1. Apple Music Is Not Really Beating Spotify

You may have read a story this week that said that Apple Music was beating out Spotify, in the US, anyway. You would have been correct to have been skeptical of that story though, as it made use of a very misleading stat.

Yes, Apple Music has more subscribers than Spotify. But that’s because Spotify has two versions, and the non-subscription, ad-supported version is far more popular. It’s particularly more popular with younger listeners and it’s why Spotify maintains a 47% to 14% lead over Apple Music with that key demographic.

Why It Matters

On a macro level, much of what is written about the media industry is written by people who have limited understanding of the media industry. They just know what some PR person told them, don’t understand what questions to ask, and thus often come up with factually incorrect stories that nonetheless garner a whole lot of clicks.

We see this a lot with “studies” and “predictions” about the TV industry. Many of these “studies” will throw TV platforms like Hulu and CBS All Access and even Sling and YouTube Live TV into the “digital” pile because they are delivered digitally and so, duh, they're like digital. And so an episode of Game of Thrones watched via Roku on HBO NOW gets thrown into the same bucket with a 40-second cat video while the same episode of Game of Thrones watched via a Comcast set top box gets thrown into the TV bucket. Even if both GoT episodes were watched on the same TV set.

So there’s that.

On a micro level, it matters because there have been a spate of rumors as of late that Apple will indeed bundle its TV content together with Apple Music and some random other goodies that nobody actually wants, like iCloud storage and online magazine subscriptions.

But the TV show thing is interesting because it will likely be far more challenging for them to get people to switch away from Spotify than they seem to realize. As in we can see people actually subscribing to Apple Music for the TV shows but keeping Spotify for their music needs.

That’s partly because if you’ve been using Spotify for years, you’re kind of used to its quirks and you have all your music arranged into the playlists you want and you know which of the multiple Daily Mixes you like and setting up something new is a hassle, especially if, like Apple Music, it kind of sucks.

There’s a bigger ding on Apple and its worldview in this too: for years, Apple could go into a market and release a new product, confident that people would flock to it because it was better and (just as important) better designed. They’ve lost that advantage though and Apple Music just doesn’t offer up much of an improvement over Spotify. It doesn’t work with Alexa or Google Home either, because Apple and walled gardens. 

So there’s that too.

What You Need To Do About It

Be skeptical of all the various stats and studies and surveys and predictions you see in the trades.

Look at how many people they actually surveyed, what those predictions are based on, what they lump into “digital”, what they consider to be an ad, and what they consider to be a “view” of an ad.

And if you’re Apple, stop relying on walled gardens. You make great hardware, but when your software sucks, as it often does, you don’t win any friends by trying to force it on people. (And FWIW, I’m writing this on Pages, but I also know I’m one of that program’s few fans.)

 

2. Netflix Stumbles A Little

Netflix’s subscriber numbers were not what they should have been for Q2 and Wall Street was all like “the sky is falling!”

Wall Street needs to chillax a little. Hard to do these days, but while Netflix has potential problems, sometimes a subscriber hiccup is just that.

Why It Matters

Because OTOH, it might not be a hiccup. In the same way that DVR penetration never went much over the 50% barrier, there may just not be that many people in the US who feel they need Netflix. Given the vast amount of buzz the service has already received, it stands to reason that anyone who hasn’t forked over their $10/month yet is going to be a much harder nut to crack.

And while Netflix is indeed spending $13 billion on new programming, there are a whole lot of asterisks we have around that. You can read the whole thing here, but the TL;DR is: (a) 700 new series is a whole lot of new series to promote. Most will fail and that money will be a write-off as no one is subscribing to see ten episodes of a show with no second season. (b) The Comfort Food Factor—it’s easy to get someone to watch two hours of The Simpsons as they know what to expect and who the characters are. A new series is a much bigger ask, especially if the viewer has a whole mess of “I need to watch thats” already lined up. (c) The window that Netflix has to promote these new series is very tight—it’s more like a movie window and if you don’t get some buzz going right away, the series is likely to fade into the sunset. There’s no place for TV's traditional “new episode this week” style marketing to draw people in. and that promises to be a problem. (d) Netflix relies a lot on its algorithm to promote its shows and the more people watch by saying “Alexa, show me ‘Stranger Things’” the less likely they are to see said vaunted algorithm. (e) $10/month is a lot of money in places like India and Indonesia and Netflix does not seem to be prorating the subscription price.

So there’s all that and it’s why we’re feeling that Netflix might not be the slam dunk some people think it is.

What You Need To Do About It

If you’re a network or studio, stop selling your library content to Netflix and keep it for yourself. (But you already knew that.)

If you’re Netflix, you might want to consider investing in some sort of brand campaign on the order of “It’s Not TV, It’s HBO” as a way to reach all those holdouts, especially the ones in the U.S. Targeted marketing is great and all, but sometimes you need a big idea.