Are Oprah and Apple planning a subscription video service? Experts think so. On Friday, Apple signed a multi-year deal with Oprah Winfrey to create original programming. Though perhaps best known for her role as the host of Oprah Winfrey Show, media mogul Oprah is now the CEO of OWN (Oprah Winfrey Network) and a magazine publisher, producer, actress and philanthropist. Apple said the new shows will be released as part of its original content line-up, but it did not offer any specifics about the deal.

‘Together, Winfrey and Apple will create original programs that embrace her incomparable ability to connect with audiences around the world,’ said Apple in a June 15 news release.

Recode previously reported that Apple has made similar announcements with other Hollywood talent including Reese Witherspoon, Jennifer Aniston and Steven Spielberg. In a November article, Recode said the show with Witherspoon and Aniston would air in the spring of 2019, and Apple has committed to two seasons of the show.

Following Apple’s announcement, Recode’s Peter Kafka speculated about the company’s plans for Apple TV. Some believe the original content would be offered for free via the Apple TV app. Others have said that Apple may bundle its content with its other content including Apple Music on a subscription basis.

Most interesting and confusing to me: One TV executive who has talked to Apple tells me Apple says it intends to sell a standalone subscription to its original video shows, priced below Netflix, whose standard offering costs $11 a month in the U.S.,’ said Kafka.

According to Fox News, a spokesperson for OWN said Oprah has an exclusive, on-camera deal with the channel but she can appear elsewhere on a limited basis. The spokesperson also said that Winfrey’s original programming would be available online on the streaming service.

Though the dollar value of the Oprah-Apple deal has not been disclosed, last summer Apple reportedly budgeted $1 billion for original TV programs and movies over the course of the next year. To help plan that programming, Apple hired Sony Pictures executives Zack Van Amburg and Jamie Erlicht in June 2017. Van Amburg and Erlicht are known for The Blacklist, The Goldbergs and Breaking Bad, according to Variety.

Compare that $1 billion to Netflix’s 2018 content budget of $7.5 billion to $8 million, a sizable increase from its 2016 budget of $6 billion. The streaming giant is also increasing its marketing spending in 2018 from $1.3 billion to $2.0 billion.

‘We want great content, and we want the budget to make the hits we have really big, to drive our membership growth. We’ll grow our technology and development investment to roughly $1.3 billion in 2018,’ said Netflix in its January 22, 2018 letter to shareholders.

Netflix has experienced continued success with original shows like The Crown, Black Mirror, Stranger Things, Marvel’s The Punisher, Mindhunter and Bright, along with international hits like Club de Cuervos, The Day I Met El Chapo and Suburra.

‘We are increasingly self-producing our original content. As part of this initiative, in Q4 we signed overall deals with Stranger Things producer Shawn Levy and Orange is the New Black and GLOW creator Jenji Kohan. Our goal is to work directly with the best talent to bring amazing stories to our members all over the world,’ Netflix said.

Insider Take:

With a $1 billion budget, Apple is off to a good start, particularly signing top talent like Oprah Winfrey who seems to have the Midas touch. From our perspective, it seems unlikely that Apple would offer streaming content for free within its own app, but we can see Apple creating a Netflix-type streaming video on demand subscription service.

Such a service would help Apple get a better return on their financial investment, while creating recurring revenue to add to its other subscription revenue streams like Apple Music. Like other services, we expect Apple to stumble before they have fully fleshed out and fine-tuned their streaming/subscription offerings, but they have the resources and talent to go big. We’re eager to see what they’ll come up with!