At just 7%, usage of Apple's SVoD service still lags far behind its rivals, and could force the company to reconsider its strategy before facing a possible mass exodus as subs start to roll off free trials.

Jeff Baumgartner, Senior Editor

July 15, 2020

3 Min Read
Apple TV+ usage still in the doldrums – study

The overall streaming landscape in the US continues to expand during a pandemic that has caused consumers to stay at home, but Apple TV+, the subscription VoD service launched last November, has failed to get much lift in recent months.

According to an analysis from HarrisX and MoffettNathanson, Apple TV+ usage languished at just 7% in June 2020, about the same usage level the service was seeing in March 2020. That data also suggests that Apple TV+ has gained little to no ground usage-wise on another newcomer, Disney+, and the three main incumbent SVoDs – Netflix, Amazon Prime Video and Hulu.

Figure 1:

Apple TV+'s early struggles appear to stem from a thin overall content library featuring a small number of exclusive, original shows that have not taken the consumer market by storm.

"The Apple TV+ data points should force Apple to reconsider their strategies and options at this point," Michael Nathanson, analyst with MoffettNathanson, said in the report. The study findings are based in part on the Streaming Services Panel of HarrisX's Total Communications Survey, which tabulates information from 8,500 household decision-makers aged 18+.

Colin Dixon, founder and chief analyst at nScreenMedia, warns in this blog post that Apple TV+ is "heading for a mass exodus in November," as customers start to roll off its free trials. While those freebies helped to drive Apple TV+ to a reported 34 million US users by January 2020, its quality over quantity strategy – one shared by Quibi, a new premium, short-form streaming service that has struggled to gain market traction – could make it challenging for Apple to retain those customers when the free period ends.

"So, Apple better have a massive injection of exciting movies and programs on hand for the holidays, or it could be Quibi-time for Apple TV+," Dixon wrote.

Disney+, another service that's been criticized for a lack of original fare, has also failed to come anywhere near its streaming rivals with respect to usage through June 2020. However, the recent debut of the Hamilton feature film is expected to give Disney+'s usage levels a big lift for July. According to 7Park Data, Hamilton was the most-viewed title among all streaming services from July 1-5, and the film accounted for 87% of the time spent on the Disney+ platform. 7Park Data also estimates that 80% of Disney+ subs watched the film in the days after its debut.

As for the broader video streaming market, the entries of Apple TV+ and Disney+ have helped to expand the overall pie without robbing Netflix of customers. "A lack of new original content at both nascent services has also cooled near-term competition for time-spent and new customers," Nathanson wrote.

Streaming penetration of US households reached 75% at the end of Q2 2020, matching the peak reached in Q1 2020 during the early phases of pandemic-fueled stay-at-home orders, and 500 basis points higher than Q2 2019 totals, according to MoffettNathanson's analysis.

Figure 2:

Netflix remains the "clear dominant SVoD player," maintaining penetration levels that are about 1.4x higher than Amazon, Nathanson said.

Netflix reports Q2 2020 results on Thursday (July 16). Nathanson expects Netflix to maintain steady growth, predicting the SVoD giant will add 1.75 million US subs in the quarter, extending that total to 64.54 million. Internationally, he sees Netflix adding 7.92 million subs, for a total of 127.98 million.

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— Jeff Baumgartner, Senior Editor, Light Reading

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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