Why the Apple/NFL Super Bowl Deal Matters to New Hollywood and Sports Viewing

Apple wants to be a sports brand, and the NFL is happy to help for a price. The NFL announced that Apple Music has replaced Pepsi to become the new partner for the Super Bowl Halftime Show, beginning with Super Bowl LVII, which will be played on Sunday, February 12, 2023. Terms of the deal were not disclosed. But reportedly the NFL had been shopping the sponsorship deal around for around $50 million.

The news is another example of a New Hollywood streaming business expanding into the lucrative live sports market. Apple has already made deals to broadcast Major League Baseball and Major League
Soccer games on Apple TV Plus, and New Hollywood rival Amazon
broadcasts the NFL's Thursday Night Football. Why? Because 95
five of the top 100 most watched programs of 2021 were sports telecasts, and 75of those were NFL games. Apple is also reportedly in talks with the NFL for the rights to a package of Sunday football games. Consider the cost of being a Super Bowl Halftime Show to be a down payment for what Apple really wants: broadcastingNFL games.

Apple versus Amazon

Apple has good motivation to compete with Amazon, which became the first streaming service to hold exclusive rights to a package of NFL games, in a deal to broadcast Thursday Night Football (at an annual cost of $1 billion to Amazon). The Thursday Night Football broadcasts kicked off September 15, and so far the results for Amazon look great. When the numbers were tallied up by Nielsen and reported September 22, Amazon had delivered an average of 13 million viewers during the game, exceeding the 12.5 million viewership that Amazon had promised to advertisers. The game was the most-watched program of the night. No. 2 was CBS’ Young Sheldon, with 3.5 million viewers. Amazon estimated that viewership numbers topped 15.3 million. The additional numbers from Amazon's tracking comes from the company's ability to measure viewing across connected TVs, their apps and who might be watching a separate feed on Twitch. By any measure, the results are especially impressive when you consider that to watch the game, fans needed to get an Amazon Prime subscription, which costs $139 annually – thus reducing the potential pool of viewers.

Amazon reported big numbers in one other crucial area: Prime sign-ups. According to Amazon, the September 15 broadcast drew a record number of Prime sign-ups for a year-hour period – bigger than Prime Day or other big shopping days such as Black Friday and Cyber Monday. This is important because Prime is a cash cow. Amazon Prime sales generated an estimated $30 billion in revenue in 2021.  Each Prime member spends about $1,400 per year, while the non-Prime subscribers spends $600. 

How Viewing Life Sports Is Changing

If Apple successfully expands its reach into live sports, streaming sports programming will only get more competitive. Viewers can already stream sports content via options such as MLB TV, NFL Game Pass, ESPN+, and Hulu + Live TV. Apple will rely on streaming as an entrée to Apple Music and Apple TV+. But Amazon Prime will scratch and claw for more programming the same way it attracts viewers for all its streaming content: Amazon Prime. No one else can bundle together a sports viewing package with all the benefits that come with Prime, ranging from free shipping for Amazon purchases to savings at Whole Foods. 

Sports streaming will become more personalized and dynamic as well. Amazon Prime already offers different formats for TNF, including Prime Vision with Next Gen Stats such as Passing Score, a first-of-its-kind artificial intelligence tool that combine seven machine learning models, including a new model to predict the value of a pass before the ball is thrown, to evaluate quarterback passing performance. To answer Amazon, Apple will need to offer an innovative alternative, assuming Apple lands a programming deal with the NFL beyond the Super Bowl halftime show. 

But sports streaming will become more expensive for fans as New Hollywood extends its reach. Live sports is already becoming fragmented like entertainment has become since the streaming wars started. And we know how that will play out for sports fans: watching sports will mean subscribing to multiple streaming platforms.

How Will the Super Bowl Halftime Show Change?

As for the Super Bowl Halftime Show:

• The music won’t change much. The NFL and Apple will continue to feature musicians who appeal to the largest common denominator. After all, the Super Bowl is a global event with an average audience of 112 million people. Super Bowl LVI in 2022 averaged 103.4 million viewers. There’s no way the NFL is going to allow an edgy risk taker to perform. It was telling that the NFL didn’t embrace hip-hop until 2022 by featuring artists such as Dr. Dre and Eminem only until long after they had become mainstream stars. They would have never been allowed anywhere near a Super Bowl Halftime Show in the 1990s when they were controversial. One potential and welcome change: featuring younger, up-and-coming international artists, befitting Apple Music’s own brand as a source of music discovery. Will 2023 be the year when we see a K-pop band like Hot Pink perform?

• The marketing of the Super Bowl Halftime Show will change. The show will become a direct-response mechanism to drive more Apple music subscribers. Apple is one of the world’s wealthiest and powerful brands. The company owns its own global content distribution arm through Apple Music (with a global subscriber base that rivals Spotify’s), the iPhone, Apple Watch, and Apple TV+, in addition to a retail network of stores. Apple understands the value of making the Apple Music brand visible to 103 million viewers and won’t be shy about doing that with advertising and branding before, during, and after the show. I hope the marketing is more imaginative and interesting than it was when Pepsi was the
  official partner. 

• The Super Bowl Halftime Show will become more appealing to musicians. Pepsi has nothing on Apple Music for brand cachet in the music world. With Apple Music, the show will drive more awareness for artists, and you can be sure their Apple Music streams will jump when they perform. Apple Music will promote its artists to both current and potential subscribers while also opening up marketing syncs
  with Apple partners.

Bottom line: this is another example of New Hollywood streaming companies like Apple delving into live sports. The Super Bowl halftime show will continue to feature safe artists befitting its global scope, but Apple Music and the NFL might lean into younger, international names. The event will become a branding opportunity that will rely on Apple’s powerful content distribution machine, to the benefit of Apple Music.