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By Joe Flint and Tripp Mickle 

Apple Inc. has formed a production partnership with Oprah Winfrey to make programs for its planned subscription-video service, part of the company's aggressive push into the content business as competition for Hollywood talent escalates.

Apple has joined an arms race for top producers and actors by tech giants and traditional media companies alike. All parties are trying to recruit the most valuable talent they can to help programming stand out in a fragmented TV landscape where consumers' choices are growing.

Neither Apple nor Ms. Winfrey offered any specifics about the content she would make. In a statement Friday, Apple said Ms. Winfrey would "create original programs that embrace her incomparable ability to connect with audiences around the world."

Apple wasn't the only suitor for Ms. Winfrey. Last year Amazon.com Inc. also had talks with her about making content for its Amazon Prime service, a person familiar with the matter said.

Although Apple has very deep pockets, a commitment it made to spend $1 billion on content pales in comparison to the $8 billion that streaming giant Netflix Inc. is expected to spend this year. Among other players, Hulu is expected to approach $3 billion for programming this year, an amount that HBO also is likely to approximate.

Netflix, in particular, has signed up an array of star producers, including "Scandal" creator Shonda Rhimes and "American Horror Story" producer Ryan Murphy, luring them away from traditional studios.

The old media companies have vowed to fight back. Last week, Time Warner Inc,'s Warner Bros. announced a $300 million deal to keep prolific TV producer Greg Berlanti from jumping ship.

AT&T Inc. now owns HBO and Warner Bros., after closing its acquisition of Time Warner on Thursday. "I have no trepidation about making sure we maintain those relationships with the very top talent going forward," John Stankey, the AT&T executive charged with overseeing Time Warner assets, said in an interview Friday.

Apple doesn't have a launch date for its planned direct-to-consumer video service, but people familiar with the company's plans say it is expected to debut next year.

Ms. Winfrey is the latest big fish Apple has landed. In recent months, it has struck deals with actor and producer Reese Witherspoon, comedy star Kristen Wiig and directors J.J. Abrams and M. Night Shyamalan.

Though Apple hasn't outlined its distribution plans for the programming or said what it may charge, the company is expected to create a subscription offering that bundles access to the programming with iCloud storage and potentially other services like magazine subscriptions, people familiar with the plans said.

The video push comes as the company faces a slowdown in sales of iPhones, which account for two-thirds of total revenue. It is leaning on its services business -- which includes App Store sales, mobile payments and its music-subscription business -- for growth. Apple has set a goal of generating about $50 billion in sales from services in 2020, up from $29 billion in sales in its latest fiscal year.The video-subscription service would contribute to that growth.

"Apple needs an underlying growth driver" and "outside of increasing prices for the iPhone, it's difficult to decipher where growth for Apple comes from unless services can deliver," said Mike Olson, an analyst with Piper Jaffray.

The Oprah partnership comes a year after Apple poached two top Hollywood executives from Sony Corp. to spearhead the video effort: Jamie Erlicht and Zack Van Amburg, who oversaw Sony Pictures Television productions such as "Breaking Bad" and "The Crown."

Their approach is a departure from Apple's initial programming efforts, which began in 2017 and resulted in shows like "Planet of the Apps" and "Carpool Karaoke."

Apple Senior Vice President Eddy Cue, who oversees services, recently reorganized his team and gave former Time Warner Cable executive Peter Stern responsibility for overseeing business operations for services, people familiar with the change said. Mr. Stern is expected to work with Messrs. Erlicht and Van Amburg on crafting subscription plans for the Hollywood content and Apple's other offerings, the people said.

Since retiring from hosting her daytime talk show in 2011, Ms. Winfrey has increasingly focused her efforts on content production while keeping herself in front the camera as an occasional interviewer. She co-founded the Oprah Winfrey Network with Discovery Inc. in 2011. Last year, she reduced her holdings in OWN to 25.5% from 50% but is still heavily involved in the network.

Ms. Winfrey's relationship with OWN won't change as a result of this deal, a Discovery executive said. Her agreement with the network and Discovery runs through 2025. After initially struggling to find traction, OWN in recent years has turned itself around and launched several successful scripted shows including "Queen Sugar" and "Greenleaf."

Ms. Winfrey has also been a contributor to the CBS news magazine "60 Minutes," and her Harpo Productions makes the popular daytime shows "Dr. Phil" and "Rachel Ray." Her film company made the theatrical release "Selma."

--Ben Fritz contributed to this article.

Write to Joe Flint at joe.flint@wsj.com and Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

June 15, 2018 19:15 ET (23:15 GMT)

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