1. Is Anyone Paying For Flixes?

Earlier this week I got an email from Apple letting me know they’d extended my free trial of Apple TV+ by another three months. While I appreciated the kindness, I did note that it was very much in line with some new stats from MoffettNathanson that indicated that 16% of Disney+ subs are still getting the service for free, thanks to the Verizon promo, and that 26% of all HBO Max subs are currently subsidized by AT&T.

Both those numbers paled in comparison to Apple TV+ however, which, according to the same study, has 62% of its subs reaping the benefits of Apple’s “everyone who buys an Apple product gets a free year of Apple TV+” promo.

Why It Matters

Consumers are not going to subscribe to all nine Flixes at once. (Well, most consumers, anyway.) So as they figure out which services they want, trialing becomes very important and “free” has long been proven to be the best way to get anyone to try something.

Hence Peacock’s move to push the free version of the app at launch, and the deals many of the Flixes introduced via mobile carriers. There is also the assumption that many viewers will forget that they signed up for a subscription, and/or that the amount in question (Apple TV+ is just $5/month) will be low enough that many just won’t bother to actually unsubscribe once the trial is up.

The key with all of these freebies, however, is to convince the user that the service is actually worth paying for and to collect data on their viewing habits so as to surface content that they may be interested in watching every time they open the app as a way of reinforcing that perception.

The fact that the press and investors rarely distinguish between paying and non-paying customers doesn’t hurt either, as all nine services compete to claim the largest number of subs.’

Apple is smart to give the service away right now, as they are definitely the toughest sell out of the nine in that there’s just not a whole lot of “there” there. While the other Flixes have thousands of hours of programming available from both library series and originals, Apple TV+ feels like one of those SoHo boutiques that have five carefully curated shirts  hanging from a stylized rack in an otherwise pristine gallery-like space.

That said, we have not seen the end of the free deal bonanza and as subscriber numbers rise and fall according to the whims of the audience and the success and failure of big budget original series, you can be assured they will reappear again.

What You Need To Do About It

If you’re one of the Flixes, remember that email addresses are almost as valuable as subscription dollars. You can use them to upsell, to promote and to target advertising, three activities that help your bottom line.

If you’re an investor, remember to take the number of free subscriptions into account and look at how many hours people are spending on the service as well, a good sign that they’re not going to be giving it up any time soon, even if they have to pay. Also remember that HBO’s $15 monthly charge is a different animal for many consumers than Apple’s $5 charge, so that freebie offer is potentially more troubling.

If you’re a consumer, remember to keep track of your freebies and cancel the ones you’re not watching before your free trial expires. Which is admittedly easier said than done.

2. vMVPDs Get Hot (For Now)

A new study from Parks Associates reveals that a whopping 43% of households are planning to switch to vMVPDs this year, a category I’m willing to bet few of them were even aware of a year or two ago, a supposition backed up by a further finding from the same study that reports 17% of current vMVPD subscribers made the switch during the last 12 months.

Why It Matters

One of our TVREV Fearless Predictions for 2021 was that vMVPDs would get hot for the next year or two as consumers looked to get rid of traditional set top box pay TV, our theory being that many of them would not be ready to make the more radical move to streaming only right away, and that even with vMVPD prices rising, they still offered considerable savings from traditional MVPD packages, with the additional benefit being viewers didn’t need to switch inputs every time they wanted to watch Netflix.

Gradually, however, those same viewers are going to realize that they rarely, if ever, watch the vMVPDs, given that all the shows they usually watch are now available on one of the Flixes. 

Gradually being the key word here--nothing ever happens quickly in TV land, and the persistence of sports programming on MVPDs and vMVPDs will prevent many viewers from switching, at least during the season of whatever sport(s) they follow.

Still, with vMVPD bills rapidly approaching the $75 mark and even less expensive options like Sling raising prices, I suspect many consumers are going to make the decision to give up their vMVPD subscriptions a few years down the road...unless the vMVPDs can provide them with an attractive low cost option that contains programming they can’t find on one of the Flixes.

What You Need To Do About It

If you’re a vMVPD, make hay while the sun shines--people are looking to get rid of cable and so make it as easy for them as possible. The newest group of potential customers may not be all that familiar with how to get standalone broadband service, so maybe strike some deals for them on that front--the MVPDs may be amenable given how much of their profit now comes from broadband.

If you’re a consumer, vMVPDs are a good easy initial step to breaking your pay TV addiction and you won’t be aware of what you are giving up going from 800 channels to 80.

If you’re a local broadcaster and you haven’t gotten on the vMVPD train yet, you are losing potential viewers, something you can ill afford to do at this juncture, so get on board.

If you’re a smaller MVPD, strike a deal with one or more vMVPDs to bundle their TV service with your broadband. You will likely find many takers and a bundle of that sort creates much stickiness