Is Anyone Watching Apple TV+?

It’s sort of unfortunate that streaming is having such a moment under the given circumstances. But if anything can distract us in a Coronavirus world, it’s streaming video and tigers. From Netflix to Twitch to YouTube, headlines blare at us how much we’re streaming.

While, on the whole, this is good for all streamers, I had to admit I wonder if one particular streamer is utterly failing to take advantage of this friendly landscape for streaming video: Apple. Specifically, Apple TV+, their service which launched with a bit of fanfare in November, but since then has been, well, blah.

So let’s dig in to ask this question: is anyone watching Apple TV+? And what could that mean for the future of Apple TV+?

What is the Rumor Mill Saying?

In a few different conversations, I’ve been hearing that Apple TV+ is underperforming expectations. “Underperforming” being business euphemism for failing. The ratings, the rumors imply, are so low that most observers wouldn’t actually believe it.

What little does leak publicly seems to back this up. Here’s Barry Diller—about as well connected a source as Hollywood has—on Dylan Byers’ podcast saying:

“[Apple is] still not in it with both feet… They’ve put some capital in, but relatively little. They’re not making a major effort. … They haven’t decided yet.”

The crazy part is Apple has committed over $6 billion dollars by some estimates on streaming. Which is more than a major effort for every other company except for, well, Apple.

Of course, rumors are just rumors. In intelligence—a field I used to work in before joining entertainment—the hardest part is to manage “human intelligence” (meaning, people). Specifically, people who are usually betraying their country to provide your side information. The goal is to run a “source” who is well placed for a long time, so that they can provide a track record of accurate information. That builds trust.

I trust the rumor mill in this case. And I wouldn’t pass this rumor on if I only had one source. Like I said, I’ve heard this in a few conversations and from folks I really trust. I know they’re hearing this from folks on the inside. (None of my sources come from Apple directly, in full disclosure.)

Still, you only trust human intelligence so far. Even if one source tells you something, you always want to confirm it. So let’s turn to the data.

What Does the Data Say?

I’ve seen a few different nuggets of data since Apple TV+ launched. Take this “open source” intelligence from Bernstein Research via Bloomberg. According to Bernstein’s research, fewer than 10% of eligible Apple customers even signed up for Apple TV+; that comes out to about 10 million folks.

Viewership and sign-ups are two sides of the same coin. If a service can only get 10 million folks to sign up in the first place, the available folks to watch the shows is just smaller. Similarly, if the content isn’t resonating or buzzy, then you won’t get folks to sign up.

The data on direct viewership isn’t good either. Specifically, this backs up rumors I”m hearing that since the New Year Apple TV+ viewership continues to decline. When in doubt, Google Trends…

In other words, this look at Google Trends implies that Apple TV+ has never quite had the brand resonance as either Netflix or Disney. For Apple TV+, the name is clunky, which may hurt it in Google searches. So let’s look for specific shows instead. In the rumors, I’m hearing that Apple is seeing a big decline since the launch. So look at this chart:

In other words, the decay is real. It’s a little slower than Netflix or Amazon series, because the weekly release still generates news stories when the series concludes, which you see in The Morning Show. After it ended, though, it dropped off a cliff. Worse, the new shows aren’t launching nearly as well as the initial batch and accompanying marketing spend. And how do the Apple shows do compared to, say, The Mandalorian?

They disappear entirely. (The Witcher would show the same result.)

This matches other metrics that are publicly available. The volume of reviews on sites like IMDb and Rotten Tomatoes is fairly predictive of viewership. Not everyone leaves a review, but the more people who watch a show, the more reviews it has. You can see the decline in popularity in Apple TV+ in this metric too. I’ve divided it up by shows launched last year and shows launched this year:

If Apple TV+ was banking on something, it would have been Amazing Stories, an anthology series Apple touted from early on, because it features the talents of Steven Spielberg. Yet it came out and, well fizzled. Despite the headline talent, it’s currently Apple’s most poorly rated series.

What Does this Mean for Apple’s Plans?

The biggest challenge is just that Apple TV+ won’t have a lot of shows for the rest of the year, if the lack of announced shows is to be believed:

Normally, if a service doesn’t have a lot of originals, it has a lot of library content to tide customers over until the next big original. Applet TV+ doesn’t have any. A few weeks back, Tim Cook repeated that he’s not in the business of renting content. So they won’t be renting any library shows for customers to watch.

Apple’s content strategy doesn’t make sense. Netflix and Amazon had tons of licensed content to keep folks engaged while they built out originals. Disney+, HBO Max and Peacock will have loads of library content as originals ramp. Apple TV+ has none of that.

As a result, as soon as customers stop watching originals on Apple TV+, they stop watching Apple TV+. Then they forget about it. Even for a service that is free, if folks aren’t using it, it isn’t a good business.

Which is probably why that, of all the streamers, Apple TV+ has had the weakest performance in the Coronavirus world, according to one research firm.

Does this mean Apple will get out of the streaming game? Probably not. Even if their own streaming service fails (Apple TV+), they’re still heavily invested in Apple TV (the device and service to sell TV subscriptions). As for their streaming and their new shows? Something has to give; either they make a lot more shows and buy a library or Apple TV+ could go the way of Seeso.

The Entertainment Strategy Guy writes under this pseudonym at his eponymous website. A former exec at a streaming company, he prefers writing to sending emails/attending meetings, so he launched his own website. Sign up for his newsletter at Substack for regular thoughts and analysis on the business, strategy and economics of the media and entertainment industry.