Julia Alexander, Parrot Analytics director of strategy and Puck contributor, joins Matt to talk about Apple TV+ and its current standing with consumers, Apple's big bet on Major League Soccer, the dilemma of investing in live sports games versus original content, and the challenges Apple TV+ faces in competing with ESPN.
Apple TV Plus faces challenges in market reach and brand awareness, despite its MLS partnership boosting viewer numbers.
The decision between investing in live sports games or creating original content is a complex one for streaming platforms like Apple TV Plus.
Deep dives
Apple TV Plus and the Reach of MLS
Apple TV Plus, despite its small subscriber base of 15 million in the US, has made a significant move by securing a 10-year $2.5 billion deal with Major League Soccer (MLS) to air games and sell a season pass package. This move coincided with soccer star Lionel Messi signing an innovative deal with the Miami team that gives him a small share of Apple's economics. While the MLS deal and Messi's involvement have boosted Apple TV Plus and attracted more than a million viewers to the games, the streaming service still faces challenges in terms of market reach and brand awareness. Apple TV Plus lacks a strong catalog and struggles to retain and acquire new customers beyond its niche fan base. The question then arises: is the MLS partnership working for Apple, and how does it impact the company as it explores the sports versus scripted content debate in the streaming space?
Apple TV Plus' Small Subscriber Base and Competitive Landscape
Despite Apple TV Plus' impressive shows like Ted Lasso and some critical success with original films and animation, the streaming service only has 15 million subscribers in the US, making it significantly smaller than competitors like Netflix and Disney Plus. Apple TV Plus also faces challenges in brand recognition and appeal to a wider audience. A brand study conducted by Puck showed that Apple TV Plus ranks near the bottom in all categories. The streaming service's focus on specific types of content, such as sci-fi and kids' programming, limits its potential to acquire new customers and retain existing ones. Overall, Apple TV Plus' small reach and limited catalog present challenges in the highly competitive streaming market.
MLS, Messi, and the Impact on Apple TV Plus
The involvement of soccer star Lionel Messi in MLS and the $2.5 billion deal between Apple TV Plus and MLS have brought attention to the streaming service. The demand for Messi as a talent has significantly increased, with his popularity skyrocketing since joining the league. While there are indications that more than a million people are watching MLS games on Apple TV Plus, concrete viewership numbers and the long-term impact on the streaming service remain uncertain. The investment in MLS raises questions about Apple's strategy and whether it is primarily focused on expanding its subscriber base or if it is utilizing sports as a testing ground for broadcasting live games and building a strong advertising media center. The broader question of whether Apple's entry into live sports broadcasting is a viable strategy, given its smaller subscriber base, also arises.
Spend on Live Sports or Original Content?
The debate between spending on live sports games versus original content is a complex one for streaming platforms like Apple TV Plus, Amazon Prime, and Netflix. With $2.5 billion to spend, these platforms must weigh the advantages and disadvantages of each approach. While live sports games offer the ability to commodify attention and attract advertisers, they come with the risk of high churn rates and the need for a significant reach to effectively compete with traditional pay TV. On the other hand, investing in original content allows platforms to build a strong catalog and target specific audiences. Ultimately, the decision should consider factors such as pricing power, audience demographics, advertising potential, and the global reach of the platform.
Matt is joined by Parrot Analytics director of strategy and Puck contributor Julia Alexander to talk about Apple TV+ and its current standing with consumers, as well as the company's big bet on Major League Soccer and whether it’s working, how Lionel Messi is juicing its numbers, what its long-term play is in sports, and whether a streamer’s money is better spent on live sports or creating new original scripted content.
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