Apple Looks To Go Deep To Expand Presence In A Growing Area

One thing that makes the streaming space so interesting is watching how each company uniquely goes about pursuing its content. Each platform has its own specialized approach based on what it perceives its subscribers want to watch.

At least for the vast majority that is the case – with places like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) however, there’s another side of the coin. For them, the content is more a means to an end. It’s the method they use to get customers to buy their products and that’s exactly why paying such a premium for content doesn’t faze them.

Everything evens out in the long run.

For Apple specifically it’s been a very quick journey as the service itself is only a few years old and in that time it has blown through the benchmarks set by other rivals. In the process it has also allowed the service to blaze its own its trail and move fast when it sees something it wants.

And it wants sports.

So how is it going about it? And why did its latest move foreshadow a bigger one?

First as always, some background.

To understand Apple’s approach you have to understand Netflix’s (NASDAQ:NFLX) approach and why it has become problematic.

One of the flaws in Netflix’s strategy has always been that it’s addicted to the “all-at-once” strategy. It has trained its subscribers to believe instant gratification was only a click away. When a show drops, it drops and your only limitation is how much time you personally have to watch straight through.

The problems with that are multiple as Netflix burns through content at a fast clip, sets up a situation where audiences can watch for a short period and cancel and on top of that lose the value that comes with a live shared experience.

Yes it has also been successful for Netflix but we’ve now come to a point where that success is being stretched to its limits.

You don’t have that with sports – it’s always changing, has low production costs and happens every year like clockwork.

It also is appointment TV.

That’s the appeal… it’s a captive and loyal audience that will keep coming back to your service on a daily or weekly basis.

And with betting now legal in many states, it makes even the worst game of the week something of great interest to people outside those specific markets.

For a new player like Apple, sports also helps it garner more subscriptions and content to its roster which can in turn lead to more hardware purchases – which has always been the end goal and helps offset some of the high acquisition costs.

Yet what makes Apple’s approach extra smart is how it’s going beyond just the rights.

For example, earlier this year Apple made a deal with Major League Soccer that would not only give it streaming rights, but the rights to build a brand new all-encompassing platform for the league. This takes Apple from a content provider to a content maker and that’s a huge difference for investors and subscribers. Yes, it will cost more, but they will make it up in the long run.

It’s the simple concept of going full-measure vs. half-measure.

At the time that move also was seen as a precursor to more big moves and just recently we saw that begin to come to pass. The company recently took over sponsorship rights to the NFL Super Bowl halftime show. The deal picks up where Pepsi (the previous sponsor for over a decade) left off and begins this year.

While Apple doesn’t yet have rights to NFL content, in doing this it has closely aligned itself with one of the game’s most recognizable aspects. Let’s also be honest at a price tag of $50 million a year, this isn’t a bank breaker for Apple either.

What it is though is genius.

There are rumors that Apple and the NFL are finalizing or possibly have even already closed a deal to bring NFL Sunday Ticket to Apple TV+ starting in 2023, but both sides are waiting for the right moment to announce.

Can you think of a better moment during the run-up to this year’s Super Bowl?

And even if that doesn’t happen and the rumors are overblown, what Apple’s done is buy the next best thing to game rights. The halftime show gets just as much attention as the game itself does and in a wider section of media, maximizing potential exposure.

Personally, I buy into the rumors or at least the notion that Apple and the NFL really do want to work together in a big way. Maybe this is it or just the start of it, but the NFL has been smart in ensuring its content is shown across the board.

Remember the NFL has deals with ABC/ESPN, CBS/Paramount, NBC/Peacock and FOX/Fox Sports, in addition to Prime Video that covers broadcast/linear and streaming, plus its own streaming site that is more of a catch-all type experience for die-hard fans.

Adding Apple to that list only grows the base more which is a key goal of the league.

And yes, there’s still a chance that Disney (DIS) slides in and grabs the deal for ESPN+ or an outlier like Google (GOOG) (GOOGL) scores the package, but Apple seems the most logical and this new development seems to paving the way to that resolution.