Apple Has 'No Excuse' To Be Trailing In SVOD Space, Netflix Co-Founder Says While Praising Disney

Apple Inc. AAPL has “no excuse” for not being able to find footing in the streaming video-on-demand space and is “still not in it with both feet,” according to Netflix Inc. NFLX co-founder Marc Randolph.

What Happened: Randolph in an interview with Yahoo! Finance on Thursday noted that with a $2 trillion-plus market valuation and $200 billion cash in cash, if the Cupertino-based consumer electronics giant “ spent one quarter as much time on content as they do on giveaways they really could play.”

The Netflix co-founder noted the high churn rate for Apple and said the company needs to give customers “a reason to stay.”

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Meanwhile, Randolph was all praise for the Walt Disney Company DIS. 

“I completely have the deepest respect right now for Disney,” he told Yahoo! Finance, adding that the entertainment veteran’s moves like restructuring the business and deferring dividends shows its commitment to content.

According to Randolph, these are “clever” moves on Disney’s part, and the Burbank-based giant is “emulating the Netflix playbook.”

Why It Matters: Disney on Thursday reported having 94.9 million subscribers for its SVOD service Disney+ as of Jan. 2, compared to the 26.5 million subscribers reported in the same quarter a year ago.

Netflix reported having 204 million subscribers at the end of 2020. 

Wedbush analyst Dan Ives in April last year estimated about 30 million to 40 million subscribers for the Apple TV+ service, although official numbers aren’t available.

Apple provides one year of free subscription to the SVOD service to buyers of its devices. According to MoffettNathan’s Q4 2020 SVOD Tracker report last month, as reported by Variety, 62% of all Apple TV+ users are on this free plan.

Only 30% of these users said they would continue their subscriptions at the regular price of $4.99 per month. About 29% said they would not continue and the rest were unsure.

Price Action: Apple shares traded 0.47% lower at $134.50 in the pre-market session on Friday. Netflix traded slightly in the green at $556.64 per share. Disney shares were up 1% at $192.83.

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