With just two years left in DIRECTV (NASDAQ:DTV)’s contract, the National Football League can start shopping around the digital rights to Sunday games. There has been a lot of talk that Google Inc (NASDAQ:GOOG) might want to buy those rights to set itself up as a premium content provider, but now David Goldman at CNN Money thinks Apple Inc. (NASDAQ:AAPL) should spend some of the money it has lying around to start broadcasting football games.
Apple could make money on professional football
Apple Inc. (NASDAQ:AAPL) already airs other sports including baseball, hockey, and basketball, but professional football is the most popular sport in America and people are more than willing to spend money to watch. DIRECTV (NASDAQ:DTV)’s Sunday Ticket package has two million subscribers dropping a couple hundred dollars each, and with alternative cost structures there’s plenty of room for the number of subscribers to grow. DirecTV is paying $1 billion per year for exclusive access to the games, and Apple Inc. (NASDAQ:AAPL) might not turn a profit if it has to pay the same or more, but that’s not really the point.
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Google streaming NFL games on YouTube
Having exclusive access to NFL games sells the platform, whether its DIRECTV (NASDAQ:DTV) or Apple TV, and once people have the platform they are likely to use it for other services as well. Some people have seriously considered the idea that Google Inc (NASDAQ:GOOG) should stream NFL games for free on Youtube (assuming they buy the digital rights, of course) just to shore up their website’s position in the market. That’s probably not a great use of $1 billion, but selling a few million Apple TVs and making deals with other big content providers could be exactly what Apple needs to make headway into television.
If Apple Inc. (NASDAQ:AAPL) does go down this path (and they haven’t made any indication that they will), they wouldn’t be the first to spend money on content to strengthen the platform. Netflix, Inc. (NASDAQ:NFLX) has been producing original shows including Arrested Development, House of Cards, and Orange is the New Black to boost subscriptions. When pressed about the shows’ impact during an earning conference call last quarter, Netflix execs admitted that it was hard to quantify the effects, but they believed that original content helped build relationships and retain existing customers better than licensing alone.