Apple has been in early talks to possibly buy MGM Holdings and an equity stake in the Pac-12 Networks, The Wall Street Journal reported Thursday. The deals could bring important live and on-demand content to grow Apple’s TV+ streaming service.
MGM deal could be worth billions
Sources said discussions with MGM Holdings could include parts or all of the company. Some of its major entities include MGM Studios, MGM Television and the Epix movie channels. The MGM Studios include a huge library of movies numbering into the thousands that could become part of a streaming offering on the Apple TV+ service.
The meetings with MGM included Apple’s head of mergers and acquisitions, Adrian Perica, according to people familiar with the matter. The discussion came as MGM sought a distribution partner in February for its Epix cable channel.
Pac-12 talks could be Apple’s first move into live sports
According to The Wall Street Journal report, Apple executive Eddy Cue also has met with representatives of the Pac-12 conference about its effort to sell an equity stake in its media rights package, valued at up to $5 billion.
Sources said Cue questioned the real value of adding sports content to Apple’s streaming service. “He also recognized that if Apple ever secured rights to all of the conference’s best programming, it would need to show some of those games on traditional, broadcast TV to satisfy fans,” the news organization reported.
Apple thinking ‘outside the box’
Despite Apple concentrating its streaming TV service on original content, sources say the “preliminary” conversations show the company’s willingness to branch outside its current strategy. The addition of sports and movie content that it owned could create unique offerings that are more than just streaming live channels found on services like Sling TV and Hulu with Live TV.
If deals were reached, sources say the strategy would be like that of the Amazon Prime Video service, offering individual subscription packages to customers similar to channels like Starz, Showtime and CBS All Access.
Currently, Apple TV+ at $4.99 a month, offers nine original programs and separately sells subscriptions to services like HBO, Disney+ and CBS All Access. The service launched in November of this year.
Subscriptions a major Apple revenue strategy
Apple has made it known that much of its future revenue will concentrate on subscription services for video games, news and TV. Paid subscriptions have become a big contributor to the company’s bottom line. Apple’s services business increased sales 17% to $46.29 billion during the fiscal year that ended in September from the prior fiscal year.
Apple wants to surpass 500 million paid subscriptions next year. It currently has 450 million paid subscriptions, a 36% increase from the 330 million it reported in 2018.