November 11, 2019
With the streaming video market beginning to resemble a heavyweight prize fight involving numerous contenders, a “tale of the tape” analysis is in order to better understand costs associated with each “fighter” (service).
Apple launched Apple TV+ on Nov.1 for $4.99 — arguably the lowest-priced SVOD service on the market. The service is considered a significant threat to Netflix ($8.99) due to the Apple name and star-studded content (“The Morning Show,” starring Jennifer Aniston, Steve Carell and Reese Witherspoon).
Wedbush Securities contends Apple TV+ can generate 100 million subs in the next four years due in part to a global iPhone install base of around 900 million users.
“While this is an obvious threat to Netflix, Apple TV+ only has a handful of shows at launch,” analyst Michael Pachter wrote in a note.
The Nov. 12 launch of Disney+ ($6.99) could cost Netflix 25% of total viewing hours as much Disney/Fox content migrates from the SVOD pioneer to Disney+, according to Wedbush.
Disney/Fox controls all of Netflix’s canceled Marvel Defenders Universe series (“Daredevil,” “Jessica Jones,” “The Punisher,” “Luke Cage” and “Iron Fist”) and Disney+’s upcoming Marvel Cinematic Universe series (“The Falcon and the Winter Soldier,” “Wanda Vision,” “Loki,” “What If…?,” and “Hawkeye”), popular series such as “The Simpsons,” and an unrivaled film library.
“We estimate that by the end of 2021, Netflix will have virtually no content from Disney, Fox, Warner Bros. or NBC Universal, and we think its efforts to replace that content with originals will only partially succeed,” Pachter wrote.
Disney earlier this year agreed to purchase Comcast’s stake in Hulu ($5.99) for about $5.8 billion by 2024. While Hulu continues to lose billions, which amount to the excess license fees paid to corporate owners over the revenue it generates, Pachter contends if Disney can grow Hulu’s subscriber base, it should be able to achieve breakeven and manage to gain market share from Netflix.
Disney is offering a subscription package with Disney+, ESPN+ and Hulu to drive greater subscriber adoption of all services.
As Netflix has developed more than 100 original series seasons outside of the U.S., it has relied on ‘second window’ content for the bulk of its viewing hours, according to Pachter.
“We estimate that fully 90% of viewing hours on Netflix are consumed by second window shows, and we estimate that Disney, Fox, Warner Bros. and NBC Universal account for 65% of total Netflix viewing hours,” he wrote.
Pachter estimates that by the end of 2021, Netflix will have virtually no content from Disney, Fox, Warner Bros. or NBC Universal.
“The company’s licensing of ‘Seinfeld,’ beginning in 2021 will help to soften the blow, and we expect [the show] to account for 5% or more of Netflix viewing hours,” wrote the analyst.
In 2015, Amazon Prime Channels began partnering with various third-party SVOD services offering domestic Prime members access to curated groups of content.
Monthly fees vary from $2.99 to $9.95 following a free trial period lasting between seven and thirty days. Showtime and Starz are priced at $8.99 each. Amazon has since added more channels, including HBO for $14.99 and Cinemax for $9.99.
AT&T TV Now: $135.00 Ultimate — 125+ live channels; $124.00 Xtra — 105+ live channels; $110.00 Choice — 85+ live channels; $93.00 Entertainment — 65+ live channels; $86.00 Optimo Más — 90+ live channels; $70.00 Max — 50+ live channels, including HBO and Cinemax; $50.00 Plus — 40+ live channels, includes HBO.
Hulu with Live TV: $50.99 No commercials plus live TV; $44.99 Limited commercials plus live TV.
YouTube TV: $50.00 YouTube TV — stream live TV from 50+ networks; $11.99 YouTube Premium — ad-free and offline video and music.
Sling TV: $25.00 Sling Orange — 34 channels of live shows, sports, and news; $25.00 Sling Blue — 47 channels of local tv, regional sports, and live shows, sports and news.
Netflix: $15.99 four-screen ultra-high-definition streaming; $12.99 two-screen high-definition streaming; $8.99 single-screen standard definition streaming.
HBO Now: $14.99 Standalone subscription to stream HBO on demand.
HBO Max: $14.99 Arriving May 2020; new home of HBO and WarnerMedia (Warner Bros., New Line, DC Entertainment, CNN, TNT, TBS, truTV, The CW, Turner Classic Movies, Cartoon Network, Adult Swim, Crunchyroll, Rooster Teeth, Looney Tunes, and more. Will have original programming, exclusive streaming rights to “Friends,” “The Fresh Prince of Bel-Air” and “Pretty Little Liars.”
Cinemax: $9.99 Max Go — standalone subscription to stream Cinemax on demand.
Amazon Prime Video: $12.99 monthly Prime membership; $9.92 annual Prime membership for $119 per year; $8.99 standalone video subscription.
Hulu: $5.99; $11.99 no-commercials subscription option for all non-live content.
Showtime: $10.99 standalone subscription to stream Showtime on demand.
Starz: $8.99 Standalone subscription to stream Starz on demand.
Apple TV+: $4.99 ad-free monthly subscription for original content; TV App includes access to subscribed cable content and most standalone SVOD subscriptions.
Disney+: $6.99 Standalone subscription to stream Disney, Pixar, Marvel, Star Wars, National Geographic, and some Fox content (“Simpsons”); Will be offered in a bundle with Hulu and ESPN+.
Peacock: Price not disclosed. Expect a standalone subscription from Comcast to stream NBC Universal content to be launched mid-2020.
The Roku Channel: Ad-supported service for accessing live content, movies, and series on demand provided by partners; accessible via Roku device or web browser.
IMDb TV: Ad-supported service for accessing movies and series on demand provided by partners; accessible via IMDB.com or any Fire TV devices.
Crackle: Ad-supported service for accessing movies and series on demand provided by Sony Pictures and content partners, accessible via most connected devices.
Tubi: Ad-supported service claims 20 million average monthly users and more than 132 million hours streamed in September alone.