According to Digiday, Apple is looking to sell video ad inventory beginning in early 2023. This follows early talks with media agencies where Apple has discussed preliminary plans to sell video advertising space against its original content and live sports ventures.
The move would bring Apple TV+ in line with the strategies of other streaming services. All major streaming services, except Apple, have announced or already offer ad-supported plans. Market leaders Netflix and Disney+ will launch ad-supported tiers in the next couple of months. The cheaper price attracts price-conscious consumers during this period of inflation and a weak economy climate.
Apple has taken a premium-first approach with TV+ up to now, combining top Hollywood talent with big budget productions across its original TV shows and movies. TV+ currently only has a single $4.99 per month tier, which gives access to all programming in 4K HDR quality with no ads.
However, services like HBO Max have shown that media networks can retain the prestige whilst offering a variety of plans, including ad tiers.
Whilst Apple TV+ has received many commendations when it comes to industry awards, viewership of the service remains low. It is estimated to have about 5% of US streaming TV marketshare. An ad-supported (possibly free?) tier could boost adoption of the TV+ service, and bring in a lot more viewership.
Ad-supported tiers also help mitigate price increases, as streaming services focus less on subscriber growth and target profitability. Disney+ will launch an ad tier in December at the same price as ad-free Disney+ costs today, $7.99 per month. At the same time, the price of the ad-free tier will rise to $11 a month.
Apple’s availability of video ad inventory is also linked to its ventures in live sports. MLB Friday Night Baseball already accrues some ad revenue on the TV+ platform, but so far these spots have been sold by MLB Network, not Apple.
Next year, Apple TV will be the exclusive home of Major League Soccer, streaming all games for the next decade — with no geographic blackouts. Sponsorship and commercials on the streams will be sold by both Apple and MLS in a revenue share agreement.
Apple is also expected to land rights to stream NFL Sunday Ticket, with other sports deals likely to follow in the future. These live sports packages will bring in millions of potential eyeballs to sell advertising against.
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