EXCLUSIVE: Produced by an “outie” studio for its first two seasons, Apple TV‘s flagship drama series Severance will now be made by an “innie” one. In a deal finalized late last year, Apple has acquired Severance — the IP and all rights — from Fifth Season, Deadline has learned.
Under the pact, which sources peg at just under $70 million, Apple’s in-house Apple Studios will be the studio on the Emmy-winning series going forward, with indie Fifth Season becoming an executive producer. The transaction is similar to the handover between AMC Studios and Apple Studios of another elaborate, high-concept drama, Silo, after Season 1.
Severance, a high-end drama said to cost as much as $20M an episode for its 10-episode second season, will become a marquee title in the Apple Studios portfolio, joining popular series such as Your Friends and Neighbors, Stick, Sugar and Palm Royale and movies such as last year’s tentpole F1.
Like Netflix did 15 years ago with its first crop of original series such as House of Cards and Orange Is the New Black, Apple TV started off by leasing series from outside studios as it needed to scale up quickly after its 2019 launch. That remains part of the streamer’s strategy, with some of Apple’s biggest hits, including Ted Lasso and recent entries The Studio and Pluribus, coming from outside studios.
But from Day 1, Heads of Worldwide Video Zack Van Amburg and Jamie Erlicht, who previously led Sony Pictures Television Studios, also set out to build an in-house studio. More than six years later, Apple Studios produces about half of Apple TV’s slate.
‘Severance’s Transition
Season 2 of Severance became Apple’s most watched series at the time and was the most nominated program at the 2025 Emmys with 27, winning eight awards. That was a great result but getting there wasn’t a walk in the park.
With its intricate storytelling, massive sets and extensive VFX, Severance is complicated and difficult to produce. Spearheading the series, created/executive produced and showrun by Dan Erickson, is executive producer/director Ben Stiller, known for bringing a feature mentality to the series process and being exacting on every detail, which is not easy to manage.
For the first two seasons, Fifth Season had been shouldering costs while looking to scale their business under new owner CJ ENM, juggling multiple big-budget productions including the Jason Momoa epic Chief of War, also for Apple TV.
Spending escalated in Season 2, which started production in October 2022 and wrapped in April 2024. It racked up budget overages brought upon by months of Covid protocols, which were phased out in May 2023; an eight-and-a-half month shutdown due to the Hollywood strikes; as well as reported writers room friction and a slew of script changes that resulted in scrapped pre-built locations and reshoots.
Severance films in New York where it gets tax credits, though there have been payment delays. While costs were going up and Season 2 was taking longer, borrowing became more expensive, with rates climbing from 1% to 5.5%-6%, making it harder to carry the cost for up to 36 months — the gap between Seasons 1 and 2 — especially when tax rebates are not coming in quickly enough.
According to sources, the circumstances put a financial burden on Fifth Season, which asked Apple TV for advances and help with payments and mulled moving the show from New York to Canada for bigger and quicker tax rebates. (Regardless of potential hardship, the indie continued to fulfill its studio obligations and was prepared to continue to do so.)
Apple TV already had been performing duties that go beyond a licensee, including bringing partner deals with 3-4 outside advertisers for Season 2 — most notably a State Farm commercial — for which they had to ask Fifth Season’s permission as the studio.
Assessing the situation coming off the challenging second season, Apple TV brass felt that, from a financial standpoint, if the streamer owned the show, they could bear the burden better. That includes being able to wait for the tax rebates to come and not feel pressure to move Severance to Canada — not necessarily the right thing for the show — in pursuit of a faster flow of tax credit cash versus keeping it in New York where the series has an established footprint.
Additionally, Apple has a deal with Stiller’s Red Hour Films, whose team includes fellow Severance exec producers John Lesher, who joined during Season 2 and helped navigate production, and Jackie Cohn, who originally brought Severance to the company. Having Red Hour in the fold as Apple Studios produces Severance makes it easier to navigate Stiller’s availability and keep him invested. (Under his pact, Stiller is currently filming Apple’s upcoming series The Off Weeks.)
Taking a longer-term view, which is that Severance will run for at least four seasons, Apple TV brass concluded they would be able to make better decisions about the health of the show — including potentially expanding the franchise — and approached Fifth Season about a buyout, I hear.
For Fifth Season, this represents an anomaly but, receiving a proverbial financial offer they couldn’t refuse while looking to support a their longtime platform partner and their show, they took it.
