Netflix says Apple TV+, others to accelerate transition away from traditional TV
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.
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
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.
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.
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.
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.
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.
(If we old folks are doing it now, then the cable TV business is on it's last legs.)