Why Apple’s Streaming Service is a Bad Idea, and Why Disney+ Will Succeed

In Featured, Industry Insights, Katherine Sanderson by Amanda ValdovinosLeave a Comment

– By Katherine Sanderson –

On March 25th, Apple had a presentation where they officially announced that they are launching their own streaming site called Apple TV + (which was already a rip-off of Disney’s upcoming streaming service name). With each having a release date set for Fall 2019, we will see two major streaming sites go head to head, striving to either convert Netflix die-hards, or convince them that their platform is a worthy add-on. Each has their strengths, but in short, Disney’s business model is most likely to succeed, and Apple will truly have to prove itself in the arena of streaming services to find success.

Here are five reasons Disney+ will succeed, while Apple TV+ will most likely fail:

1. Reasons for Launching Streaming Service
Apple

A decade ago, when Apple was in its prime, the company relied on the new products, under the leadership of the late Steve Jobs, which included their revolutionary devices like the iPod, iPhones, iPads, Apple watches, etc. They initially created services, namely iTunes and the App store, to support the sale of these products. But now that the world has embraced their devices (and are holding onto those devices for longer than Apple anticipated) that stream of revenue has slowed dramatically, and they are now looking to rely on the recurring revenue of streaming site subscriptions. With approximately 900 million active iPhones in use worldwide, they are hoping that their users will greet their streaming service. But despite hiring entertainment industry veterans to head their new service, this isn’t Apple’s comfort area. They’re scrambling, and it shows.

Disney

For the last decade, Disney was licensing their content to Netflix, which included classic Disney animated features, Star Wars films, and all the films from the Marvel cinematic universe. With the recent closing of their acquisition of Fox, Disney is an unstoppable powerhouse (even as an employee of another major studio, I have to admit it!) and they want to create their own platform, to get rid of the middleman, and monetize their valuable library. To power the services, Disney has purchased a majority ownership of BAM Tech for over $3 billion. They’re not desperate. They just want to flex their power, and keep both content and distribution in house.

2. Branding and Company Culture
Apple

Apple has built their brand on appealing to a broad global audience, creating devices that everyone can use. For nearly a decade, they had focused on a single product each year.

In Apple’s corporate vision statement, they state “We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us.” The problem with this is that the content industry is built on making a slate of varied content from different genres. In the industry, you can’t just select a few projects that you’re confident in, because very often, audiences will not agree with your limited selection. Although Apple is rumoured to be spending over a billion dollars on content (which is no small amount!) comparing that to Netflix’s content budget last year of $12 billion, they might not be able to compete. But here’s hoping that Apple truly is as good as they think they are, and have indeed selected the best of the best!

Disney

Disney’s brand has been and will always be ‘family-friendly’. They have made it clear that like Apple, they do not want to compete with Netflix, but offer a cheaper subscription model ($6 or less) with less content, but that features their worldwide beloved brands.

When people subscribe to Disney+, they will see it as a monthly purchase of the properties they already know and love. With their VHS and DVDs becoming obsolete, this will allow them to keep their animated favorites and superhero flicks always accessible.

3. Pricing
Apple

Although Apple has still not released their pricing, may analysts predict that it will exceed even the established streaming sites like Netflix and Hulu, possibly reaching $15 per month.  While we do await the actual price, we can expect that the monthly subscription will be at least $9, making this streaming service an equal investment to the major streamers (which many consumers are not going to be ready to do based on an unknown library of content). With many viewers trying to avoid the costs of a cable subscription, many may not be willing to pay for two or three streaming platforms all costing over $10 per month.

Disney

Disney has also not officially announced a price, but Disney CEO Bob Iger suggested last year that their streaming service will cost notably less than Netflix, leading analysts to estimate $5 or $6 per month. This will play very well for Disney, as many consumers will see this as a reasonable add-on to their Netflix or Hulu subscriptions.

4. Original Content
Apple

Along with the announcement of Apple TV+, they also announced the new original content they plan to offer along with the site, which insiders expect cost them well over $1 billion. In all honesty, this may be their saving grace (as they do have top talent both in front of and behind the camera), but given the limited selection, this could also easily be their downfall.

Their new content includes:

Amazing Stories (TV Series)
Produced by Steven Spielberg

The Morning Show (Comedy/Drama TV Series)
Starring Steve Carrell, Reese Witherspoon, and Jennifer Aniston

See (Sci-Fi TV Series)
Starring Jason Momoa and Alfre Woodard

Central Park (Animated Comedy Series)
Starring Josh Gad, Kristen Bell, Stanley Tucci, Leslie Odom Jr., and Daveed Diggs

My Glory Was I Had Such Friends (Drama Series)
Created by J.J. Abrams and starring Jennifer Garner

*Complete list of new Apple content here

Disney

Disney, on the other hand – according to reports, they have spent and plan to spend around $500 million on original content (which is nothing to scoff at, but at least half of what Apple is spending), but as we’ll talk about in the next section… Disney has a lot more content in its library to start with.

Their new content includes:

Lady and the Tramp (Live-Action film)

Marvel’s Loki TV Series
Starring Tom Hiddleston

Marvel’s Scarlett Witch and Vision TV series
Starring Elizabeth Olsen and Paul Bettany

Star Wars: The Mandalorian (TV series)

Star Wars: Rogue One prequel (TV series)
starring Diego Luna

High Fidelity (TV Series)
Starring Zoe Kravitz

High School Musical: The Musical (TV series)

*Complete list of new Disney content here

5. Established Content
Apple

The unfortunate reality for Apple is that modern audiences are loyal to established franchises, NOT to A-list stars.

Box office numbers have proved that creating blockbusters based around talent like previously bankable stars like Will Smith or Brad Pitt do not succeed like they used to, and that goes for television as well. Unlike Disney, Apple cannot fall back on a library of content and established franchises (and this is why they may ultimately suffer).

According to reports, up to the week before their initial presentation, Apple had been courting top pay-TV services such as HBO, Starz, and Showtime, to populate their new service with established tv shows and films, or offer add-on subscriptions.

Disney

Disney has said to expect 5,000-7,000 tv episodes (probably many from Disney’s ABC network), and about 500 films from its catalog, including Disney Animation, Pixar, and Marvel films (although the first six Star Wars films will not be included until at least 2024, as Turner bought the rights in 2016, and their deal won’t expire until then).

Also, with their live-action remakes such as Dumbo, Aladdin and The Lion King, although technically new content, these are all based on established brands, and following a theatrical release, will only be available to view on Disney+.

Conclusion

By the end of the year, we will begin to see which of these two streaming services will intrigue consumers the most to purchase subscriptions. Apple’s slate of new content is enviable, with what seems to be profitable combination of great talent and compelling stories. But will it be enough? Only time will tell. Meanwhile, I think there is a mouse who is going to be bringing in a lot of money come early 2020.


About the Author

Katherine Sanderson currently resides in Los Angeles, CA. Originally from Colorado, she graduated with a BA in English from Santa Clara University in 2014, and is an alumna of the JPCatholic MBA program (Class of 2016). Her professional aspirations are in children/family entertainment, especially animation.

For more articles by Katherine, click here.

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