Is Apple TV+’s Limited Content Library the Reason Executives Want Exclusivity in Live Sports?
From the outside, Apple TV+ is doing things just like its bigger competitors in the streaming industry are doing. It recently rolled out its second price increase in a year and is putting its ducks in a row to offer an ad-supported streaming plan as well.
- Apple TV+ has struggled to build scale because of its small streaming library.
- The streamer has just one-tenth the number of titles as Disney+, the next-smallest of the major streaming platforms.
- Apple’s pursuit of exclusivity in sports rights is likely a response to this problem, as live sports are a popular draw, particularly for a service with no licensed content.
Is Bigger Really Better?
A new report from Variety shows that the moves Apple is making to emphasize its streaming platforms may fall short because of its lack of scale relative to other streamers. Even as the service moves to integrate all of its video and options from third-party streamers onto a new version of the Apple TV app, it may not graduate to the next level of streaming success unless it can build up its customer base.
The smaller content library won’t help in that regard, particularly because it features a dearth of library content and licensed titles. This is by design; the company has a quality-over-quantity approach, and crafts each of its shows and movies to be an event unto itself, a release that fans of television will gush over because of its high production values and A-list cast.
But Variety uses Nielsen data to demonstrate conclusively that streamers with deep catalogs of library content are better at sustaining engagement. Apple TV+, on the other hand, has an above-average churn rate, suggesting that more users sign up for that service to watch a specific title and cancel when that title is complete than on other streaming platforms. The streamer is struggling to keep users engaged once it has them signed up, which may be part of the reason it has chosen to pursue its particular sports strategy.
Sports to the Rescue?
That strategy entails not pursuing sports rights unless Apple gets a high degree of exclusivity. This summer, for instance, Apple pulled out of its pursuit of English Premier League soccer rights in the United Kingdom, citing the fact that it could not offer EPL games anywhere else as part of the deal.
“We’re a global company, we have customers in every country in the world, a large number of customers, and it’s not exciting for me to have something that [some] can have but [some] can’t have,” Apple SVP Eddy Cue told the Daily Mail at the time. “I can’t justify throwing what I think are the best engineers in the world on a small subset product.”
Trying to pursue live sports deals that give maximum reach is a smart strategy, given that Apple has a huge global subscriber base for its various products and services. The audience is there if it can get the product to show them, and live sports are a proven driver of engagement for streaming platforms that offer them.
Still, Apple may end up having to compromise on the exclusivity proviso if it wants to get seriously involved in streaming other sports. That rule may have worked for Major League Soccer, which does not have a large international audience since global soccer fans usually tend to follow teams closer to home. But the NBA does have an international audience, and if Apple's rumored interest in that league’s games turns out to be more than a rumor, it will have to leave its dreams of international exclusivity behind unless it can come up with an outlandish amount of money (think hundreds of billions of dollars).
Apple’s pursuit of Formula One racing could tip its hand as to how it will handle future sports negotiations. One report indicated that Apple would offer a sliding scale of rights payments depending on how many exclusive races it gets, so those proceedings will bear watching in the coming months.
If Apple wants to continue with a strategy of exclusive, prestige content being essentially all it offers on Apple TV+, it will have to make some splashy investments in live sports to help keep users engaged. To do that, however, it may have to compromise on its rigidity when it comes to exclusivity in sports broadcasts.
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.