Prestige is the prize for AppleTV+ at the Emmys, not subscribers


Brendan Hunt, Jason Sudeikis and Brett Goldstein star in AppleTV+’s “Ted Lasso.”

Apple

Is this the year of Apple TV+?

The streamer’s historic Best Picture Oscar win was overshadowed by an altercation between actor Will Smith and comedian Chris Rock in March, but big wins at Monday’s Emmys could cement the service as one of top-rated content in the streaming space.

“Apple TV+ follows a ‘less is more’ strategy,” said Peter Csathy, founder and president of consulting firm Creative Media. “Fewer titles but bigger names and higher quality.”

In recent years, Csathy noted that Apple TV+ has built a small but critically acclaimed catalog that’s “almost becoming the new HBO,” which was known for its quality series before its merger with HBO Max.

Apple TV+, which has been around for less than three years, garnered 52 total Emmy nominations from 13 different titles in 2022. HBO and HBO Max landed 140 nominations combined, and Netflix received 104.

Apple TV+ hit “Ted Lasso” is up for Outstanding Comedy Series again, while his new show “Severance” is up for Outstanding Drama Series. Competition in both categories is tough, in part due to new entrants like “Squid Game,” “Yellow Jackets,” and “Abbot Elementary.” This is also the last year of eligibility for “Better Call Saul” and “Ozark.”

Earlier this year, Apple TV+ won Best Picture at the Oscars for “CODA”, marking the first time a streaming platform has won the top prize. Troy Kotsur, who starred in the film, also became the first deaf man to win an Oscar for his acting role.

Already, streaming services have used the prestige associated with Hollywood nominations or awards to encourage subscriber signups or recruit top talent. Over the past decade, Emmy awards for shows like “Orange Is the New Black” and “The Crown” have bolstered Netflix’s reputation, helping the service attract top talent like Ryan Murphy, Shonda Rhimes and Guillermo. delToro.

Still from “Severance” from AppleTV+.

Apple

Such prestige is all the more critical for Apple, which has long been associated with the biggest names in music and Hollywood for its cachet. Indeed, the main objective of Apple TV+ is to sell Apple products, not to attract hundreds of millions of subscribers.

“Apple has always used content as marketing for its products,” Csathy said. “For Apple, the streaming service is just the means to the end – and the end is more sales of iPhones, Macs, Apple TVs, etc. As long as Apple TV+ screams quality , then it serves its purpose in Apple’s overall engine.”

Although streaming services generally provide limited metrics, Apple has been notably quiet since launching its video streaming platform in November 2019. Unlike many others in the space, the company does not disclose data financial performance, content spend, or subscriber count for individual shows or the service as a whole. (Even “Severance” executive producer Ben Stiller expressed frustration with Apple’s vague statistics.)

When Apple CEO Tim Cook is asked about the service, he usually points to nominations and awards, suggesting that’s the metric Apple uses to judge its success.

“In two and a half years since launch, Apple TV+ has now garnered 250 wins and over 1,100 nominations and counting,” Cook told analysts on an earnings call in July.

In June, Bernstein analyst Toni Sacconaghi estimated the service had between 20 million and 40 million subscribers and generated about $1 billion to $2 billion in annual revenue.. That would be a drop in the bucket compared to the company’s overall balance sheet, which totaled $366 billion in fiscal 2021.

Apple TV+’s spending on content is estimated to pale in comparison to competing streamers. Netflix is ​​expected to spend about $17 billion on content this year and Disney about $32 billion split between its media divisions. In contrast, Bernstein suggests that Apple spends just north of $3 billion, while Rayburn estimates the number to be between $1 billion and $2 billion.

These projections suggest that the service could lose money.

Dan Rayburn, a media and streaming analyst, noted that there was no clear data showing that Hollywood recognition translated into increased subscriber numbers. But for Apple, he noted that the math really doesn’t matter.

“If Apple TV+ gets 10 million subscribers, or if it gets 20 million subscribers, does that move the needle from a revenue standpoint? No.” said Rayburn. “They don’t even have to disclose it to Wall Street because it has no material impact on the business.”

— CNBC’s Kif Leswing contributed to this report.


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