Apple TV+ Can’t Win

By Douglas A. McIntyre Published May 25, 6:55AM EDT

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If a predicted Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) takeover of MGM occurs, the e-commerce and cloud giant will add a massive film and TV library to an already streaming, industry-leading content trove. It also will cement Amazon’s spot at the top of the streaming media industry, where it sits with Netflix Inc. (NASDAQ: NFLX). This and other recent changes in the industry leave Apple TV+ far back in the pack of streaming services, and in a position from which it cannot recover.

The measures of how many subscribers each of the leading services have are not completely compatible because the companies that own them report figures based on slightly different metrics. Netflix, without question, has over 200 million customers between its international and domestic businesses. Amazon has slightly fewer. Each reports its figures by quarter. Netflix has built an extraordinary library of both older films and TV shows and more recently added ones it has produced itself. Its annual investment in original content is as big as the budget of any traditional studio.

Amazon’s investment in original content is at the same level as Netflix’s, as is its production of new programs. And its library is about to get a huge boost.

Disney+, one of the fastest-growing services, has just over 100 million subscribers. Walt Disney Co. (NYSE: DIS) also owns Hulu, which has another 41 million. Disney’s library is its strength. It includes Disney’s films and the movies from the Star Wars, Pixar and Marvel franchises. Management expects the hockey stick growth to continue.
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HBO Max, part of WarnerMedia, has just over 44 million subscribers. A new transaction to marry WarnerMedia with Discovery puts the HBO Max streaming service under the same roof as CNN, TBS, TNT, HGTV, Food Network, Discovery Channel and Discovery+. While these services are not in the top tier based on subscribers currently, the combined libraries and brands give them a chance to be.

Peacock, the NBCUniversal streaming service, likely has over 30 million subscribers. Its library may not be as impressive as those of some of its competitors. However, both the NBC and Universal film studio businesses have large vaults of content. Paramount+ includes the video assets of CBS and Viacom. Once again, the service is not large, with just over 30 million subscribers. It also has an impressive library of TV shows and films released over the decades by Universal.

Apple TV+ also has about 30 million subscribers. Most of these are due to Apple Inc.’s (NASDAQ: AAPL) relationships with customers through its Macs, iPhones and iPads, which means over a billion people. Customers can get Apple TV+ free for a year with the purchase of many Apple devices. This clouds how many paid subscribers Apple TV+ really has. Apple’s major disadvantage is that its library is extremely thin. Even if it spends money on original content at the Netflix or Amazon level, it will take years to catch up. Apple is not making that kind of investment, or even close.

Apple has been reluctant to drop out of businesses it has launched with great fanfare. However, for Apple TV+, the battle to get anywhere near the top tier of streaming services is already lost. The field is too crowded, and Apple does not have the key ingredient of a major library. The Amazon deal with MGM only makes that more apparent.
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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.