Apple has officially announced that it will now be sponsoring the Super Bowl halftime show, replacing Pepsi. What does this tell us about the tech giant's sports ambitions? Cheddar News analyzes Apple's latest move.

Apple Makes Big Play by Landing Rights to Super Bowl Halftime Show

the most anticipated sports match up on Tv tonight between the Yankees and the red sox will exclusively stream on apple tv plus. Meanwhile on football, Apple music, replacing Pepsi as the sponsor of the NFL Super Bowl halftime show, The annual event that typically draws one of the biggest single Tv audiences of the year. So joining me now is Shadow News, senior reporter Michele Castelli. Oh Michelle, anytime I think of Apple Tv plus I think of my favorite show. Ted lasso what I love to go to so we can talk about that. I love that show. Um, and I'm still waiting on the third season but ted lasso aside, we gotta talk some real sports because the Yankees and the red Sox game, it's tonight could be a big win for Apple. What challenges though couldn't face as it does host and this anticipated matchup, you know, this is actually just luck of the draw for Apple. So you might remember back earlier this year, Apple and the MLB announced the deal that they were going to stream about two games of a doubleheader every friday. Um, and that was that deal was worth about $85 million a year. Peacock also did a similar deal for Sundays and the fact that judge is gonna hit his home run goal this time is just the luck of the draw for Apple. So it was bound to happen that they were going to get one of these marquee games. And so it really is interesting because they'll get the spotlight. The one challenging thing I think they're gonna face is people still haven't been able to switch over to watching on streaming platforms now, Apple's deal is great because it doesn't have any category restrictions about location. These games aren't geo fence based on locations, you can watch it wherever you want in eight different countries, but people still have to get used to turning on their apple tv plus to watch these games. I'm dealing with this battle in my own household for thursday night football. Now I talk all the time about how Prime video has got that deal for the next 11 years. My husband asked me every thursday that he can't find the game on tv and where is it airing? And it's always on prime video. So we're still seeing that audiences are going to have to adjust to the behavior of looking for a streaming service. It's going to take years. But that's the big challenge that Apple is going to face. A lot of people just aren't used to watching on streaming services yet, especially for these big marquee games. It is really bifurcated. And again, as a ted lasso fan, I know that the company Apple Right has invested quite heavily actually. I think it's in soccer leagues, but now clearly going all in on sports as well and to that end, Apple making headlines by taking over as the title sponsor of the Super Bowl halftime show. This seems huge, right? I mean absolutely huge. Do you think it makes sense? Well, you know, Pepsi already said that they weren't interested in renewing. I think they had the deal for about a day, decade and this deal has been shopped around for about $50 million for that title spot. And I actually think it makes more sense for Apple to be the sponsor of the halftime show than a consumer product brand. Like Pepsi, apple has valuable real estate to really market to people, especially for their apple music service. This is a way that they can use their connections in the music industry to put themselves ahead of a company like Spotify, There's already been rumors going around that Taylor Swift might be the halftime performer and it's not really that far fetched given that Taylor Swift has a new album coming out, She's done a lot of deals with Apple. So the idea that they can show that hey, we have all these connections in the music industry and also prove something for their service is something more than a lot of these category sponsors that have been more product base that have had in the past. So it's great to also promote their streaming services, their services and for Apple, this is just a really good marketing moment. I think it's a great deal for them to have this year and we'll see how it plays out. Yeah, I would be interested to see how it might change the Super Bowl halftime show. I remember, I think jay Z was recently named to the NFL to oversee the Super Bowl halftime show. So I'd be interested to know his potential involvement in connection with Apple here as well, if there is one. But let's talk about the value of this halftime show because we know from a marketing perspective, it is huge, right? Yes. Let's definitely talk about those Super Bowl ad prices now over the years, it has become more and more expensive to advertise on the Super Bowl because of the fact that it is one of the live events that people are tuning into still. So if we look over the last five years, we're seeing that the prices have steadily increased. There was a little dip in 2021. And Fox has already said for the Super Bowl next year that they're almost sold out and that ads are going for about $7 million for a 32nd spot. Now, what makes the halftime show in particular so lucrative is the fact that a lot of people tune in just for the halftime show. In fact last year, samba tv did run an analysis and they found out that 1.2 million viewers of the Super Bowl only tuned in during halftime and after, and that was an increase of over 40 per percent from the year before. So this is a really big draw. It puts Apple on center stage and in fact the top six commercials that aired during the Super Bowl, that in terms of viewers, according to Samba, they all aired around the halftime show. So this is just such valuable real estate and it's only going to become more and more important as audiences really don't tune into appointment viewing unless it is for a sports event. It is interesting because at the same time, you know, Pepsi giving up the rights after a decade. So do you think the Super Bowl just doesn't have the same draws used to? You know, I don't think it's the Super Bowl that doesn't have the same draw. I just think there's a lot of other places that you can advertise, including on social media and other streaming platforms, Let's not forget that Netflix and Disney Plus are going to add their ad offerings. That's just people diversifying their budgets at this time. Now, Pepsi might not be the title sponsor of the, the halftime show, but they are still a category sponsor of the Super Bowl, meaning that they will probably own all the soft drink ads for the most part in the series. Now, other companies like Anheuser Busch, they recently gave up their category sponsorships, which is why you started seeing more different alcohol brands advertised during the Super Bowl. So a lot of people I think are just diversifying their portfolio. But as I pointed out before with Fox saying that we're hitting a record $7 million for 30 seconds, there are plenty of people who still want to advertise in the Super Bowl and if that Pepsi box backs out, there is a company like Apple who's always willing to step in. So I guess my question Michelle is this is a lot of views, how does it translate to dollars for Apple? Does it sell apple products? I guess I don't see the direct connection per se. You know, I really think this is a big play for apple music particularly you know that their services industry has been growing pretty quickly. It's one of the fastest growing categories. It's not the leading revenue driver for apple by any means, but they are growing double digits. I think last earnings report, it was at about 21% growth year over years. So if they can get people to say, hey Apple is a really great place for music. They can beat out some of the leaders in this space like Spotify, I think that's a really good win for them now. Apple has that money that free cash flow to really invest in things like this and there is no greater stage for advertising than the Super Bowl, especially like a halftime show. So I think that's what the play is and of course of that services industry grows and people want to stay in that Apple family. The sales for iphones and other products are just going to follow. Alright. Tschetter news, senior reporter Michele Castelli, Oh Michelle, thank you for that report.