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The competition in the streaming space

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Alexandra Canal joins the Yahoo Finance Live panel to discuss the latest streaming wars roundup following a week of big earnings.

Video Transcript

AKIKO FUJITA: Big earnings bringing in focus the competition in the streaming space. We've got new numbers out from Peacock, as well as Apple TV with Comcast and Apple reporting. Let's bring in Ali Canal for the very latest on that front. And Ali, we also got numbers out from AT&T which sort of give us an idea of how things are shaping up for HBO Max too.

ALEXANDRIA CANAL: Oh, for sure. I mean, HBO Max, Peacock, we have a really competitive space right now. Comcast was out with their earnings report yesterday saying that Peacock added 11 million signups last quarter bringing their grand total to 33 million. That puts it right on par with HBO Max which is right around 40 million users.

Now, HBO Max has also been gaining a lot of attention after Warner Brothers said that they would be releasing all of their 2021 movies on the platform the same day it hits theaters. Their first experiment with this was with "Wonder Woman 1984." And that was just a huge success. According to Nielsen, it was the number one streaming event when it made its debut on Christmas Day.

But going back to Peacock here, they still have a lot of room to run. These numbers don't even take into account the impact of the office which officially moved over to Peacock from Netflix on January 1 coming up in March. Peacock will have the entire library of the WWE. So there's a lot going on here.

But I do want to talk about one streamer that we haven't seemed to discuss that often and that is Apple TV Plus. Apple was out with their earnings this week. Service revenue hit a record high. But their CFO said that Apple TV Plus was quote, "immaterial to the results."

Now, one big problem with Apple TV Plus is that they have a lot of free loaders on the app. For example, if you go to an Apple store and purchase an iPhone or an iPad, you automatically receive one free year of Apple TV Plus. But according to some new reports, a lot of these users aren't going to go and convert into paid subscribers.

So MoffettNathanson was out with the new note. They partnered with a marketing analytics firm to survey 20,000 US adults on their streaming habits. And what they found was that 62% of Apple TV Plus subscribers were subscribed to that free offering through Apple.

Now, when you compare that with some of the other streamers out there, we have Disney Plus, they have a free promotion through our parent company of Verizon. Same with HBO Max. They have a lot of AT&T bundling offerings that offer that service for free.

Only 16% of respondents said that they are signed up through Disney Plus through that free Verizon promotion, whereas 23% said they were signed up for free for HBO Max. So Apple TV Plus really struggling to convert people there. Within that survey, 29% said that they do not plan to renew once that promotional window ends and pay that for $4.99 fee. 30% said they do, and 1% remained undecided here.

So Apple TV Plus-- that's something that they're really going to have to fix if they want to compete in the streaming space, because there are just a ton of competitors out there. We have Disney reporting earnings very soon. And I'm sure all eyes are going to be glued to that subscriber growth number for Disney Plus.

ZACK GUZMAN: Yeah, and Apple right now reaching session lows. If anything in that earnings report may have been a flag, a red flag was kind of them overlooking or not necessarily wanting to dive too deep on the Apple TV Plus side. But, of course, I mean, you think over at Disney, I'm one of those people who signed up through Verizon, as well, after I sampled it. It was free for a year. After I sample, I'm going to continue with it.

But all these platforms-- mostly because of "Soul," by the way, phenomenal movie-- all these platforms are dealing with the same issues that when we talk about production, Ali, to really feed the beast in getting more content out there. So what are the promises there in returning to production at some of these major studios?

ALEXANDRIA CANAL: Well, right now, Zack, it's looking pretty bleak. We're getting a clearer picture on how bad it was in 2020. FilmLA is out with a new report. They're the main filming and permitting offices in Los Angeles County. And according to them, 2020 was the worst year on record.

On-location film shoots were down 48% compared to 2019 levels. But there was one bright spot in this report and that was reality TV. So reality TV, it's a lot easier to film those types of shows amid all of these pandemic restrictions.

Filming really ramped up in Q4 of 2020, as production houses are really trying to get as much content out there as possible at a time where the bulk of filming was shut down. So reality TV was that one bright spot. But if we look at some of the other productions across the industry, pilot TV season, that was heavily impacted.

Pilot activity was down over 60%. Commercial shoots down over 40%, and then feature films down over 55%. So still not a great picture out there right now. Hopefully once pandemic restrictions ease, coronavirus cases start to slow down, we could see a more pickup in filming. But that's all TBD for right now.

ZACK GUZMAN: All right, Ali Canal, bringing us the latest on the streaming front there-- appreciate that.