Report: Apple TV+ Exploring Launch of Ad-Supported Tier as Early as 2023
Though once the antithesis of what streaming consumers were looking for when cutting the cord, ad-supported streaming services are becoming some of the most popular platforms in the industry. Netflix and Disney+ will both launch ad-supported subscription tiers in the coming months in hopes to capitalize on advertising revenue. And now, according to a report from Digiday, another premium platform may not be far behind.
Digiday reports that representatives from Apple have been meeting with advertising agencies about the possibility of advertising on Apple TV+. Those representatives have included Apple’s vice president of ad platforms Todd Teresi, which suggests that Apple intends to get rolling on its plans quickly. The report speculated that because of the energetic way in which Apple is meeting with ad agencies, an ad-supported Apple TV+ could arrive as early as 2023.
So what would an ad-supported tier of Apple TV+ look like? The report offered some hints. One ad agency executive who spoke to Digiday said Teresi “made it very clear that Apple will do nothing unless one, there’s a significant opportunity, and two, they would never do anything to jeopardize the relationship they have with their consumers.”
That could mean that Apple is exploring ways to incorporate an ad-supported tier without a major price increase on its ad-free tier. Apple TV+ doesn’t boast the library of originals or impressive subscriber numbers that platforms like Disney+ or Netflix do, but shows like “Ted Lasso” and “Severance” have gotten widespread acclaim from audiences and critics making it somewhat of a boutique streamer slowly laying the groundwork for future expansion. A free, ad-supported tier would allow Apple to put those shows in front of more eyes and make some quick cash from them at the same time.
Another ad agency representative said that Teresi had spoken with their company specifically about ad opportunities surrounding Apple TV+’s sports offerings. Apple signed a 10-year deal to become the exclusive home of Major League Soccer in June, but the sports-centric nature of the discussions could also signal Apple is confident that it will land NFL Sunday Ticket. Apple has long been involved in talks with the NFL about securing its out-of-market games package when it leaves DIRECTV after the 2022 season. However, since Sunday Ticket simply broadcasts games already airing on CBS and FOX, Apple likely wouldn’t be looking to sell a full complement of ads on those broadcasts, but could bulk up their commercial opportunities due to the added customers the package would bring.
Throughout the 2022 regular season, Apple TV aired a weekly Friday night Major League Baseball doubleheader, which did feature traditional commercial breaks. However, outside of the Apple-specific ads in the broadcasts, MLB was responsible for selling the spots in the games. Apple and MLS will split those responsibilities when the decade-long soccer deal launches next year.
If Apple TV+ is the next service to introduce an ad-supported tier, it will almost certainly not be the last. More and more customers are becoming comfortable with ads in streaming content, especially if they are accompanied by a lower price point. For companies, it’s a no-brainer, as they can bring in more subscriber dollars and advertising dollars at the same time.
As of now, Apple TV+ is already one of the most inexpensive streamers on the market coming in at $4.99 per month. The MLS package will include some games exclusive for subscribers — and some matches will be free to everyone via the Apple TV app — the bulk of the package will be reserved for customers who pay for a standalone service. Similarly, the NFL’s contracts with its linear partners require that the out-of-market package remain at a “premium” price in order to limit the impact it has on local broadcasts. So, if Sunday Ticket migrates to Apple following this season, it will, again, require its own, high-priced subscription.
However, that doesn’t mean that there won’t be some sort of Apple TV+ exclusive carveout in the negotiations like the streamer has with the MLS. This would allow Apple to sell highly valuable ads on in-demand content, making the company’s anticipated multi-billion dollar deal at least somewhat more palatable.
Apple TV+
Apple TV+ is a subscription video streaming service for $9.99 a month that includes high-quality original shows and movies including Best Picture winner “CODA,” popular sitcom “Ted Lasso,” and dramas like “The Morning Show” and “Severance.” Apple TV+ is also home to MLB baseball games on Friday nights and MLS Season Pass.