How Will Apple TV+ Shake Up Netflix? Analysts Are Split

Variety | 3/26/2019 | Todd Spangler
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Is Apple’s star-fueled streaming service a “Netflix killer” — or just another incremental challenger chasing the market leader? Wall Street don’t agree on whether Apple TV+ will put a big dent in Netflix’s subscriber momentum with the debut of its premium subscription VOD service later this year.

At its splashy unveiling Monday, Apple trotted out a host of Hollywood boldface-name partners, including Oprah, Steven Spielberg, Jennifer Aniston, Reese Witherspoon, Steve Carell, J.J. Abrams and Sesame Street’s Big Bird, who talked about their projects for the forthcoming streaming service.

Challenge - Impact - Apple - TV+ - Company

A big challenge in assessing the impact of Apple TV+ is that the company left key questions unanswered: namely, what it cost and what exactly is going to be in the package. The streaming service is slated to debut in the fall of 2019 in over 100 countries.

Some expect a seismic jolt. “Apple Poisons Netflix” was the title of the research note by Needham & Co. analyst Laura Martin, pointing to Apple’s estimated $2 billion content budget for original entertainment, its high-wattage creative partners and strong brand.

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Netflix “has an inferior competitive position to [Apple] over time, as we see it, in both: a) customer acquisition costs; and b) content costs,” Martin argued in her analysis. Apple has “zero consumer acquisition costs,” assuming it will first target its captive 900 million global user base, she wrote. Meanwhile, Apple’s content costs will be offset by the revenue share of subscriptions it will sell through the Apple Channels storefront for HBO, Showtime, Starz and others.

Apple - Ability - TV - Games - News

Moreover, Apple has the ability to bundle together TV, games, news, and music subscriptions with new iPhone sales, Martin continued. Assuming the tech company prices its three new services (TV, games and news) at $10 per month each and it gets...
(Excerpt) Read more at: Variety
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