Fifth Season is among the top outside studio suppliers of Apple TV alongside Warner Bros Television and Sony Pictures Television. In addition to Severance and Chief of War, it has produced several other series for Apple including See, Truth Be Told, Roar, Lady In the Lake and the delayed upcoming drama The Savant.
Seasons 3, 4 (& 5?), Spinoffs & Lessons From Season 2
As of now, Severance has been renewed for Season 3. A fourth season is a lock and factored into Apple Studios’ plans for the show. Stiller and Erickson have spoken publicly about envisioning the series to run for 3-4 seasons; I hear four seasons is the target, and Apple is fully on board.
Could there be a fifth? The decision will be Stiller and Erickson’s, and according to sources, at the moment, they don’t think there is. Whether that changes or not, I hear the duo are open to the idea of doing more with the Severance universe; possibilities include a prequel, spinoffs and foreign versions.
It is both a creative and a business proposition. Facing three-year gaps between Severance seasons, there could be a way to keep the show’s fandom engaged by releasing a smaller-scale offshoot in-between that also would increase the franchise’s value. Van Amburg and Erlicht took a similar approach at Sony with prequel Better Call Saul following Breaking Bad.
At the moment, the focus is on Season 3. While some things are hard to control – Severance being a complex, cinematic series from a creator, Erickson, who is not a traditional TV showrunner, and a perfectionist creative in charge, Stiller, juggling multiple projects – there is a concerted effort to avoid some of the issues that plagued the second season in the upcoming installment, which I hear Apple hopes to start shooting in the summer.
That timing is tentative, and the targeted filming start will likely have to be pushed another couple of weeks as scripts are still being written. I hear six scripts for Season 3 have been finished, with episode 7 in an outline stage and a couple more to go. (Season 1 consisted of nine episodes, Season 2 had 10.)
Because of the series’ dense mythology, its writing process is complicated, and a plot development in episode 8, for instance, could require a change in episode 2 where something no longer would make sense. The goal is to do that in script form — where such tweaks are relatively cost-free — more than in production and to not start filming while still waiting for 3-4 scripts, as such adjustments in already completed episodes could lead to expensive shutdowns and reshoots.
Some of this happened in Season 2, so I hear Stiller and Apple plan to head to production on Season 3 with all scripts final, even if the start of filming has to be delayed a bit. When shooting starts, it will be with a new producing director, Zi filmmaker Kogonada, who previously served in the same capacity on Apple TV’s Pachinko.
‘Severance’s Value & Profitability
Fifth Season reportedly lost money on Severance in the first two seasons, especially in Season 2. According to sources, the company indeed would’ve been in the red had Severance been canceled after two seasons. Since the series is continuing, Fifth Season is expected to turn a profit from collecting producing fees going forward (along with selling the rights to Apple).
As Apple is taking over Severance as a studio, it would be examining more closely the series’ viewership vs. current cost structure. The three-year gap between seasons is likely a source of anxiety at this price point with questions whether audiences would come back. They did for Season 2, whose viewership was twice as big as that for Season 1.
It is hard to predict if the trajectory would continue with another 100% audience growth. Even if viewership goes up just a little bit in Season 3, as long as Apple manages to keep costs where they are — something on which the studio is working — the series would be a good, profitable bet, I hear.
Apple TV executives tend not to use the word profit when referring to their shows’ performance. That’s for a reason because there are a lot of murky variables. There is viewership as a metric, but would subscribers still have watched if offered a different show that costs half as much, making for a better margin? It’s also hard to directly tie profitability to getting a new subscriber to sign up for a show, and it is virtually impossible to know whether a new series would have prevented a subscriber from canceling the service.
Then there is the even more elusive brand value. As a platform, Apple TV is defined by global hits like Ted Lasso and Severance. In recognition of Severance‘s importance to the company, Apple CEO Tim Cook himself did a promo for Season 2.
Leasing Vs. Owning & Apple’s Talent Payment Model
As the share of Apple Studios-produced series on Apple TV grows, the streamer plans to remain in the licensing business for original series — just likely being pickier with outside pitches — making sure top talent continue to bring their projects to Apple and come back for more, like Warner Bros TV-based Bill Lawrence who has three series on the platform in Ted Lasso, Shrinking and Bad Monkey.
Apple TV’s three Best Comedy Series Emmy Awards to date are for outside series, Ted Lasso, which won twice, and The Studio; its Best Picture Academy Award was for an acquisition, CODA. (Apple is the only streaming-first platform to have won multiple Best Drama or Comedy Series Emmys and the only streamer with a Best Picture Oscar.)
