Eddy Cue, senior vice president of Apple’s $76 billion USD Services segment, is looking to branch out the tech company’s streaming and advertising businesses to allow them to better realize their growth potential, and has already started making executive leadership changes to that effect — reports Business Insider.
Apple last month reported a fiscal second quarter revenue of $19.8 billion USD from its Services segment, which covers the App Store, Apple Music, iCloud, AppleCare, Apple Pay, Apple News, Apple TV+, and advertising. The company also revealed it had 825 million paying subscribers across the globe.
A source who has spoken directly with Cue said the SVP is looking at ways to achieve Services growth by revamping the segment’s management structure and pushing harder into high-potential areas like streaming and advertising.
Apple recently bagged the picture Oscar for the $25 million Apple TV+ Original movie CODA, and the platform has also made headway in sports streaming after obtaining exclusive broadcast rights for Major League Baseball’s “Friday Night Baseball.”
The iPhone maker is looking to significantly bolster its sports streaming portfolio and is ready to spend billions over the next four years for rights to live sports content.
Cupertino has been seeking a multi-billion dollar media and broadcasting deal with the National Football League, and the company may have already reached an agreement for rights to the NFL’s Sunday Ticket package. Apple may also make a play for NBA content when rights become available.
The tech pioneer could monetize its sports streaming portfolio with new subscribers, additional subscriber revenue from add-on sports packages, and advertising revenue. Apple has already started selling TV-like advertisement blocks for its MLB coverage.
Business Insider‘s sources said Cue has relieved Peter Stern, Apple’s sports portfolio lead and vice president of Services, of his advertising responsibilities to have him more focused on the Cupertino, California-based tech giant’s push into sports streaming.
Stern’s advertising responsibilities were handed over to Todd Teresi, a vice president who has looked after Apple’s advertising business for over a decade and was promoted at the start of this year. Teresi now reports directly to Cue.
“The Services portfolio is too big now, with too many other growing segments. The ad business is big enough to live on its own,” said one source.
According to research firm Omdia’s principal analyst Matthew Bailey, revenue from Apple’s search ads, the largest source of the company’s advertising income, grew 238% year over year to $3.7 billion in 2021.
Much of the growth is a result of Apple’s recent privacy update, which introduced the ‘AppTrackingTransparency’ framework to require developers to ask users for permission to track their activity across other apps, leading to advertisers shifting more of their spending to Apple’s ad services. Omdia expects Apple’s search ad revenue to hit $5.5 billion in 2022.