How Apple’s (NASDAQ: AAPL) entertainment moves could move the needle
Apple (NASDAQ: AAPL) wants to expand its current bet on the auto racing industry, as moviegoers have flocked to its production of F1 The Movie. That’s its highest-revenue film, after other movies and shows failed to generate the same popularity.
Now the diversified tech giant wants to expand its sports offerings via Apple TV+ streaming service and is in discussions to buy the rights to screen Formula 1 races in the U.S., according to sources cited by the Financial Times.
Apple could emerge as a contender in the streaming business, after some of its previous original content gained traction only among a niche audience. The company could compete more directly with companies such as Netflix (NASDAQ: NFLX) and ESPN. The latter, of course, is owned by Disney (NYSE:DIS) and currently has the rights to broadcast F1 in the U.S. That contract is available in 2026.
Apple wants to take its latest success to the next level by offering more sports content. The racing industry has increased prominence with the launch of F1 The Movie. The film stars Brad Pitt as a retired driver who returns to help a team from collapse. The movie, released June 27, already has generated $300 million at theatres.
While Netflix started the car-racing content with its Drive to Survive documentary series, Apple had $28 billion in cash as of March 29, 2025. So it can easily make large investments and sign additional sports deals for its streaming division.
Apple has built its live sports streaming over the past few years, inking a deal with Major League Baseball in 2022 for Friday night games, and signed a broader deal with North America’s Major League Soccer.
Streaming F1 races could be lucrative, as ESPN currently rakes in about $85 million a year from them. The next deal that F1 signs for U.S. rights could yield $121 million, according to Citi analysts. That number could rise with the success of the F1 film.
Interest in watching F1 races has risen exponentially over the past several years. The number of viewers per F1 race totaled 1.1 million in 2024, double the 2018 total. Liberty Media started its contract of showing Formula 1 races in 2018.
Investors have lost enthusiasm for Apple, with its stock sliding 10% over the past six months. Meanwhile Netflix, which has the largest streaming service with over 300 million paid memberships, has seen its stock rise 47.2% during the past six months. Apple’s price-earnings ratio is 32.93, while Netflix is at 58.4.
Despite Apple’s $20 billion investment in original content for Apple TV+, the platform has garnered only 25 million subscribers, capturing just 0.3% of U.S. screen-viewing time in June 2024, according to Nielsen. That trails Netflix, Hulu, Disney+, Comcast’s (NASDAQ: CMCSA) Peacock, Paramount Global’s (NASDAQ: PARA) Paramount+, and sports streaming services like ESPN. Apple TV+ prioritizes premium content over volume, resulting in a reputation for superior quality but limiting its subscriber base compared to Netflix’s quantity-driven approach.
Shifting its strategy to slightly sacrifice quality for greater content volume, particularly by incorporating more live sports programming, could significantly boost Apple TV+’s subscriber numbers and market share. This move aligns with consumer trends of utilizing smartphones and other video devices longer, increasing reliance on streaming for entertainment. Expanding content variety could position Apple TV+ as a stronger competitor to Netflix, leveraging its high-quality foundation to attract a broader audience.
Apple’s hardware, like the Apple TV 4K with its A15 Bionic chip, further supports this strategy. It integrates services like FaceTime with popular streaming apps, enhancing user experience within its ecosystem. By balancing quality with a more diverse content library, Apple could achieve meaningful subscriber growth and compete more effectively with industry leaders like Netflix.
