Are Apple TV+, Amazon Prime Video Poised for Big Gains as Other Streamers Pull Back?

There have been a number of seismic shifts in the streaming world since Netflix announced in April that it suffered its first quarterly subscriber decline in more than a decade. The streaming giant itself has announced reversals of long-held beliefs on advertising and password-sharing, and numerous streamers have confirmed that they would be cutting their content budgets by billions of dollars.

However, there are two streamers that appear to be leaning into content spending just as the rest of the industry is pulling back. Both Apple and Amazon are reportedly in the running to secure the NFL Sunday Ticket package beginning in 2023. The out-of-market rights are expected to carry a price tag of $2 to $2.5 billion per season.

While it is believed that Apple TV+ has already locked up those rights, that doesn’t mean that Prime Video won’t be in the NFL business. Amazon has secured the exclusive broadcast rights to the league’s Thursday night games for the next 11 seasons at a cost of $1 billion per year.

While live sports rights will always be expensive, that is far from the extent of the content spend for either streamer. Apple TV+ is expected to spend $6 to $7 billion per year as it continues to build up a library of critical and artistic darlings like “Ted Lasso,” “Severance,” “For All Man Kind,” “The Afterparty,” “Slow Horses,” “Pachinko,” and more.

Over at Prime Video, Amazon has reportedly given the upcoming “Lord of the Rings: The Rings of Power” series five seasons to play with according to Empire. The first season alone is expected to cost $465 million, or roughly the cost of 8.5 Thursday night football games. No matter how large the worldwide Tolkien fandom might be, it is tough to imagine the return on investment for an eight-episode season when each episode costs north of $58 million.

Of course, there is a fairly common-sense explanation as to why Amazon and Apple are not as afraid to spend obscene amounts of money while their streaming competitors are tightening their pursestrings; and that’s because neither Amazon nor Apple are streaming companies; in fact, they aren’t even primarily entertainment companies. Both have much bigger operations and ambitions than simply turning out content to drive advertising and subscriptions. Of course, that is part of both companies’ business plans, but that’s not where they make the bulk of their money.

When discussing the future of streaming, Jason Kilar — who launched both Hulu and HBO Max — doesn’t even lump Prime Video and Apple TV+ in with the rest of the streamers.

“My hunch is there’s probably going to be three must-have general entertainment streaming services,” he told Vulture's Joe Adalian earlier this year. “WarnerMedia is clearly one with HBO Max, and then I put Disney and Netflix in that camp as well. I’m setting aside Apple and Amazon because they’re kind of different things — one supports a hardware strategy, the other supports a retail strategy.”

As tech companies, both Apple and Amazon have become amongst the world’s most profitable by zigging when the rest of their respective industries are zagging. As Disney cut its fiscal year content spend by $1 billion and Netflix is looking to pull back on the number of titles it produces, 2022 and 2023 could be the years that the two outsiders begin to fully exert their power in the streaming world.

If Apple TV+ does end up with the Sunday Ticket rights, that will make the service nearly indispensable to millions of football fans. And while the streamer still does not have nearly the expansive library of any of its competitors, with its continued investment in A-list talent — and seemingly unmatched hit rate — it doesn’t need to have a Netflix-sized archive to be a worthwhile value for consumers, especially its their steady stream of well-reviewed weekly releases.

Amazon has already shown that it is willing to spend money on high-profile content — be it sports, fantasy series, or one of the most venerated movie libraries in Hollywood history — so the question is whether either company’s internal calculus shows that they even really need to make money on streaming at all. In pursuing their individual hardware and retail goals, can they afford to invest billions into streaming simply as a loss leader for their overall bottom lines?

While neither Amazon nor Apple breaks out their subscriber totals during earnings reports, it is estimated that the former boasts the second-largest base behind Netflix at 200 million while the much newer Apple TV+ has climbed to 25 million subscribers. However, Amazon’s total active users is difficult to accurately pin down because it is given away as part of Amazon Prime subscriptions, and Apple TV+’s has been bundled with other services and Apple products.

No matter the exact totals, given the unique value proposition for each company to continue to invest in streaming, both appear to be perfectly suited to capitalize on the moment at hand in which nearly every other streamer is looking to rein in their spending and reassess their priorities. If staking out a sizeable portion of the streaming market is in the plans for either Apple or Amazon, they certainly have the money to do it, and there will likely be no better time than the present.