Member price discount or quality content is more useful?
Editor’s note: This article is from WeChat public account “Blowfish Movie Archive” (ID: Htysda), the author Yuzhong.
This November may accelerate the reshuffle of competition in the US streaming media platform.
On November 1, the technology company Apple launched Apple TV Plus; on November 12, the old Hollywood film company Disney launched Disney Plus. The former used the membership fee of $4.99 per month to price Netflix, HBO, and Hulu before the price. The latter has more advantages in content than other platforms.
This has just released the 2019 Q3 earnings report. Global paying users increased by 6.77 million compared with the previous quarter. Revenue increased by 31.1% year-on-year and net profit increased by 65%. The momentum of Netflix suddenly fell into a huge challenge. Even if the company plans to spend up to $15 billion on content production this year, CEO Hastings Reed said at the Dealbook conference last week that it would increase spending on movies and shows.
The battle of the fierce streaming media platform is now kicking off. Whoever has mastered the content, who has the basis to win the user, how will this content battle be carried out, and finally form a pattern of hegemony?
The Apple TV Plus, which debuted half a month ago, is on line with four episodes and a series of children’s shows. According to media reports, Apple has spent more than $6 billion on the production of these original film and television content. Among them, the “Morning News”, which was participated by stars such as Jennifer Aniston and Steve Carell, is even more expensive. “game of Thrones”. And the platform and some famous content creators signed an exclusive production agreement, including the production of “Roman” with the cooperation of Netflix, Alfonso Caron, host Oprah Winfrey, screenwriter Jason Katim Si et al.
In recent years, Apple, which focuses on smart wear, is now switching to content, which naturally takes a lot of effort. In comparison, Disney, which has a history of 96 years, is temporarily not a headache for content. As you can see from the Disney Plus home page, within the platformDivided into Disney, Pixar, Marvel, Star Wars, and National Geographic five major sections, a total of 500 movies and more than 7,500 episodes of TV series.
There is no shortage of Fox-owned content acquired by Disney, such as “The Simpsons”; Disney also intends to put adult-oriented content in Hulu, which is controlled by its owner, especially based on the Marvel animation series. Adapted content.
In addition, Disney has added some original film and television content based on these own IPs, such as “Star Wars” derivative drama “Mandalo”. Unlike Netflix’s one-off release of the entire episode, the new episodes in Disney Plus will be updated weekly.
Thanks to the high recognition and stickiness of Disney’s accumulated IP in the public, Disney Plus has a large number of users coming in online. The number of subscribers on the first day exceeded 10 million, causing the server to be down. It is not easy for Disney to be good at content, and it is not easy for the streaming media platform. For streaming media platforms, content is important, but it does not only need content, technology, operations, etc.
In terms of drainage, Apple, which has mobile phones, computers, tablets, TVs, etc., also has certain advantages, and users can use Apple TV Plus most conveniently. As of June this year, Apple has more than 1.4 billion active devices worldwide. If you can use Apple TV Plus to watch video content, the user growth of the platform is not a problem. To encourage everyone to use the platform, the platform allows six family members to share a membership number and then use their respective Apple IDs for viewing.
And users who purchased Apple products on or after September 10 this year can also use the membership service for one year for free. You know that there are 225 million iPhones sold globally in 2018, but this year, although it has declined, Sales of products such as iPads continue to increase. According to media reports, Apple at the end of March this yearApple News Plus, the just-launched news platform, has now grown to 390 million paid subscribers, not knowing if Apple TV Plus will continue this rapid growth.
In addition, these streaming media platforms all need to be paid members to watch the content. Compared with the domestic video platform, the membership fee of foreign streaming media platform is quite expensive. For the average audience, it is impossible to buy all the platform members, so the price has become a crucial factor in the selection of the platform.
Apple has adopted a low-cost strategy in this session. Its Apple News Plus and Apple Music membership fees are $9.99 per month, while Apple TV Plus, which is heavily invested, costs $4.99 a month, an annual package of $49.99, and Disney Plus has a monthly membership fee of $7. The annual package is $70, and the former’s annual membership fee is about 140 yuan lower than the latter.
However, Disney bundled Disney Plus with Hulu and ESPN+, and the monthly subscription fee for the three platforms was $12.99. Previously, if you were to subscribe to Hulu, you would have to spend $5.99 a month; subscribe to ESPN+ would cost $4.99 a month. Bundled sales are, to some extent, a low-cost strategy used by Disney.
The reason why they value the membership price is because, unlike the revenue model of the domestic video platform, these streaming media platforms do not intend to rely on advertising to earn revenue, but the membership fee as revenue. According to foreign data agency eMarketer, Hulu’s advertising revenue in the United States will exceed $2 billion in 2020; Amazon’s Amazon Prime Video’s digital advertising revenue is second only to Google and Facebook, ranking third in the United States.
In addition, Apple TV Plus, Disney Plus, Netflix, and HBO have no advertising business. In a letter to investors, Netflix said that they believe that to have a longer and more valuable business, it should be achieved by continuously improving user satisfaction, rather than participating in advertising competition.
This business model also encourages all platforms to create good content to attract users, HBO’s “Game of Thrones”, “Western World”, CBS All Access’s “Fatal Woman”, “Proud wife”, Hulu “The Story of the Virgin” and “Kill Eve”, Netflix’s “Black Mirror” and “Strange Story” have attracted wide attention.
Next, the content of each family’s content is bound to become more intense. At that time, users will choose, what platforms will be potential, and which ones will gradually become depressed?
At the beginning of this year, the movie database IMDb also launched its own streaming media platform IMDb Freedive, which only launched more than 130 movies and 29 TV shows. Whether it is a data platform like IMDb, or a traditional TV station such as CBS, a veteran film company such as Disney, or a technology company such as Apple, all want to solve the growth bottleneck problem by establishing a streaming media platform. Is this practice feasible? These issues have yet to be verified by time.