Apple TV+ Faces New Disney Challenge

By Douglas A. McIntyre Published Feb 12, 6:26AM EST

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Apple TV+ Faces New Disney Challenge — © Courtesy of Disney

Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) has grown far larger than Walt Disney Co. (NYSE: DIS), which was not true a decade ago. Apple makes billions of dollars a quarter. Disney has lost money in some quarters this past year. In terms of video streaming, however, Disney has become such a successful competitor to market leaders Netflix and Amazon Prime that Apple TV+ finds itself up against another streaming juggernaut.

Disney announced earnings that were better than expected, but most of its businesses continue to be staggered by the COVID-19 pandemic. Revenue plunged 22% to $16.3 billion. Net income dropped 99% to $29 million. Revenue from its parks business took the worst of it, down 56% to $3.6 billion.

Disney+ posted wildly successful figures. Its subscriber count jumped to 94.9 million from 26.5 million and sits at half the total subscriber count of Netflix worldwide. Apple TV+ wants to elbow its way into this business. Despite its balance sheet and brand, the Disney figures make that less likely.

Apple TV+ does not provide streaming subscriber numbers, but the figure has been estimated at 40 million. However, outsiders assume most of these are tethered to Apple device purchases that allow customers to get Apple TV+ free with new iPhones, iPads and Macs. Will they renew when they have to pay? If the past offers any example, probably not.
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Disney’s natural advantages derive from its library and that has all Disney, Pixar, Star Wars and Marvel films. Disney adds aggressively to that library every month. Apple TV+ has a much, much smaller set of programs, and the growth of its library has been modest. Its new programs are not usually as star-studded as those on Disney+, Netflix or Prime Video.

Another challenge to Apple comes from the theory that most households that get streaming media services will only subscribe to two or three. The established services have a foothold that is, in some cases, years old. Apple may need to nudge at least one of these aside to be successful.

Apple TV+ had its work cut out for it a year ago. With Disney’s latest news about Disney+, it just got harder.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.