Nettflix begins to feel the pressure of competition in its own flesh. Last Tuesday their titles were almost 4% left after Apple's announcement about the price of its new streaming platform, Apple TV +, which will be available to its customers on November 1. Those $ 4.99 per month are a latent threat to add to the many expectations that Disney + has already generated , the other platform that will be released in the fall and that could take a significant portion of the market from the company led by Reed Hastings.
Although for some it arrives rather late to the appointment, Apple seems to be playing its cards well. Initially, it has opted for an aggressive pricing policy with respect to its competitors . Its service will be the cheapest of the whole range available to consumers in the United States, below the $ 5.99 of Hulu - the platform controlled mostly by Disney -, the 6.99 of Disney + and the 12.99 of Netflix in its most popular plan.
The Netflix service has the same price as Amazon's - although the latter is part of a subscription to Prime for $ 119 annually - and two dollars cheaper than that of HBO, the most expensive in the class. That is why, among other things, some analysts on Wall Street already predict that Apple has a successful emergence in the world of streaming.
Laura Martin, an analyst at Needham & Co., said in a recent report that she sees Apple with a clear advantage in two fields, the cost of consumer acquisition and the production of content. Apple has "zero costs in customer acquisition", basically because it expects it to use the 900 million it already has after years of selling iPhones, computers and other devices, and through services such as Apple Music and Apple Cloud.
On the other hand, Martin believes that they can compensate for the investment in original content with income derived from the sale of subscriptions from other platforms such as HBO, Showtime or Starz through Apple TV. The analyst speculates even on the potential revenues that could be generated by three combined services such as Apple TV +, Apple Arcade, its new video game platform, and Apple Music, which already has 56 million subscribers worldwide.
«Assuming that they sell these three services at $ 10 per month each and that they get 10% of their client base subscribed to each of them, that would add $ 32,000 million in annual revenue (almost double the total income by Apple for services in 2018) ». That would be enough to invest two and three times more money in content than Netflix, the industry leader in that chapter so far, but at the cost of borrowing in a risky way.
All this happens in a moment of doubt on the platform based in Los Gatos, California. Netflix was far from content investors with their second quarter numbers. In the US, it lost subscribers and worldwide it only managed to capture 2.7 million more compared to the expected 5 million.
Before the tide of content that Disney will offer from November 12 -Pixar, Star Wars and all the classics of the brand, among a huge menu- and the initial Apple catalog -Steven Spielberg, Oprah Winfrey, Reese Witherspoon .. .- It is not surprising that many call into question the future leadership of Netflix in the sector.
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