When Apple (AAPL) TV+ first launched in November at an attractive $4.99 per month, there was a belief that it could overcome its initial slate of lackluster content by sheer market penetration. Outside of the excellent Little America, the streamer’s initial roster of original programming didn’t demand viewer attention despite a collection of A-list names. But with Apple TV+ available on more than 1 billion worldwide devices and with a free 12-month subscription given to consumers who purchased a new Apple device, there was a hope that the ease of access would help launch the service to success. That has not yet been the case.
Apple TV+ sits just 12th on the latest American Customer Satisfaction Index report among streaming services. That’s well behind established incumbents such as Netflix (NFLX), Hulu, Amazon (AMZN) Prime Video and YouTube as well as newcomers and less heralded competition such as Disney+, CBS All Access, Starz and Twitch. (Disney+ actually dethroned Netflix for the top spot). In January, Apple CEO Tim Cook declined to provide subscriber numbers or growth data as other streaming services customarily do, opting instead to simply say that the platform is “off to a rousing start.” Curious.
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Unlike its primary rivals, Apple TV+ launched with a complete reliance on exclusive new original programming. Jennifer Aniston and Reese Witherspoon’s splashy drama The Morning Show was meant to carry the service as a flagship series. Instead, the $300 million expenditure was met with lukewarm reviews. Chris Evans’ recent miniseries Defending Jacob was the first Apple series to crack the top-10 in Parrot Analytics’ monthly streaming demand rankings. Thus far, Apple TV+ has yet to deliver a blockbuster series widely embraced by the mainstream similar to Netflix’s Stranger Things or HBO’s Game of Thrones.
“There’s nothing particularly ‘plus’ about Apple TV+,” ACSI Managing Director David VanAmburg said, per Forbes.
While exclusive original programming helps to attract new subscribers, it its attractive legacy content that helps to retain an existing customer base. That is why massive bidding wars have broken out over long-running sitcoms and classic dramas. Apple TV+ is completely bereft of such catalogue content, a strategy that stands in stark opposition to Disney+’s primary attraction: high profile blockbuster IP. Disney has leveraged its Marvel, Pixar, Star Wars and Fox library to survive an early drought of top-tier original programming outside of The Mandalorian.
Apple TV+ appears to be in the process of course correcting, however, as the deep pocketed company is reportedly aggressively pursuing a library of pre-existing films and TV series from other studios. The tech company is a popular selection when rumors of an MGM sale bubble up and recently spent upwards of $70 million to acquire Tom Hanks’ World War II naval drama Greyhound. The streamer also struck a unique hybrid deal with Paramount Pictures to finance Martin Scorsese’s $200 million Western Killers of the Flower Moon, starring Leonardo DiCaprio and Robert De Niro.
The streamer’s pivot makes sense. The recent launches of Quibi and HBO Max, not to mention Peacock (CMCSA)’s looming entry in the increasingly crowded streaming field, are making it exceedingly difficult for a platform to cut through the clutter. Three-quarters (76%) of people pay for just three or fewer streaming services, according to a new survey report from Visual Objects. The survey found that half (50%) of people pay for two to three streaming services and one quarter (26%) pay for one, while only 16% invest in more than three.
The proliferation of streaming services is likely expediting the exodus of pay-TV customers, thus creating a bigger pool of potential new subscribers for the streaming industry. Yet with Netflix, Disney+, Amazon Prime Video and Hulu already claiming such a significant marketshare, it won’t be easy for the rest of the field to make up lost ground.
