Why Apple’s MLS pact is such a big deal
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we examine Apple’s new deal with MLS and new data on Amazon Music. Plus: COVID testing, the video game.
Apple’s MLS deal rings in a new era for sports
Apple’s new partnership with Major League Soccer is more than just a big get for the iPhone maker. It’s a massive shift in how sports are being distributed, and further calls into question the future of the cable bundle. It’s also a blueprint for sports itself, as more leagues are trying to reinvent themselves to find new and younger audiences.
Apple announced a 10-year pact with MLS this week. Under the deal, Apple will carry over 1,000 soccer matches a year. A subset of those games will be made available for free to everyone via the Apple TV app, while others will only stream to Apple TV+ subscribers. Finally, a good chunk will be behind yet another paywall — a new MLS streaming service that’s exclusive to the Apple TV app.
All of this is a “VERY big deal,” according to Lightshed Partners analyst Rich Greenfield, who has been a cable bundle skeptic for some time now.
- “The future of linear tv is growing dimmer by the day as the last thing holding the bundle together, sports continues to migrate to streaming,” Greenfield wrote on Twitter Tuesday.
- To be fair, MLS is not ditching traditional TV altogether. The league is still in negotiations with multiple TV networks to carry games on television.
- However, those games won’t be exclusive to pay TV, as soccer fans will be able to watch them on Apple TV as well.
- This also means that TV networks may be paying a lot less for those games. “MLS is now a digital and streaming first property, not sure how valuable those TV rights are without any exclusivity,” said Playmaker Capital Sports Media Analyst Adam Seaborn.
- Some have argued that this isn’t that big of a loss for cable. Soccer still doesn’t have the same cachet as the NFL or the MLB, which means it brought in less money.
- “MLS was never a large ad revenue generator for [Canadian and U.S.] TV networks,” acknowledged Seaborn.
- “It was, however another reason for people to keep the cable bundle and subscribe to linear TV,” Seaborn added.
Yes, but what about all those other sports rights? MLS is the first sports league to sign a deal like this with a streamer, and cord-cutting skeptics pointed out this week that sports fans still need a cable subscription to watch the games millions of people care about.
- “Major sports [are] tethered to TV for the next decade [plus],” argued fuboTV CEO David Gandler this week.
- Gandler’s fubo is an internet-based pay TV service with a heavy emphasis on sports networks, so he has a vested interest in TV keeping a hold on sports. Still, he’s not wrong: Many NFL rights in particular are tied up until 2033, benefitting networks like NBC, Fox and ESPN.
- However, even in those contracts, some cracks are starting to emerge. Amazon acquired the exclusive rights for Thursday Night Football in 2021, with first games airing on Amazon’s streaming service later this year. Amazon has a lock on those rights until 2033.
- Some other sports rights are up even earlier. MLB rights expire in 2028, and the NBA rights are up in 2025.
- And then there’s Sunday Ticket, which may go to streaming as early as next year.
For those sports leagues, the MLS deal could be a blueprint. That’s true for economics, with MLS laying out a multitiered approach including traditional TV, a major streaming platform and a new streaming service for soccer superfans. But it’s also about reinventing sports TV for a new generation of viewers.
- Sports leagues have been taking some steps in that direction in recent years, toying with everything from NFTs to volumetric capture.
- However, the most consequential step to stay relevant may be to meet younger viewers where they are.
- As a sports fan pointed out on Twitter this week, “This is pretty much their only chance at long term growth. Long term growth requires the younger demographic to watch games, and going forward, that demographic is pretty much just going to watch video content via direct streaming apps.”
— Janko Roettgers
Amazon Music is a massive moneymaker
Spotify is huge, Apple Music is a serious contender and Google has long tried to establish YouTube Music as a major player. Amazon Music, on the other hand, often gets overlooked. That’s a big mistake, if new numbers from data.ai are any indication.
- The company formerly known as App Annie said that Amazon Music recently surpassed $500 million in lifetime revenue on iOS alone.
- Amazon Music launched on Apple’s App Store in January 2012, meaning that it took the service a decade to reach that milestone.
- However, the total lifetime revenue of the service is likely a lot higher: Amazon Music doesn’t currently allow people to subscribe to its service from the Android app distributed via Google Play, according to data.ai. This means that Android users likely sign up directly on Amazon’s website.
- Amazon also has its own app store for Kindle Fire tablets and other devices, and the company is letting people subscribe directly via Alexa on its smart speakers.
- Amazon Music also has a “free” tier for Prime members, which are then being upsold to a slightly less expensive unlimited tier ($8.99 per month versus $9.99 for people without Prime).
Don’t expect Amazon to brag about these numbers anytime soon though. The company notoriously releases meaningless stats without absolute numbers (“more people than ever before”), and there’s little reason for Amazon to change its tune in this case. After all, why start making noise if you can be so successful without it?
— Janko Roettgers
A MESSAGE FROM APPDYNAMICS
Full-stack observability with business context enables companies to digest IT performance to easily identify where they can prioritize performance and tackle issues that strategically impact their bottom line. This correlation of technology and business data allows IT leaders to make smarter, strategic decisions based on actual business impact.
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Someone please build this app
I don’t know about you, but I’ve taken dozens of COVID rapid tests over the past two or so years. The ritual is always the same: Swab your nose, set a timer, spend 15 minutes anxiously checking the timer and hoping for the best. What I’d like to use instead is a mobile game that lasts exactly 15 minutes, distracting me from the test, then alerting me when it’s ready and finally giving me a chance to share the results with local health officials. Just imagine how much more fun testing could be! And how much more self-test data could be captured this way. Can someone please build this? Just don’t make it a zombie or otherwise virus-outbreak-related game, because that would be too much on the freshly swabbed nose.
— Janko Roettgers
A MESSAGE FROM APPDYNAMICS
Organizations that have already started the move to a full-stack observability approach are seeing results and clear return on investment (ROI). In the AppDynamics research, 86% of technologists reported greater visibility across their IT stack over the last 12 months when implementing full-stack.
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