The Battle of the Plus Signs is here!
Apple TV+ launched on Friday, and Disney+ is arriving in a couple of weeks, reshaping the landscape for video streaming. Given that neither of them wins any points for title originality, who wins in a streaming wars match-up: Apple or Disney? Let’s see.
In one corner, we’ve got Disney, widely viewed as the 800-pound content gorilla. They are launching with hundreds of movies and TV shows from six major brands: Disney, Pixar, Marvel, “Star Wars,” National Geographic, and “The Simpsons.” They are sitting on almost one hundred years of proprietary content, going back to 1928’s Steamboat Willie. Disney put together a YouTube compilation featuring twenty-second clips of all the Disney+ content coming, and it’s over three hours long. Disney is throwing everything they have into this fight — they’ve even got the Shaggy D.A. and the Cat from Outer Space!
In the other corner, we have Apple, which is weighing in at…..eight shows. Eight measly shows. Talk about an 80-pound content weakling! What’s worse, half of these shows have already been dissed relentlessly by the critics. According to Variety, they include a “fairly undistinguished teen comedy” (“Dickinson”), an “outright terrible dystopian fantasy series” (“See”), and a “promising if occasionally cliched alternate history space-race show (“For All Mankind”). And “The Morning Show,” with Reese Witherspoon and Jennifer Aniston, is currently limping into RottenTomatoes with a 59% critic’s rating.
So who’s going to win? The conventional wisdom says Disney. But the conventional wisdom is wrong.
Why? Because while content is important, the real measure in the game is the number of subscriber relationships. And in this dimension, Apple is at least a decade ahead of Disney in this effort. Disney CEO Bob Iger basically admitted as such a few years ago, when he said:
“It’s one thing to be as fortunate as we are to have Disney, ABC, ESPN, Pixar, Marvel, ‘Star Wars’, and Lucasfilm. But in today’s world, it’s almost not enough to have all that stuff unless you have access to your consumer who, because of technology, is providing you with incredible data to provide the consumer with a more customized and personalized experience that can be monetized better.”
How many times have you interacted with Apple today? The average iPhone user unlocks their phone eighty times a day. And that’s not counting Apple TV, your Mac, Photos, Apple Music, and more. Now, how many times have you interacted with Disney? Apple has roughly a billion registered users. How many registered users does Disney have?
Disney is suddenly looking a whole lot punier.
When it comes to direct customer relationships, Apple is the real 800-pound gorilla. Their revenue from services and subscriptions ($12.5 billion last quarter) is now bigger than their computer business! Now contrast that with Disney. Someone who buys a “Spirited Away” doll at a Walmart is a Walmart customer, not a Disney customer. Someone who goes to see “Star Wars” at an AMC Theater is an AMC Theater customer, not a Disney customer.
Today, media and technology companies live or die by usage and engagement. I have no doubt that Disney will have some impressive subscriber numbers to share in a year, but when it comes to establishing and developing direct customer relationships, they are miles and miles behind Apple.
Cupertino for the win.
For more insights from Zuora CEO Tien Tzuo, sign up to receive the Subscribed Weekly here. The opinions expressed in the Subscribed Weekly are his own, not those of the company. The companies mentioned in this newsletter are not necessarily Zuora customers.
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