Why Apple Is Paying For Messi

Apple is the company of disruption. The personal computer, the music industry  or the thing you watch this video on. When Apple decides to enter an industry,  it is likely to change forever. And their next target industry is going to be  an interesting one: Apple is entering sports. They are buying broadcasting rights, produce high-end series and even  considered bidding for Man Utd! It’s all part of a bigger  plan. To build a SportsOS. Welcome to Athletic Interest. In this video,  we’ll break d

own Apple’s strategy and how it could soon disrupt the whole sports industry. Apple is the most valuable company in the world. It was the first ever to reach  a valuation of three trillion dollars. That’s more than the GDP of France, one  of the biggest economies in the world. Apple has so much cash lying around, they could  buy Adidas - twice. Without having to take a loan. We could continue the list but you  get the point. Apple is massive. But their business model used to be quite simple. Sel

l high-quality tech devices at  a premium price to people around the world who want to feel different. Mix  that with strong marketing strategies and innovative product design and BAM,  you’re worth trillions of dollars. OK, maybe it’s not that easy. Apple has mastered  one thing better than any other company: creating an ecosystem. If you have an iPhone, you will  likely own a MacBook - maybe even an Apple watch. Or at least those are the first options you look  at when buying a new gadget. And

that’s by design. Apple’s products are built to work together  seamlessly, as an interconnected system. For example, when you download an app on your iPhone  it is automatically also added to your iPad. It means that once you are locked into the Apple  world, it is likely you are not getting out soon. Some call it a ‘Walled Garden.’ Very pretty  on the inside, but very difficult to leave. The more Apple products you have, the more  likely you are to buy more. Sometimes to a ridiculous extent. H

ow about these  Apple wheels for only 700 dollars? There are pros and cons for the user, but  for Apple’s bottom line, it’s a genius strategy. It creates brand loyalty, encourages  customers to buy more products and provides recurring revenue streams. All in all, the Apple  ecosystem might be the company’s strongest USP. But not all products of the ecosystem are equal. More than half of Apple’s revenue comes  from just one single product: the iPhone! On the one hand, it is very impressive to bui

ld the biggest company of all time  almost entirely on one product. But it also means that Apple is incredibly  dependent on that single product. What if one day people stop buying the iPhone?  Well, that’s exactly what’s happening. iPhone sales are stagnating. And in capitalism,  if you’re not growing, you’re dying. So Apple has a serious problem. But Tim Cook has a plan - and as we’ll soon find  out, Sport is a big part of it. After the iPhone, the second biggest  revenue driver is the service

division. While the first version of the ecosystem was  designed to keep putting new devices in your hands, the ecosystem 2.0 is more focused  on improving the services on those devices. iCloud, Apple Music, or Apple Fitness. The more  devices you own, the better these services become. And that’s good for Apple’s balance sheet.  Services are a growing part of the core business. And even better: they produce more than  double the profit of traditional iPhone sales. So Apple’s focus is shifting.

More than  ever, Apple wants to sell people constant, ongoing subscriptions for things  they can do on their phones. Soon, you will be woken up by your Homepod, before  asking siri to turn on your coffee machine. You will then read the news on your iPad, before  taking your Apple driverless car to the doctor, where they give you a diagnosis based on the  data from your apple watch. Then you go home, unlock your Apple smart Lock, and watch the latest  Apple movie with popcorn bought using Apple P

ay. In this 1984-like scenario, there’s already  a hint to the core of the strategy. What’s the main reason for buying a subscription? Almost everyone has some kind of content subscription. Spotify, Netflix, YouTube Premium.  OR you pay to watch your favorite football league. Live sport is the ultimate media property.  95 of the top TV events of 2021 were sports. Which is why broadcasting  rights are incredibly expensive. But what makes sport as a  media product so valuable? We can break it down

into three reasons. Demand. There are billions of sports fans  around the globe. And they follow their sport to wherever it’s shown. Just ask  Amazon. They saw a massive (35%) increase in viewership for their prime service when  they started showing Premier League games. Even better: the demand remains  stable. Because there is always… Supply. There is always a next match.  And then there is always a next season. Think about that from the entertainment industry’s  point of view. Content that ca

n be expanded into sequels and spin-offs is always more valuable.  Titanic was a historic box-office success with more than 2 billion dollars worldwide. But  it’s difficult to expand into a franchise, given the finality of the ending. Star Wars or Harry Potter make billions by selling toys, video games and building  whole theme parks based on their universe. Sport can do exactly that - and more. It’s  like a series that never gets canceled and will always be watched. And even when the  live-acti

on is over, there is more. Series like Ted Lasso are the perfect addition to build  hype, bridge the off-season for bored fans, and draw them into the ecosystem. But live sport is  even better than series because it has built-in… Exclusivity. When Apple purchased the  rights for the MLS, they ensured that no one else can show the games. Any MLS  fan has no choice but to go to Apple. This is where Apple has  decided to think different. Apple signed a 10-year, 2.5 billion  dollar deal to secure th

e rights for the MLS. That’s more than four times  the worth of the previous deal - so some experts said that Apple overpaid for a  league without global fame and star power. So what’s their plan? Apple executive Eddy Cue is actually a huge sports fan - but thinks that the current system  is broken and that Apple can make it a lot better. While tech has evolved so many areas of our lives, the viewing experience got better in  some ways but much worse in others. Watching your favorite team can be

incredibly  expensive. Most leagues split their games across multiple TV and streaming platforms. This  forces fans to buy several expensive subscriptions and leads to a hassle when you try to find out  exactly where your team’s game will be streamed. Apple wants to change that - and prove that  football can be the sport of streaming. Apple’s Season Pass is their vision of how  modern sports should look like. Every game, available when and wherever you want  in a high-quality stream together wi

th additional video content and stats  around your favorite team - all in one place. And connected to other Apple  services like Apple News and Apple Music. Basically, the idea is to give people what they  want, when they want it, in the form they want it in, at a reasonable price and they’re more likely  to pay for it rather than illegally stream it. It might sound simple but the greatest innovations  are often genius because of their simplicity. What’s important to understand about  Apple’s st

rategy is that it is not just about adding a new revenue stream from  people paying for subscriptions. It’s just as much about those people being drawn into  the Apple ecosystem to buy more gadgets. This means trouble for traditional  media companies - and could have huge consequences for athletes, teams  and the sports industry as a whole. Apple has much deeper pockets than  traditional broadcasters who rely on getting back the money they spent  on sports rights through subscriptions and ads. A

pple has another way to  monetize the fans: their ecosystem. That means Apple might be willing to spend  much more for sports rights than traditional media companies. The increased competition  from big techs like Apple and Amazon - and their desire to produce original  content - will drive up the prices. That money will trickle down to  the leagues, teams and athletes. And that’s just considering broadcasting rights. What if big tech starts investing  directly in leagues or teams? It’s still a

far-fetched scenario, but just  imagine Apple taking over a Premier League club. All of the sudden there would be a massive  new player on the market, a counterpart to the investments from the middle east. One who not only has big pockets but tech know-how that could potentially lead  to completely new innovations and change the way we watch the game - or they will  simply launch a new football with a ‘pro’ version that costs twice as much but  it has a better camera and face ID. TV broadcasters

and the explosion of media rights values have changed football at  the beginning of the century. The next revolution might be ahead,  this time fueled by big tech.