The NFL recently announced that Apple Music is the new sponsor of the Super Bowl halftime show, replacing Pepsi who had sponsored the show for the past decade. This is fascinating to me but not at all surprising. Regular readers of my blog know that I was part of the tiny team that birthed Apple’s original focus on music, and this was actually a dream scenario for us way back when. So I’m thrilled the day has finally come to pass.
And in a funny and ironic twist it feels like we’ve come full circle in terms of Apple’s culture with the baton moving from Pepsi to Apple given the storied quote from Steve Jobs when he was trying to convince John Sculley to join Apple from Pepsi. In his last attempt to encourage Sculley to become Apple’s CEO, Jobs famously said “do you want to sell sugar water for the rest of your life or do you want to join me and change the world?”.
At a minimum, the sponsorship makes sense for Apple Music as it competes against Spotify for the most listeners. But it gets even more interesting as we dive deeper into the details (including tying in AppleTV+).
Numbers weren’t disclosed in terms of the value of the deal, but speculation suggests Apple Music is likely paying $40M-$50M in annual fees (likely up to ten years) to have secured this arrangement with the NFL. And that could be an investment that justifies the expense when we look at several strategic factors in play.
Apple’s Recent Push into Sports
Apple Music and the company’s other content services are not designed to be profitable as siloed entities. These are lines of business that help the company attract more business to sell them Apple devices and subs. That said, Apple has been moving much more aggressively into the sports arena. In 2022 alone, it has cast some pretty big bets including investing the following sums for deals to stream on AppleTV+:
*$85M annually for MLB Fri Night Baseball (50 games)
*$250M annually for Major League Soccer
*$50M annually (let’s say) for NFL Super Bowl Halftime show (up to 10 years)
*In talks to invest $2.5B for NFL Sunday broadcast rights (and maybe over time, Monday Night Football as well).
….that’s against a backdrop of the company spending something like $8B total on content in 2022 alone. All those numbers combined are still less than the $12B in revenues that Apple made from AirPods in 2021.
The Super Bowl halftime show reached a global viewing audience in excess of 120M people for the 15-minute performance. It’s the most watched TV event of the year both in the US and across the globe. So this decision could be one of the most effective ways for Apple to reach (and grow) a global audience in the future.
International markets have had enjoyed faster growth of streaming and subscription-based products of late, and streaming content like the Super Bowl Halftime show makes it much more accessible to global viewers.
This is an especially big deal if Apple is able to livestream the halftime show on Apple TV+.
Of course all this should translate to greater awareness and enthusiasm around Apple’s latest product offerings in terms of both product sales and incremental subscriptions. And it’s a differentiated advantage for Apple to begin to dominate the sports landscape vis-à-vis other major streamers. Live sports are considered one of TV’s biggest draws.
Creative Artist Tie-ins for Apple Music
Apple has been one of the most artist-friendly companies on the planet hands-down pretty consistently over decades. While it’s not been disclosed how much direct influence Apple will have over performer choices to perform at the halftime show, I have to believe they’ll have the opportunity to weigh in — and likely more so over time. I can envision a broad mix of some pretty creative and innovative ad campaigns and promotions on Apple Music involving artists who perform at the SuperBowl (past and present); that’s part of Apple’s magic.
It’ll be great fun to watch how all of this unfolds, but for the moment I’m really bullish, enthused and optimistic about the many ways Apple will leverage this partnership to create some memorable moments. Let’s see!