Apple faces daunting competition in the Streaming Wars.
As consumers turn to the SVOD / subscription / “All You Can Eat” video model, they are cutting back on purchasing and renting programs.
- Take a look at the 3+ year trend in US Home Entertainment Spending revealed in the chart below from DEG and nScreenMedia:
- The black line shows the steady rise of the subscription streaming model, led by Netflix and Prime.
- The Red (Rental) and Blue (Purchase) lines reveal a steadily eroding market.
- This switch from buying and renting video to subscriptions is most painful for the Apple / iTunes transactional model.
- Apple is responding with increased urgency: its investment in Originals is ‘ballooning’ to $6 Billion.
- The goal: bolster the Apple TV+ subscription service that is planned for launch in 2019.
Threat from Disney+
- Apple lacks a powerful library of owned content like its upcoming competitor Disney+.
- Disney+ launches in November, backed by:
- The Marvel, Simpsons, Star Wars and Nat Geo franchises
- Disney classics like Snow White
- A vast animation library built around legendary characters like Mickey Mouse
- Its stream of new theatrical releases
- And a portfolio of cable and broadcast networks that will both originate and promote Disney+.
- There is speculation that Apple will buy a studio like Sony to access the mix of original content and classic hits that are a critical success factor in the streaming wars.
- VideoNuze‘s coverage of the industry context for the streaming wars is always excellent, as in this post and podcast.
- Watch out for my upcoming posts comparing newcomers Disney+, AppleTV+, HBO Max and NBCUniversal‘s unnamed service — with incumbents Netflix and Prime.