Owning a show provides flexibility for streamers like Apple that are in control of all negotiations including stages, actor hold dates and bringing in new guest cast, with everything happening at their pace rather than relying on outside studios, making it easier to do that for a percentage — but not all — of the slate. Illustrating that is Apple TV’s Jon Hamm series Your Friends and Neighbors, produced by Apple Studios, which has received two early renewals ahead of its season premieres, including one last week.
More budget flexibility also comes with ownership, with Apple allowed to stretch its budget further by doing more shows in-house, which are financially more advantageous. (Deadline reported in 2019 that, at the time, Netflix series from outside studios cost about 20% more than their Netflix-produced counterparts.)
For third-party series, Apple still uses the cost-plus model, pioneered by Netflix, in which streamers pay the full cost of a series upfront, along with a markup of up to 30% of the cost, making every show instantly profitable regardless of how it performs.
Those premiums add up, eating up a streamer’s programming budget and leading to fewer projects and platforms paying for things that aren’t necessarily going into the quality shows on the screen.
In 2024, Apple TV became the first streamer to introduce a new, performance-based compensation model for talent on shows produced by Apple Studios that involves bonuses based on a points system whose sizes are based on the number of people who signed up for Apple TV to watch and on viewership vs. cost. The arrangement, a version of which has since been adapted by most other major streamers, introduces a “more risk, more reward” approach akin to the old broadcast syndication model.
Instead of every series getting A- level payment regardless of performance under the cost-plus model, the talent behind the biggest Apple Studios hits are being paid at an A+ level while those with moderately successful shows still make money but at a B+ level.
This means that, for the top percentile of Apple Studios shows, talent can make a lot of money in the vein of the backend-based syndication windfall. According to Bloomberg, which reported on Apple’s initial proposal to the agencies in 2024, those involved in one of the top three shows on the platform could share up to $10.5 million per season.
That makes the Apple Studios points more valuable in success than if a show came from an outside studio. Part of the reason that is that Apple TV’s overhead costs are fixed; the staff are already employees of the streaming service, so Apple Studios does not have to charge overhead whereas outside studios typically charge overhead and distribution fees.
Apple Studios Slate
Since its launch several years ago, Apple Studios has produced 17 series — past, present and upcoming — as well as 10 movies.
That includes dystopian sci-fi drama Silo, which originated as a rare third-party production by AMC Studios. Following the 10-episode first season of the elaborate world-building series, whose cost likely ran into the hundreds of millions based on AMC Networks financials, the studio behind The Walking Dead franchise approached Apple about taking over as a studio, sources said. After examining the financials, Apple stepped in while AMC Studios segued to executive producing. The decision was amicable and, like the one on Severance, made with the future of the show in mind. Apple TV proceeded to renew Silo for a third and fourth season, a respectable run that makes the series financially beneficial to both parties.
Apple Studios also is doing co-productions, including the upcoming drama Imperfect Women, which is co-produced by 20th Television.
Imperfect Women, starring Elisabeth Moss and Kerry Washington, was among 17 series and movies releasing in 2026 that were showcased during Apple TV’s glitzy Press Day last week, with their stars and creators in attendance.
Upcoming Apple Studios series also include new seasons of Your Friends and Neighbors, Sugar, Sick and Silo as well as new series Lucky, Widow’s Bay, Maximum Pleasure Guaranteed and The Off Weeks. Other studio shows include Palm Royale, which is awaiting word on a Season 3 renewal, and limited series Dope Thief, Disclaimer, Lessons in Chemistry, Masters of the Air, WeCrashed and Black Bird.
On the film side, F1: The Movie, the highest-grossing sports feature of all time, became the second Apple Studios-produced feature to land a Best Picture Oscar nomination following Martin Scorsese’s Killers of the Flower Moon. The studio has coming up movies from auspices of both F1 (untitled UAP project) and CODA (Being Heumann); as well as Outcome, starring Jonah Hill, Keanu Reeves, Cameron Diaz and Matt Bomer; and a Stephen Chbosky project starring Mark Wahlberg.
Apple Studios was built to support Apple TV and currently produces series exclusively for the platform, similar to Netflix and HBO’s production arms and Amazon MGM Studios (sans MGM Television). Could that change in the future? The dynamics of the marketplace are constantly changing, and Apple has experimented with licensing on the movie side. That includes France, where there is an 18-month window if a film is released theatrically, so Apple theatrical movies sometimes fall outside of the streamer’s Canal+ deal.
English (US) ·