When Apple TV+ launched in 2019, Apple was gracious enough to include a year‘s worth of free service for eligible customers. And then the company decided to extend that trial not just once, but twice, and that may ultimately be a problem for the company moving forward.
According to research firm MoffettNathan’s latest SVOD Tracker report (via Variety), a majority of Apple TV+’s customers are still utilizing a free trial of some kind. Specifically, according to the report, a “whopping 62%” are on a free trial. That’s probably a brutal reality for Apple at this point, especially as it extends those free trials until July of this year.
The tough part to juggle? Customer retention. And according to the research, Apple may want to try and work on that before the free trial(s) wind down. MoffettNathan’s report says that 29% of respondents don’t plan on renewing their subscription after the free trial ends. The good news here is that 30% said they do plan to renew at the standard price (which is $4.99 per month).
Meanwhile, the rest of the respondents were still on the fence of whether or not they’d renew.
A tale of free trials
The report looks at the primary competition as well. For instance, Disney+ has a free trial offer that Verizon customers can take advantage of. However, only 16% of respondents said they were using that free trial. And HBO Max is free to certain AT&T customers (depending on their plans with the company). But 23% of those customers are using that free trial.
(It’s worth noting that with AT&T’s best possible plans, HBO Max is just a permanent perk. And while Verizon is offering six months of free Disney+ for customers (and then $6.99 per month after that), the wireless network also offers the Disney package, bundling Hulu, Disney+, and ESPN+ at no additional cost for customers on select unlimited plans.)
However, when it comes to renewing, 48% of respondents said they plan on resubscribing to Disney+ once their free trial with Verizon ends, and only 19% said they don’t plan to renew. So, comparing Disney+ and Apple TV+, the customer churn is roughly 3% and 18%, respectively.
Per the report:
We remain concerned about future subscriber churn if there is a slow device cycle and users choose not to renew on their own,” the MoffettNathanson team led by senior analyst Michael Nathanson wrote in the report. While Disney and WarnerMedia have been “clear about strengthening their respective content offerings, it seems Apple is still not all-in on making Apple TV Plus originals a focal point.
It’s (probably) about the content
It is not a secret that when it comes to content, Apple TV+ is outpaced by its major competitors in the streaming market. Apple TV+’s library of series, films, and documentaries is certainly growing –with a lot more on the way– but Disney and AT&T and the other companies aren’t sleeping on what they have. They’re all working on original content. In fact, HBO Max will see day-and-date releases for WB’s biggest theatrical releases through the entire year of 2021, at no extra cost to subscribers (whether they’re on free trials or not).
However, that isn’t to say what Apple TV+ is bad. That’s certainly not the case. While early reviews for shows like The Morning Show, See, For All Mankind, and Dickinson were shaky, by the time those series’ first seasons wrapped up things were looking a lot more positive.
And then shows like Trying, Servant, and Defending Jacob landed on the streaming service and certainly offered far more positive takes from critics and customers. We certainly can’t forget about Ted Lasso, which has basically been universally praised since its release. And film releases like Greyhound helped lift the service, too.
Still, once you watch those shows there’s not much else going for Apple TV+, which could make keeping the subscription active not so worthwhile to some customers.
What about you? If you’re using an Apple TV+ free trial, do you plan on resubscribing when it lapses?