Streaming Sector Update: How Netflix, Apple, Hulu & More Fared the First Week in June

streaming_wars_placeholder
CHEYNE GATELEY/VIP

We’re at a moment where it’s starting to feel weird to call some in the new class of video streamers “new.” Apple TV+ and Disney+ have been on the market for 7 months, for example. However, Quibi, Peacock, and certainly HBO Max get a pass on this front and definitely are all still “new.” I bring this up all to say that the dynamics of the video streaming market, which is important as ever as consumers gobble up heightened amounts of digital content in the coronavirus era, are continually changing in some ways you may not be noticing. But we’ve got you covered with this Streaming Sector Update, which distills all the need-to-know recent streaming information into digestible but nutritious bites.

Here’s a look at how the video streamers rank among each other after taking into account what happened to them last week:

Overachievers: 

Apple (A): Apple seriously bulked up its video streaming personnel last week, potentially to the greatest degree of any other company listed here (based on what was publicly reported). Relatively under the radar was the hire of former Hotstar strategy exec Ipsita Dasgupta to become India country manager for Apple’s services like TV+ and Music, while the multiyear overall deal inked with longtime WME partner Theresa Kang-Lowe was harder to miss. The most intriguing Apple move (and hire) of the week was clearly the onboarding of Jim DeLorenzo, however, whose previous tenure as head of sports for Amazon Video indicates a clearer intention for Apple TV+ to host live sports content (see our full take on the Apple-JDL hire here). Fresh talent and content strategies couldn’t come at a better time for Apple TV+, which will increasingly find it harder to cryptically disguise its market performance as “rousing” as more third-party data trickles out: Parks Associates recently reported that Apple TV+ reaches 10% of U.S. broadband households (compare that to 25% for Disney+, which launched the same month and in fewer territories). Moreover, exclusive data provided to VIP by data partner YouGov showed that 2% of U.S. respondents (in a survey fielded at the end of May) said Apple TV+ had the most entertaining TV shows, while this figure was 5.6% for the bigger library-carrying Disney+. 

HBO Max (A-): WarnerMedia’s newest HBO streamer has been on the market for less than two weeks, but data indicates consumers are already starting to appreciate the depth of its library. 1.5% of respondents said HBO Max had the most entertaining TV shows, per YouGov, which comes off as a more impressive figure considering the scores of other new-wave streamers Apple TV+ (1.9%) and Quibi (0.4%), which have had months-more time to win over the hearts of digital TV viewers. Yes, this is an imperfect comparison since HBO Max’s library is bulkier than that of Apple and Quibi, but it nonetheless implies some people are actually digging through the Warner vault, which buys the service time to more measuredly roll out its originals slate (HBO Max only launched with just six originals). Meanwhile, news that HBO Max wouldn’t count toward AT&T mobile customers’ data caps broke, which should encourage some consumers to use it more when they’re not connected to WiFi. News of AT&T’s “zero-rating” practice did draw the ire of senators, though the company may sense a chance to argue that effects of stifled competition stemming from unlimited mobile data caps for HBO Max are muted in the coronavirus era where many consumers are mostly staying at home and using more WiFi data anyways (and AT&T has said that HBO Max is not exempt from home internet data caps). 

Just OK: 

Hulu (B+): Hulu had a relatively quiet week original content drop-wise, as its big June original (“Love, Victor,” the recent trailer of which sits at 10M+ views on YouTube) won’t debut until the 19th. Positive sentiment for Hulu’s S2 of “Ramy” did flow in from places like The New Yorker and The Guardian, while the show now has a 95%-93% critics-audience score on Rotten Tomatoes, but the most impactful news was that Disney is more tightly integrating Hulu, which came under full control of Disney in May 2019, into its ad strategy. Brands will be able to advertise across Hulu and Disney TV networks starting October 1, which is a smart way for Disney to drum up TV ad sales as the reach of Hulu and Disney networks head in opposite directions. October 1 will mark the first time Hulu and Disney’s TV networks will be united, and the lead time until then gives Hulu more time to grow its reach, a task that will likely be aided in its presence in Disney’s $13 per month Disney+-Hulu-ESPN+ bundle. 

