Please ensure Javascript is enabled for purposes of website accessibility
Freebies Are the Key Hook in New 'Streaming Wars'
gvw_ap_news
By Associated Press
Published 6 years ago on
November 2, 2019

Share

If you make it free, will they come?
Apple, Disney and AT&T’s WarnerMedia want to jump-start their challenges to Netflix by offering freebies and deep discounts on emerging streaming plans.

“Next year is a race to aggregate consumers. The first war is getting them to sign up for a service. The second war is retaining them.” Kevin Westcott, who heads Deloitte’s U.S. telecommunication, media and entertainment consulting business
That includes a free year of Apple TV Plus for customers of new Apple devices and a free year of Disney Plus to higher-tier Verizon customers. Some existing HBO subscribers will also get the super-charged version, HBO Max, at no additional cost.
Experts say these services can worry later about holding onto customers — perhaps by offering must-see shows they can’t get anywhere else or tying discounts to other services that are difficult to drop.
“Next year is a race to aggregate consumers,” said Kevin Westcott, who heads Deloitte’s U.S. telecommunication, media and entertainment consulting business. “The first war is getting them to sign up for a service. The second war is retaining them.”
The new services have to attract users with marketing blitzes and the promise of original shows and movies, then build a big enough library of old favorites to help keep them. Already, HBO Max will have “Friends ” exclusively, and Disney is taking back its older movies from Netflix.
A lot of shows and movies won’t be available at launch, but will be added over time. Free helps in the meantime.

Apple TV Plus Debuted Friday for $5 a Month

Netflix has spent years building up its 158 million subscribers worldwide. Hulu has 28 million. The new players want to ramp up subscribers quickly to show they can compete.
So the services have launched the digital equivalent of the old cable promos: lure you in with discounted rates, then jack up the price after a year or two. But digital customers have more choices than cable customers of yore so a big question is whether they’ll stick around.
Apple TV Plus debuted Friday for $5 a month with just nine shows and a few more coming soon. It’s already cheaper than the $13 a month Netflix charges for its most popular plan. Buyers of any new iPhone, iPad, Apple TV, Mac or iPod Touch get a year for free. That suggests a market of 40 million customers, Wedbush analyst Dan Ives said.
Disney Plus, which arrives Nov. 12, is also cheaper than Netflix at $7 a month. Disney struck a deal with Verizon to give customers of all unlimited wireless plans and some home-internet customers a free year. Members of Disney’s free D23 fan club were also eligible to buy three years of Disney Plus service up front for the price of two years. Disney is targeting 60 million to 90 million worldwide by 2024.
AT&T’s HBO Max, which launches in May for $15 a month, is the most expensive of the new services. That could make it tough for AT&T to reach its goal of 50 million U.S. customers and 75 million to 90 million worldwide by 2025.
But AT&T will make the service free for about 10 million existing HBO subscribers, or about a third of its U.S. subscribers. HBO Max will also be included with AT&T’s higher-tier wireless and broadband offerings.
Comcast’s Peacock service will be free for many of its own cable and internet customers. The regular price hasn’t been announced yet. The service launches next spring.

Photo of an iPhone with Disney Plus on the screen surrounded by popcorn
(Shutterstock)

Even the Dominant Player Isn’t Immune

“I don’t think customers are going to have to make difficult choices about cutting one in order to add another for the first few years,” said MoffettNathanson Research’s Craig Moffett.
But companies can’t run the services at a loss forever, and when discounts end and prices rise, customers may flee. After all, the services add up fast, and signing up to multiple ones could end up costing as much as the cable packages people are ditching for streaming.

“I don’t think customers are going to have to make difficult choices about cutting one in order to add another for the first few years.” — MoffettNathanson Research’s Craig Moffett
There’s a lesson to be drawn from the latest TV-industry attempt to counter cord-cutting. Cable-like online packages like Sling TV and YouTube TV have ended discounts or raised prices, causing customers to flee and new sign-ups to slow down. Sony announced Tuesday that it will quit offering PlayStation Vue, one of the first to challenge traditional TV packages.
Even the dominant player isn’t immune. Netflix has raised prices slowly, which helped shield it from price shock, but its latest small increase has hurt customer growth.
Westcott, the Deloitte consultant, compared the streaming promotions to efforts to lure wireless customers from competing companies.
T-Mobile has long offered Netflix free to many customers. Verizon includes six free months of Apple Music with some of its unlimited plans. Many offer other deals like paying off your phone early or getting a phone for free if you switch.
“They were constantly looking for ways to steal you off other players,” he said.

Services Are Investing Billions Into Creating New Shows

How will these services keep users once they’ve reeled them in?
The companies can constantly refresh their services with new shows and movies, Diffusion Group president Michael Greeson said.
Cathy Yao, an analyst at Diamond Hill Capital Management, also said companies can try to create “stickiness” by bundling the services with other products and services so a customer is less inclined to unsubscribe.
For example, including HBO Max with wireless and broadband services will make consumers more likely to stick around for all three, Yao said. It’s similar to how Amazon packages its streaming service with its $119-a-year Prime loyalty program.
Ultimately, content will be king, experts say. The services are investing billions into creating new shows and building up their libraries to find or create the next “Stranger Things.”
Apple TV Plus inked high-profile deals with Oprah Winfrey, Reese Witherspoon and Jennifer Aniston. Comcast’s NBCUniversal reportedly paid $500 million to take back “The Office,” and Netflix reportedly paid even more to claim global rights to “Seinfeld.”
“The weapon of choice for retention is exclusive programming,” said Peter Csathy, founder of Creatv and an industry consultant. “All of these behemoths are investing billions of dollars in originals with the hope of finding the next ‘Game of Thrones’ that becomes ‘Must See TV.'”

