You know things aren’t so great for Apple and its fledgling TV streaming service, Apple TV+, when the tech company can’t even give away the subscription service for free.
According to Deadline, a new study has surfaced that estimates fewer than 10% of those Apple customers that qualify for a free year of TV+ have actually signed up for it. Bernstein Research analyst Toni Sacconaghi arrived at this number after researching Apple’s fourth-quarter financial results and commentary from management. If true, or even remotely close to true, this is a terrible statistic for a company hoping to become a major player in the Streaming Wars.
For those that don’t know what we’re talking about, it’s simple: to help promote the release of its new streaming service, Apple was giving away 12 months of its subscription service for free to folks who purchase new devices. The promotion ended last Friday. And apparently, if the research is to be believed, less than 10% of those who qualify for this free subscription actually took the steps necessary to redeem it. So, what went wrong?
Sacconaghi has three possible explanations, and frankly, none of them are great.
The first explanation is the most beneficial to Apple. The researcher says that the company could be “conservatively estimating its ‘take rate’ or deliberately scaling its promotions of TV+ slowly to mitigate the negative accounting impact of its early ramp.” Sure, that is possible, but it sure doesn’t sound like the real reason.
Explanation #2 says that Apple was unable to successfully promote the service to customers, effectively saying that those that qualify for the free deal just didn’t know that it exists. And honestly, that is probably one of the contributing factors, for sure.
The third possible reason would be the most damning for the tech company and could spell trouble for the service. The researcher says that another possibility is that the offerings of Apple TV+ are severely limited (with no built-in library, the service relies on only a handful of streaming originals to drive business) and/or not enticing enough to attract customers, no matter if the service is free or not. With reviews for most of the series being mixed-at-best, this seems like another contributing factor. Apple has yet to release that “killer app” content that will force folks to sign up for an account. Not even the star power of Jennifer Aniston, Reese Witherspoon, Jason Momoa, and others were enough to convince folks to sign up for a free service. Ouch.
Of course, this is just one example of statistics surrounding the launch of Apple TV+. Over time, we’ll get a better idea of the current health of the service and how big its customer base is. But for now, the signs aren’t great.