Why Apple is making original TV shows

David Paul Morris | Bloomberg | Getty Images

Tim Cook, chief executive officer of Apple

Apple CEO Tim Cook explained why the company is making a big push into original TV programming on Tuesday’s earnings call.

“The cord cutting in our view is only going to accelerate and probably accelerate at a much faster rate than is widely thought,” Cook said in a call with analysts on Tuesday.

Apple noticed its Apple TV units and revenue grew by “very strong double digits” during this past quarter, Cook said. It also saw more third-party providers use Apple TV as its go-to-market device for their services, at a rate of around 100 percent year-over-year according to Cook. For example, AT&T’s DirecTV Now streaming service offers customers an Apple TV to stream content.

The comments were made during Apple’s third-quarter earnings report. The company reported earnings per share of $2.34 and $53.3 billion in revenue.

Last August, Apple said it wanted to spend about $1 billion acquiring 10 TV shows. Since then, it signed deals with Oprah Winfrey, Steven Spielberg’s Amblin Television, and Sesame Workshop, among others. It also hired Jay Hunt in October, a broadcasting executive best know for bringing “The Great British Bake Off” and “Black Mirror” to BBC’s Channel 4.

“We hired two highly-respected television executives last year and they have been here now for several months and have been working on a project that we’re not really ready to share all the details of it yet, but I couldn’t be more excited about what’s going on there,” Cook said, potentially hinting at a rumored subscription content bundle. “And we’ve got great talent in the area that we’ve sourced from different places and feel really good about what we will eventually offer.”

However, Apple’s budget is small compared to competitors like Netflix. The streaming giant is expecting to spend up to $8 billion this year on content. Amazon is spending around $4.5 billion, according to estimates.