62% of subscribers benefit from free offers

Apple said it wants to increase revenue from services, including Apple TV Plus, which is just over a year old. But new research suggests that the tech giant’s entry into the so-called “streaming wars” is at a distinct disadvantage to rivals.

In the fourth quarter, the majority of Apple TV Plus subscribers – a whopping 62% – said they were on the free promotional offer that Apple extended to buyers of its hardware devices, according to the research firm’s SVOD Tracker Q4 2020 report. Moffett Nathan. Worrying thing for Apple: 29% of those who said they did not intend to re-subscribe once the promotion period expired; only 30% said they wanted to renew at the regular price of $ 4.99 / month (and the rest weren’t sure).

In comparison, 16% of Disney Plus Users have claimed to access the service through Mouse House’s promotional partnership with Verizon. About 23% of HBO Max subscribers claimed to access the service through AT&T promotions that provide free access to customers with the best wireless, video, and telecom Internet plans (and for more expensive packages, HBO Max is included as a permanent benefit).

Nearly half of the Verizon promotion’s Disney Plus subscriptions (48%) said they plan to re-subscribe at the end of the free access period; only 19% say they have no intention of renewing. The data suggests that about 18% of Apple TV Plus subscribers plan to leave the service once their promotional offer ends, compared with 3% of Disney Plus customers with free plans, the MoffettNathanson report said.

Apple hasn’t disclosed how many users Apple TV Plus has. But he clearly doesn’t want to lose them: the company has extended the free access period for Apple TV Plus customers who signed up through its one-year free subscription offer until July 2021. The 12-month free Apple TV Plus remains available to customers who purchase a new iPhone, iPad, iPod Touch, Apple TV or Mac.

“We remain concerned about future subscriber abandonment if there is a slow device cycle and users choose not to renew themselves,” MoffettNathanson’s team, led by senior analyst Michael Nathanson, wrote in the report. Although Disney and WarnerMedia have been “clear on strengthening their respective content offerings, it appears Apple is not yet all-in on making the original Apple TV Plus a focal point.”

The story continues

A big problem for Apple TV Plus is its very limited range of content, compared to the thousands of titles available on other SVOD services. Currently, Apple TV Plus offers a total of 55 originals (11 drama series, six comic series, 13 non-fiction series, 11 movies, and 14 family and special series). These include breakouts like “The Morning Show” and “Ted Lasso”, but in terms of tonnage, Apple TV Plus falls far short of the rest of the SVOD camp.

Apple has a slate of originals in the pipeline, but it’s still not on par with Netflix, Disney Plus or HBO Max. Upcoming Apple TV Plus releases include the second season of Ronald D. Moore’s “For All Mankind” (Feb.19 ); is Anthony and Joe Russo’s “Cherry” with Tom Holland like a drug addict who resorts to bank robberies to pay off his debts (February 26).

Meanwhile, the percentage of U.S. consumers who reported using Apple TV Plus dropped from 10% in November 2020 to 8% in December, according to the MoffettNathanson report. In December, 72% of respondents said they use Netflix, followed by Amazon Prime Video (52%), Hulu (39%), Disney Plus (31%) and HBO Max (13%).

That said, for Apple, there is another strategy behind the SVOD game: to drive hardware sales by providing an incentive for consumers to buy its smartphones, tablets, computers or Apple TV set-tops. If the free Apple TV Plus benefit made even a small incremental difference in moving the needle there, it’s possible the company could rationalize the cost of investing in Apple TV Plus. Apple, in true Apple form, doesn’t offer a Native Android smartphone app (but claims you can use Chrome or Firefox on Android devices to stream Apple TV Plus); Google says the Apple TV app will arrive on the new Chromecast with Google TV in early 2021.

For the SVOD monitoring study, MoffettNathanson enlisted market research and consulting firm HarrisX to survey 19,435 respondents between October and December 2020.

Other findings from the MoffettNathanson / HarrisX study:

  • U.S. household streaming penetration was 77% at the end of 2020, up five percentage points year-over-year attributed to the country re-entering a self-quarantine phase this winter due to the COVID pandemic.

  • The average U.S. pay-TV family now subscribes to an average of 3.33 SVOD services, while homes without pay-TV subscribe an average of two. This “perhaps speaks to the impact of revenue on cable cutting, with pay TV houses being more willing / able to invest in more video products,” analysts at MoffettNathanson said.

  • When subscribers were asked to indicate what content they watched recently, 43% of Disney Plus customers cited the original series and 38% of Netflix and 34% of Amazon Prime Video customers said the same. Only 13% of Hulu subscribers reported that their recent viewing was original TV shows, and for HBO Max it was 12%. Meanwhile, 84% of Hulu and HBO Max customers said the acquired programming was what they watched most recently, compared to 56% for Netflix, 51% for Prime Video, and 49% for Disney Plus.

  • When asked why they use streaming services as a substitute for pay TV, at least half of subscribers with Hulu (50%), Amazon Prime Video (54%), Netflix (53%) and Disney Plus (52%) have said it was due to the cost of traditional cable and satellite TV. The second most reported reason for cutting the wire in favor of streaming services was convenience (12% -17%) followed by the availability of content (13% -14%), the ability to watch content uncontrollably (10 % -12%), and avoid advertising (4% -8%).

Via: finance.yahoo.com

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