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Could Trump Team Suspend Habeas Corpus to Expedite Deportations?

DON'T MISS

Two Teens Charged in Shooting Death of Caleb Quick

DON'T MISS

India and Pakistan Agree to a Ceasefire After Their Worst Military Escalation in Decades

DON'T MISS

Ukraine and Allies Urge Putin to Commit to a 30-Day Ceasefire or Face New Sanctions

DON'T MISS

Soviet-Era Spacecraft Plunges to Earth After 53 Years Stuck in Orbit

DON'T MISS

Tax the Rich? Slash Spending? Republicans Wrestle With Economic Priorities in the Trump Era

DON'T MISS

Israeli Airstrikes Kill 23 in Gaza as Outcry Over Aid Blockade Grows

DON'T MISS

Experts Call Kennedy’s Plan to find Autism’s Cause Unrealistic

DON'T MISS

Trump’s Trip to Saudi Arabia Raises the Prospect of US Nuclear Cooperation With the Kingdom

DON'T MISS

Oh Ohtani! Dodgers Star Hits 3-Run Homer in Late Rally Victory Over Diamondbacks

UP NEXT

Ukraine and Allies Urge Putin to Commit to a 30-Day Ceasefire or Face New Sanctions

UP NEXT

Israeli Airstrikes Kill 23 in Gaza as Outcry Over Aid Blockade Grows

UP NEXT

Experts Call Kennedy’s Plan to find Autism’s Cause Unrealistic

UP NEXT

Summer Movie Guide 2025: Here’s What’s Coming to Theaters and Streaming From May to August

UP NEXT

First At-Home Test Kit for Cervical Cancer Approved by the FDA, Company Says

UP NEXT

Leo XIV’s Service to Poor Propelled Him to Papacy, Cardinals Say

UP NEXT

Nitrous Oxide Recreational Use Risks: Brain Damage, Death, and Easy Access

UP NEXT

Former Supreme Court Justice David Souter, a Republican Who Became a Liberal Darling, Dies at 85

UP NEXT

Pope Leo XIV Celebrates First Mass as Pope and Calls His Election Both a Cross and a Blessing

UP NEXT

Selma Bear Sighting Prompts Police, Wildlife Response

Ukraine and Allies Urge Putin to Commit to a 30-Day Ceasefire or Face New Sanctions

2 hours ago

Soviet-Era Spacecraft Plunges to Earth After 53 Years Stuck in Orbit

2 hours ago

Tax the Rich? Slash Spending? Republicans Wrestle With Economic Priorities in the Trump Era

2 hours ago

Israeli Airstrikes Kill 23 in Gaza as Outcry Over Aid Blockade Grows

2 hours ago

Experts Call Kennedy’s Plan to find Autism’s Cause Unrealistic

2 hours ago

Trump’s Trip to Saudi Arabia Raises the Prospect of US Nuclear Cooperation With the Kingdom

2 hours ago

Oh Ohtani! Dodgers Star Hits 3-Run Homer in Late Rally Victory Over Diamondbacks

2 hours ago

Tariff Talks Begin Between US and Chinese Officials in Geneva

2 hours ago

Summer Movie Guide 2025: Here’s What’s Coming to Theaters and Streaming From May to August

3 hours ago

Give Mom the Gift of a Kitchen-Free Mother’s Day

4 hours ago

Could Trump Team Suspend Habeas Corpus to Expedite Deportations?

WASHINGTON — White House deputy chief of staff Stephen Miller says President Donald Trump is looking for ways to expand its legal power to d...

14 minutes ago

https://www.communitymedical.org/thecause?utm_source=Misfit+Digital&utm_medium=GVWire+Banner+Ads&utm_campaign=Branding+2025&utm_content=thecause
14 minutes ago

Could Trump Team Suspend Habeas Corpus to Expedite Deportations?

The Clovis Police Department identified two suspects they have arrested in connection with the murder of Caleb Quick, 18, at a Saturday, May 10, 2025, news conference. (GV Wire Composite)
1 hour ago

Two Teens Charged in Shooting Death of Caleb Quick

1 hour ago

India and Pakistan Agree to a Ceasefire After Their Worst Military Escalation in Decades

2 hours ago

Ukraine and Allies Urge Putin to Commit to a 30-Day Ceasefire or Face New Sanctions

2 hours ago

Soviet-Era Spacecraft Plunges to Earth After 53 Years Stuck in Orbit

2 hours ago

Tax the Rich? Slash Spending? Republicans Wrestle With Economic Priorities in the Trump Era

2 hours ago

Israeli Airstrikes Kill 23 in Gaza as Outcry Over Aid Blockade Grows

2 hours ago

Experts Call Kennedy’s Plan to find Autism’s Cause Unrealistic

Help continue the work that gets you the news that matters most.

Search

Send this to a friend