com

6. Ripple Effects on Netflix

• Risk of Creator Exodus
  Due to Netflix's reduction in film production from 2021 to 2024, some major producers have moved to other companies. North Road is considered one of the largest, making this departure symbolic.

• Competitive Seat-Grabbing Game
  Amazon MGM and Paramount+ have also announced expansions of their film lines. North Road's choice of Apple makes it a winner in the "seller's market."

7. Industry Analysts' Perspectives

• Strategic Fit
  "Expanding an already proven relationship in the TV sector to films is logical" (Omdia analyst)

• Stock Price Impact
  Some see it as supporting evidence for the average analyst target stock price of $231 (15% above the closing price of $199 on June 24) compiled by GuruFocus.gurufocus.com

8. Expectations for the Creative Aspect

North Road's strength lies in its "realistic and robust approach not relying on IP," as seen in 'Ford vs Ferrari' and 'Planet of the Apes: New Generation.' Apple has already completed 'Chief of War' (starring Jason Momoa), scheduled for release in August, which will serve as a litmus test for the new system.marketchameleon.com

9. Changes in Viewer Experience

Apple One bundle subscribers number around 300 million globally. Where the "window" is set after theatrical releases will influence future UX. Both investors and audiences expect "theatrical release → streaming within 45 days," but Deadline reports that Apple might test a 90-day rule with 'F1.'twitter.com

10. Conclusion and Outlook

• Apple TV+ has emphasized "quality over quantity," but with North Road joining, the annual supply volume is expected to increase quantitatively as well

• Netflix, while hedging with remaining projects like the horror series 'Fear Street,' cannot avoid another reorganization of its live-action line

• For Hollywood as a whole, "multi-homing" is accelerating, and exclusive studio-level partnerships may become the norm again
  
  

The first production by Chernin under the new deal is expected to be announced in the latter half of 2025. Apple's next target is believed to be "maximizing box office revenue through international co-productions," likely intensifying the "IP acquisition battle" involving rivals.