Disney+ (B+): Disney’s biggest streaming bet continues to hum along and revealed it will more aggressively try to retain its int’l user base by releasing “Frozen 2” two weeks ahead of schedule on July 3 in the U.K. and Ireland. Meanwhile, its big play for subs this month will be “Artemis Fowl,” which is bypassing a theatrical run to debut on Disney+ on June 12. These types of early/big movie releases are important for Disney+ right now as new streaming options (HBO Max, Peacock) hit the market that may cause consumers to reevaluate their SVOD mixes. Luckily for Disney+, which Parks Associates recently reported reaches 25% of U.S. broadband houses, its deep movie library should be able to help protect it from competitors to some degree. YouGov’s late May survey found that 14% of respondents said Disney+ had the most entertaining movies, ranking it third among all other SVOD services asked about in this question. Not all streamers place an emphasis on movies (notably CBS All Access, until it revamps, that is) but Disney+’s ranking on this question helps quantify the IP advantage Disney has in the marketplace. 

Prime Video (B): Amazon made it clear it’s looking to strengthen its position abroad last week. The service improved the reach of its Video service abroad as Chinese tech brand OnePlus announced Prime Video was being integrated into its Q1 and Q1 Pro TVs, which are currently only available in India and China, according to TechRadar. Given the Great Firewall of China, this is really just a chance for Amazon to gain more eyeballs and boost usage in India, which big tech has long been battling to gain a foothold in. Meanwhile, Amazon will also air four live Premier League games in the U.K. for free when the season resumes later this month. This might not result in a crazy number of sign-ups given it is just 4 EPL games, but it will still get the Prime Video name seen more than it otherwise would have when Premier League fans search for information about the league resuming. In essence, you might see this EPL rights play as a marketing expense, which is useful for a company continually struggling with warehouse controversy-related headlines. 

Peacock (B-): NBCU’s fledgling video streamer remains mysterious in a way similar to Apple TV+ did when it first launched: Management implies things are going well, but no numbers are really out there (from management, at least) to back it up. Case in point: Comcast chief Brian Roberts said last Wednesday in a virtual meeting that the company is “excited” about Peacock, but that it’s still early days (a comment similar to the SVOD update antics usually resorted to by Tim Cook). But while Peacock has remained tight-lipped on the user reach front, NBCU did make some notable moves to ensure it can appeal to a broader base: It started offering 40% off to those who pre-order Peacock Premium, and will likely place the long-gestating “Law & Order” spinoff “Hate Crimes” on Peacock. The latter is a longer-term play, but it does indicate Peacock will be an even larger pull for “L&O” junkies (Peacock was already set to be the only place to offer the three core “L&O” series in one place). Meanwhile, the price cut play could more immediately entice subs, but NBCU may need to turn up the marketing heat to maximize the number of people that are even aware of it. It could otherwise risk experiencing Apple TV+ free trial-like uptake numbers on its offer. 

Skating by/On thin ice:

Netflix (C+): Netflix’s big drop of the week was S4 of “13 Reasons Why,” which, controversial as the show’s history may be, seemed to debut relatively quietly. While the pile on for “Space Force” (leading up to its May 29 release) was swift, boosting its profile in the trade news cycle, “13RW” information (leading up to its June 5 release) was something that needed to be more actively seeked out. Still, chatter from “13RW” diehards boosted the show’s awareness in the early innings of its release, and the show now sits at the no. 1 spot in Netflix’s top 10 U.S. ranking. Luckily for Netflix, its dominance in the video streaming marketplace and sheer volume of content output means it can survive even when it puts out a string of a few flops and sleepers. YouGov’s data showed that 45% of respondents said Netflix had the most entertaining TV shows, which was the most out of any other SVOD asked about. This is likely in large part due to Netflix having the biggest reach, but keep in mind reach isn’t everything (see: Prime Video’s 16.9% score and Hulu’s 23% score on this question). But what ultimately dragged Netflix down to the skating by-ers this week was news that it is, along with other digital platforms, on deck to be hit with an additional tax in Kenya.

Quibi (C): I’m trying, but it’s difficult to place Quibi in another slot when the (important) headlines surrounding it are essentially all gloomy. Page Six and the WSJ suggested Quibi may lay off some staffers, though a staff memo provided to Variety clarified that no such belt-tightening measures are occurring. Still, senior execs at Quibi are taking 10% pay cuts voluntarily, which isn’t all that uncommon in the coronavirus era, but it doesn’t point to business being booming either. On top of this, Quibi scored the lowest on the YouGov’s survey of the SVODs with the most entertaining TV shows and movies, which has a lot to do with its newness to the market and relatively small reach (it has 1.3M active users), but it also indicates Quibi could do better in cultivating rabid fan bases for some of its originals. Lending credence to this theory is the fact that Katzenberg has recently conceded that many Quibi shows “haven’t charmed viewers,” per Bloomberg. It’s not like Quibi needs to turn into a runaway success overnight, but it seems to be approaching a fork in the road where it must reassess its strategy. To start, scooping up more unscripted content may help: Quibi execs have already pointed to a dependence on scripted programming is an issue worth addressing.