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Analysts claim Apple and Amazon could 'destroy the streaming business'

Apple (AAPL) and Amazon (AMZN) have pumped billions into sports media rights over the past few months, outpacing their traditional competitors and taking the streaming war to the next level.

One Wall Street analyst believes the tech giant’s spending could cannibalize the streaming industry.

Laura Martin, Senior Media and Internet Analyst at Needham & Company, told Yahoo Finance Live: They can make a profit in other parts of the business that justify spending this money on sports rights.

Amazon and Apple have billions of dollars in cash on their balance sheets, so their return investment timelines, if any, are very different from broadcasters and other streamers like Netflix (NFLX). argued Martin in a recent memo. to the client. Apple and Amazon’s spending is focused on getting more people into the ecosystem’s various channels rather than being reimbursed directly through subscribers.

Apple recently spent $2.5 billion on MLS streaming rights and is reportedly in talks to spend at least $2.5 billion annually on the NFL Sunday Ticket.

And this fall, Amazon will enter the first season of its 11-year, $11 billion bet on sports streaming on the NFL’s Thursday Night Football. Google (GOOGL) and Amazon have also reached out to America’s biggest sports leagues for Sunday streaming rights as the international soccer and college football streaming battles rage on.

Led by traditional tech giants rather than streaming conglomerates, the latest round of NFL broadcast rights marks a significant shift in the streaming wars from broadband dominance to a Silicon Valley-led industry. Martin said Apple and Amazon would win the streaming wars because they have “virtually unlimited resources.”

“They don’t need to make money in the streaming business,” says Martin. “A lot of the time they’re doing these rights deals to drive iPhone sales, drive Prime sign-ups, etc. This doubles the average e-commerce sales he’s made.” because it happened.”

Disney (DIS), which owns ESPN, can also maintain its position as a player in the space due to its ability to market domestic brands, she said. From Disney characters like Cinderella to his ESPN importance in the sports world, the company is consumer savvy.

A man walks past the Amazon Prime Video logo during the launch event in Mumbai, India on April 28, 2022. REUTERS/Francis Mascarenhas

In addition to Hulu, which offers a binge-worthy product similar to Netflix, Disney can combine three services into one with its combination of ESPN+, Disney+, and Hulu. Analysts have told Yahoo Finance in the past that ESPN+’s looming price hike is likely to bring more bundled subscribers.

According to Martin, the bundled package could be a positive catalyst for Disney.

“Part of their case is that they can bundle,” she said. Because they see what they want to see, they turn off the service or sign up for another to see what they want to see for the month. Churn will kill you. It’s great. When it comes to The Walt Disney Company, it’s got a sister company.”

Josh is a reporter and producer at Yahoo Finance.

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