Apple TV Revs Up to Compete, For Real, In Streaming

Almost exactly six years after it launched, Apple TV is at an inflection point. In the span of a week, the streaming service rebranded itself, struck its first standalone bundle deal with a competitor, and inked arguably its most significant sports rights deal yet.

Taken together, it suggests that the tech giant is gearing up to drive (pun intended) new subscribers and viewers to the service, which is loved among Hollywood types for its premium original content, and feared for its perceived lack of scale.

Apple’s foray into streaming entertainment has been a slow build, with Zack Van Amburg and Jamie Erlicht essentially building a streaming service from scratch. But six years later Apple TV is still struggling to find an audience, relegated to the “other streaming” category in Nielsen’s monthly Gauge report — below the likes of Hallmark, AMC Network and Scripps in TV usage market share. Nor does Apple TV have a single series or movie currently on the top 10 of Nielsen’s streaming charts.

Apple has also not released any subscriber figures, though Eddy Cue, the head of the company’s services division, told a podcast earlier this month that it is “substantially more” than 45 million, which is what some outside analysts have estimated.

So the decision by Cue to rebrand Apple TV+ as simply Apple TV (or as the company called the change, a “a vibrant new identity”), followed in short order by the major partnership with NBCUniversal to launch an Apple TV-Peacock bundle, suggested that change was in the air.

Apple and Peacock were both regarded as subscale streamers, and both had been allergic to bundling outside of some telecom partnerships, but the new deal will “bring Apple TV’s beloved shows and movies to more viewers in more places,” said Oliver Schusser, Apple’s vp of Apple TV, Apple Music, Sports, and Beats.

And then on Oct. 17, Apple capped off the week with its long-expected but nonetheless blockbuster $750 million deal for Formula One rights in the U.S. It was a deal that Cue suggested was in line with the company’s long-term thinking: “We love looking forward,” Cue told reporters.

“This is something that we’ve dreamed of, in a way, and from the beginning of our vision for Apple TV, we wanted to deliver customers the best stories from the most creative storytellers,” Cue said. “We launched in 2019, and we started with nine original series, and now we’ve got a deep library of over 300 shows and movies and thousands of hours, and everyone on Apple TV in the U.S. will now get Formula One, they’re going to get everything that Formula One has to offer, and it’s going to be amazing, because we’re focused on quality and creating incredible content, and there’s no more incredible content than Formula One.”

Cue said that the timing of the Peacock bundle and F1 deal was a “coincidence,” but it’s just another example of how change is in the air at Apple, changing the name, changing the bundling strategy, and changing sports ambitions, which thus far have been limited to a deal with Major League Soccer, and Friday night Major League Baseball games.

“I’m a huge F1 fan, but I’m also a huge sports fan, and one of the things that we wanted to do if we were going to offer some level of sports is to be able to do it in a way that is what I think sports fans want, which is easy access, available, same location, same place, they know exactly where to get it, where it’s coming from, all of the complexities that you deal with in sports and watching going away,” Cue said, when asked by The Hollywood Reporter about how the new deal fits into the company’s sports strategy.

Cue added, “And I think for fans of F1 it’s going to be incredibly easy. It’s going to offer capabilities that they’ve never had before, just because of the ability of having the app and being able to work closely with F1 and what we’re able to do together that lets us differentiate. That’s hard to do. It takes a complete commitment from us and from the league or the sports entity and that’s the way we look at it.”

Or as CFRA analyst Angelo Zino explains: “The deal reflects Apple’s strategic approach to live sports, focusing on exclusive rights that allow complete control over user experience rather than traditional sports broadcasting models.”

Beyond Peacock, Apple has cut other deals over the last year in service of expanding the service, from a deal with Amazon to bring Apple TV to Prime Video Channels, to a partnership with Chase earlier this year to give Sapphire Reserve credit card holders complimentary subscriptions to Apple TV and Apple Music.

They are choices that have caught the eye of the creative community as well, a community that Apple has been deftly supporting through its high-profile and star-studded series and films.

“Selfishly, I think it’s great because more people get to see our show,” Severance executive producer and director Ben Stiller told THR earlier this year. “To be able to broaden the audience for certain shows that sometimes people might not be able to watch because they’re having to make choices on streamers — which I understand, too, it’s just a strange new time in terms of how you make these choices to watch things.”

And across the advertising industry, marketing veterans are wondering whether the changes Apple has made to Apple TV (including a steep 30 percent price hike in August) mean that even more change is coming: Perhaps a cheaper ad-supported tier?

Apple TV is the only major streaming service without an ad tier, though it does feature limited advertising on both Major League Soccer programming and its Friday night MLB games. A source familiar with the matter says that Apple’s F1 coverage will include commercials, though consistent with ESPN’s coverage, there will not be ads while cars are on the track during the Grand Prix races.

But as multiple advertising world sources note, Apple has hired its fair share of TV and streaming video veterans over the past couple of years, which, when combined with this newfound desire to cut deals to expand Apple TV’s reach, is certainly suggestive of broader ambitions.

“When we talk about Apple, I believe they’re talking about not only technology, not only connectivity, you’re talking about social relevancy,” said Stefano Domenicali, the CEO of F1.

The tech giant has the social currency, now Apple wants to ride the F1 wave, its new brand, and its newfound partnerships, to streaming relevancy.