“Here’s a use of cash that Apple should be following up on right now, with no concerns for anti-trust,” Eric Jackson writes for Forbes.
“Apple should outbid all the broadcast networks and cable companies and win the exclusive rights to the NFL Thursday Night Football package which is available right now, as described this morning by Peter Kafka,” Jacksone writes. “Apple could pay $4 billion for a 5 year package and still make boatloads of money from it.”
Jackson writes, “Apple could pay $4 billion for a 5 year package and still make boatloads of money from it.”
Read more in the full article here.
MacDailyNews Take: As we wrote back in May 2014:
Perhaps Cook should consider bidding for and winning NFL Sunday Ticket away from Direct TV, buying rights to Premiere League and La Liga games, etc. and making them Apple TV exclusives. Go directly to the sports leagues with boatlods of cash. Maybe that’ll grease the wheels. It’ll certainly move a bunch of Apple TV boxes around the world in short order.
Making football fans and every sports bar go out and buy an Apple TV for every TV they want to watch football on is not going to win you many fans.
Maybe Apple will give a Aaron Rodgers “Discount Double-Check”?!? Sorry friend, couldn’t resist.
The premier league rights for the UK alone for 3 years were over $7 billion. That’s an awful lot of Apple TV boxes if they’re not going to charge for it and that’s not factoring in any other sport at all.
I’ve only skimmed that article, but it talks about the cost of US rights to NFL but then talks about worldwide Apple TV numbers.
Let’s say Apple makes $60 on the average AppleTV purchase.
You’d need to sell 105 million Apple TVs to recover a $6.3 billion investment (that’s how much Sky paid for its block of 126 games every year for three years). That sort of transformation isn’t going to happen overnight.
However – if Apple leveraged the so-called ‘second screen’ concept – where viewers could subscribe to additional content on an iOS mobile device including a social element – that could make more economic sense by re-energising the iPad market.
If you had five million people each year buy an iPad that they wouldn’t otherwise have purchased, that might generate around $1 billion a year in profit so $3 billion across a three-year deal. Selling 15 million Apple TV might generate another $900 million across the lifetime of the deal, so that’s $3.9 billion.
Get 7.5 million people to pay $90 a year for the subscription on their iOS device and that’s another $2 billion.
So that’s $5.9 billion put of the $6.3 billion, however – if I were Apple – I’d want a return on my investment, probably another $3.3 billion (which is closer to what I could have got if I invested it in R&D in the next big things); so now I’m probably looking for around $3.7 billion in advertising and sponsorship revenue.
It sounds like a lot, but not when divided over 380-odd games at 40 30-second slots per games and having done all the remaining sums, there’s nothing that I can find that’s particularly outlandish, especially as you can generate a national revenue stream for the TV side of things and a tailored and targeted local revenue stream for the ‘second screen’ on an iPad or iPhone.
As Swift 2.0 become open-source and there are already versions that will target Android, Apple could also produce ‘second screen’ experiences (albeit possibly not as rich) on other mobile platforms as well which increases the audience and generates more revenue.
So the article isn’t too far ‘out there’ in terms of whether acquiring exclusive sports rights would be a potential money spinner. But the devil is in the details and it would definitely be a ‘long tail’ kind of play to acquire rights to the major football leagues, baseball, American football, tennis, golf, motor racing and the other big draws in TV sports, especially if you were aiming for global exclusivity.
That 105 million Apple TV’s just covers the cost of premier league in the UK, every person would need to buy more than one Apple TV each.
The SKY package doesn’t even cover all the games, and there are regulations preventing any one company buying all the available games.
7.5 million people are not going to spend $90 just on premier league football, if only because they’re then still likely to have to spend to get BT (or whoever has the other football), plus we’re not even into all the other sport that is available which you’d still have to pay for (likely through SKY), or even just other football (champions league, europa, etc).
SKY paid a fortune, but ultimately they’d likely spend even more to keep it.
I think what’s very interesting is the new SKY Q service, you’re going to be able to have a central box which can record multiple things at a time, the contents of which can then be streamed to other boxes and devices. Since much of the content will still come from Satellite there won’t be the same issues of stretching what are often still slow internet connections to the limit. I think with their existing library of content and subscribers and the addition of things like youtube then it will be heavily competing with Apple TV – in which case Apple TV will effectively only have apps to differentiate it.
I would personally love if SKY allowed the SKY Q box to stream to Apple TV which would give you access to everything.
I think the point is that as has been shown by BT it is very expensive to get into Sports (especially in the UK) and that’s before the prices are driven up even further by a new competitor such as Apple and hard to make that money back even if you’re making a bit on selling hardware.
If Apple did this, should they not also request that iPad Mini’s, Airs, and Pros be used on the side lines?
To expand on Now, Now’s point; I can’t see this happening with the MS deal currently in place with the league.
I sure wish they would just put the word “computer” back in the company name.
Amazon customers will wonder what ever happened to NFL Sunday Ticket. 😉
Apple may get a lot of new customers, but they will be disgruntled customers pissed off that they were forced (by a big evil company) that forced them to buy an Apple TV. Not the kind of customer that comes back for repeat business.
Think what your reaction would be if Amazon bought the rights and forced you to buy an Amazon box or stick.
I remember when sports were shown for free on OTA TV… before cable.
What’s the difference when you have to do the same thing now… only it’s a cable/satellite box?
None.
It doesn’t bother me though. Since, not being a fan of sports in general (although I don’t have a problem with baseball and was something of a fan in my youth) and of contact sports in particular (football, soccer, boxing, etc.) I wish the sports industry would just dry up and blow away.
You might also guess I’m really not a fan of the public being required to support their nonsense. It hasn’t endeared me to sports. When I had cable/satellite I wasn’t fond of having to pay for all those sports channels I didn’t want, let alone watch. I find shopping channels more entertainining.
As a tax payer and laissez-faire capitalist, I am unalterably opposed to the public funding that is behind the building of the vast majority (well over 90%) of sports venues. Let the teams, owners, and franchisees pay for their own stadiums.
The difference is you can get it on any number of cable/satellite services. You don’t have to just to AT&T for example.
Apple: proud sponsor of head concussions.
Not a good idea.
Apple buy sports rights. Yes. But they don’t sell them to the public, they give them away to any TV companies who offer the content in their apps on the Apple TV.