Netflix says Apple TV+, others to accelerate transition away from traditional TV

Posted:
in iPod + iTunes + AppleTV edited October 2019
Netflix in a letter to investors released on Wednesday said new entrants into the streaming space, including Apple TV+, will help accelerate what it believes to be an inevitable shift away from traditional linear television.




The streaming industry stalwart says competition in the space is nothing new, with the likes of Amazon, Hulu and YouTube vying for customer attention for more than a decade. As Netflix notes in its letter (PDF link), all streaming services face a much larger competitor in traditional television, also referred to as linear TV, in most mature markets.

With the proliferation of mobile devices, as well as over-the-top services which provide enticing content at affordable prices, streaming companies are eroding linear TV marketshare at a steady rate. Netflix believes additional players in the space will accelerate the transition toward on-demand solutions.

"In our view, the likely outcome from the launch of these new services will be to accelerate the shift from linear TV to on demand consumption of entertainment," Netflix said.

Within the streaming industry, Netflix believes it is well suited to take on newcomers like Apple TV+ and Disney+, saying no upstart delivers the same level of diversity and quality offered through its catalog.

"The upcoming arrival of services like Disney+, Apple TV+, HBO Max, and Peacock is increased competition, but we are all small compared to linear TV. While the new competitors have some great titles (especially catalog titles), none have the variety, diversity and quality of new original programming that we are producing around the world," the company said.

That said, Netflix admits the onslaught of new services will be "noisy" and may generate "modest headwind" for near-term growth. On a long-term basis, however, the firm expects to continue to grow on the strength of its product and the large market opportunity presented by streaming as a whole.

Netflix beat Wall Street expectations for its most recent quarter with earnings per share of $1.47 against estimates of $1.04, reports CNBC. Revenues of $5.24 billion did not meet expectations of $5.25 billion and 517,000 domestic subscription additions fell far behind an expected 802,000 adds. Still, the strong EPS showing drove Netflix stock up more than 25% in after hours trading.

Apple TV+ is slated to launch on Nov. 1 for $4.99 a month, though customers who purchased an eligible device like a new iPhone, iPad or iPod get one year of free service. Apple's streaming alternative will debut with a complement of about ten shows, much less than catalogs on offer from Disney, HBO and NBC.

Comments

  • Reply 1 of 12
    What's keeping these services from carrying traditional broadcast (ABC, CBS, NBC (including local news); 24 Hour News, etc.) networks?

    And, why aren't they providing these? I think adoption would increase if people were able to watch programming from local affiliates ..  :/

    Also .. what about an option to watch programming from affiliates out of local markets?
    jahbladelolliverwatto_cobra
  • Reply 2 of 12
    Lara Croft 835Lara Croft 835 Posts: 6unconfirmed, member
    What's keeping these services from carrying traditional broadcast (ABC, CBS, NBC (including local news); 24 Hour News, etc.) networks?

    And, why aren't they providing these? I think adoption would increase if people were able to watch programming from local affiliates ..  :/

    Also .. what about an option to watch programming from affiliates out of local markets?
    Why ? you have other ways to view it. I for one look forward to content being on par with overseas, no geo blocking and Apple  and Disney will deliver it unlike Netflix which prohibits certain content between markets.
    watto_cobra
  • Reply 3 of 12
    mike1mike1 Posts: 3,313member
    What's keeping these services from carrying traditional broadcast (ABC, CBS, NBC (including local news); 24 Hour News, etc.) networks?

    And, why aren't they providing these? I think adoption would increase if people were able to watch programming from local affiliates ..  :/

    Also .. what about an option to watch programming from affiliates out of local markets?
    Why ? you have other ways to view it. I for one look forward to content being on par with overseas, no geo blocking and Apple  and Disney will deliver it unlike Netflix which prohibits certain content between markets.
    Ugh! Geo blocking, as you call it, exists simply because any given entity may not own the rights to distribute that particular content in a given country. It’s not a difficult concept to grasp. 
    beowulfschmidtkingofsomewherehot
  • Reply 4 of 12
    As long as there are sports, news and live events, traditional services won’t disappear. How you receive that content may change, but it will never disappear. 

    I for one, don’t care for streaming services like DTV Now, Hulu, PSVue, etc. the limitation of how many streams and then add on premium content and it’s not much cheaper.  

    The only reason I still have Netflix is because T-Mobile gives it to me for Free as part of my plan. I do have 2 young kids and a few shows do interest me on Apple TV+ so I will be most likely subscribing to Disney+ for the kids and Apple TV+ for my Wife and I. 
    lolliver
  • Reply 5 of 12
    StrangeDaysStrangeDays Posts: 12,930member
    mike1 said:
    What's keeping these services from carrying traditional broadcast (ABC, CBS, NBC (including local news); 24 Hour News, etc.) networks?

