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Should Netflix Fear Apple TV+?

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Growing competition in the streaming industry

On March 25, Apple (AAPL) announced that it is launching its original video streaming service, Apple TV+, in the fall in more than 100 countries. Apple’s new streaming service will be an ad-free subscription and will have exclusive Apple original content.

Apple’s streaming service was long-awaited as many tech giants have entered the space amid the growing popularity of watching content online. Notably, user penetration in US video streaming is expected to reach 38.6% in 2023 from 38% in 2019.

Apple TV+ service might dent Netflix’s position

Apple’s service is expected to hurt the dominance of streaming service providers such as Netflix (NFLX), Amazon (AMZN) Prime Video, Hulu, and HBO Now. Apple TV will also compete with Walt Disney’s (DIS) Disney+, which is rolling out at the end of 2019 with its Disney-branded direct-to-consumer offerings. AT&T’s (T) WarnerMedia is also debuting its services in late-2019, while Comcast’s (CMCSA) NBCUniversal is launching its online video streaming services in early 2020.

Apart from original shows, Apple TV+ will offer content from third-party studios such as AT&T’s (T) HBO, CBS’s (CBS) Showtime, and CBS All Access through Apple TV Channels in May. Apple programming will also be available on Roku (ROKU), Amazon Fire TV, and other smart TVs and devices. However, unlike Hulu and Netflix, Apple TV+ will not have a collection of popular broadcast shows.

Pricing

Netflix raised its monthly subscription plan in January by 13% to 18% in the US, which means that its basic package would now cost $9. Hulu’s basic plan also starts at $5.99 a month. However, since Apple hasn’t disclosed the pricing of its streaming service, investors are currently unsure if Apple could threaten the content king Netflix, even though the content of Apple TV+ and its worldwide launch seems attractive. Netflix, on the other hand, has subscribers in 190 countries.

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