    And, why aren't they providing these? I think adoption would increase if people were able to watch programming from local affiliates ..  :/

    Also .. what about an option to watch programming from affiliates out of local markets?
    Why ? you have other ways to view it. I for one look forward to content being on par with overseas, no geo blocking and Apple  and Disney will deliver it unlike Netflix which prohibits certain content between markets.
    Ugh! Geo blocking, as you call it, exists simply because any given entity may not own the rights to distribute that particular content in a given country. It’s not a difficult concept to grasp. 
    Eh, nation by nation distribution licensing rights are more difficult a concept to grasp than the idea of one app, one audience. In an ideal universe once audience one app is sensical and nation by nation licensing agreements is not. 
    lolliverwatto_cobra
  • Reply 6 of 12
    All these new players based off mainly traditional Television, will definitely struggle.they have these huge libraries of that stuff that everyone has watched already. There’s no reason to pay for a service thats full of old stuff that’s been aired multiple times and to top it off in most cases has also been streamed on Netflix or Hulu repeatedly. 
    If u factor in that Netflix is so huge internationally and putting so much effort in delivering a diverse set of programming in most local international markets I don’t think even the likes of Disney can compete with Netflix’s scale. 
    The only way these new services can stay relevant is to deliver live Local News and Live Sports through their streaming services. 
    These are the only 2 things that Netflix lucks globally.
    when this happens, Netflix will be forced to buy a Live News broadcasting network most likely something international as opposed to a US based news network and maybe also buy some sporting rights around the world especially Soccer rights in places outside North America.
  • Reply 7 of 12
    mike1 said:
    What's keeping these services from carrying traditional broadcast (ABC, CBS, NBC (including local news); 24 Hour News, etc.) networks?

    And, why aren't they providing these? I think adoption would increase if people were able to watch programming from local affiliates ..  :/

    Also .. what about an option to watch programming from affiliates out of local markets?
    Why ? you have other ways to view it. I for one look forward to content being on par with overseas, no geo blocking and Apple  and Disney will deliver it unlike Netflix which prohibits certain content between markets.
    Ugh! Geo blocking, as you call it, exists simply because any given entity may not own the rights to distribute that particular content in a given country. It’s not a difficult concept to grasp. 
    Eh, nation by nation distribution licensing rights are more difficult a concept to grasp than the idea of one app, one audience. In an ideal universe once audience one app is sensical and nation by nation licensing agreements is not. 
    Depends on what the trade off is. If I have to pay a fortune to subscribe to Netflix because they've bought exclusive global rights to everything, I'm not going to sign up. It's annoying that I can't see the same as someone in another country might but I understand why content providers segment their markets geographically.
  • Reply 8 of 12
    "Netflix believes it is well suited to take on newcomers like Apple TV+ and Disney+, saying no upstart delivers the same level of diversity and quality offered through its catalog."
    This reads as a fearful denial as the Disney catalogue easily eclipses Netflix's offering in every relevant metric.
    However that alone is not the sole driver of subscriptions. Apple made significant inroads into the PC market with the iLife suite of apps because "what's the point of having millions of apps when the four you want are on the Mac."

    People will subscribe to the services which have the content they want to watch, so Netflix won't be suddenly eroded by new entrants, and for the most part they'll all have their well defined spaces.

    Where it will get interesting is the purchasing of new stories/IP. Since there will be significant competition here, and Apple is the only player in the market where acquisition spend is not directly tied to viability. Disney are also well placed as they are also IP creators - so they're not fully tied to acquiring new licenses.

    edited October 2019 kingofsomewherehotwatto_cobra
  • Reply 9 of 12
    MacProMacPro Posts: 19,776member
    The transition away from 20th century TV will accelerate once the companies such as CNN etc. stop asking for proof you also have a cable contract to allow streaming on 21st Century TV.
    watto_cobra
  • Reply 10 of 12

    I for one, don’t care for streaming services like DTV Now, Hulu, PSVue, etc. the limitation of how many streams and then add on premium content and it’s not much cheaper.  

    Oh I’m afraid I have to disagree. When we were on Comcast, our monthly bill was over $250. That gave us TV with no premium channels, home phone, and Internet that was capped at 1TB of data (which we actually bumped up against every month, largely because my wife and I work from home full-time), 300mb down and about 12mb up.

    We’ve now got gigabit fiber from our local telco (which gives us almost 900mb down *and* up, with no data cap) for $75 for life, Hulu Live (which also gives us their no-commercial streaming plan) for about $60, and Ooma Premium for our home phone which runs $15/month. Our total bill is now $100 less, the Internet is sooooo much better, the picture quality is better than we had with Comcast, plus we get the streaming content (which is great), and Ooma gives us more functionality than we had before (great telemarketing blocking, voicemails sent via email and text, two lines, an app that rings our mobiles when the home phone rings, and more).

    so for about 40% less than we were paying before, we get much better service. Plus, and best of all, the slimiest company in the history of the world is no longer getting a dime from us.
    watto_cobra
  • Reply 11 of 12
    AppleExposedAppleExposed Posts: 1,805unconfirmed, member
    ....Not this sh** again!

    Every.damn.time Apple enters a market the leader pretends it's all good then usually loses users.

    Rarely they do not. The Swiss industry lost tons of $ when they welcomed Apple and Pebble teased Apple before going belly-up. Sony did the same crap but more passive-aggressively and hasn't lost much users because Apple drug their feet with Apple TV gaming.
    watto_cobra
  • Reply 12 of 12
    The headline is, i think, accurate... Its been a couple years, but i already dropped "cable TV" in favor of streaming TV (via Hulu in my case)... still get local channels... pretty much the same service for the same price, but better reliability.  And I have several neighbors that have done the same recently.
    (If we old folks are doing it now, then the cable TV business is on it's last legs.)

    watto_cobra
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