Why 'Ted Lasso' Emmy boom may not let Apple TV+ catch up with Netflix, Disney

·4 min read

Apple TV+ (AAPL) delivered quite the performance at the 73rd Primetime Emmy Awards — securing 10 total wins and nearly sweeping the comedy category with its breakout series "Ted Lasso." Yet it remains to be seen whether that will translate into a new user boom for the fledgling streaming platform.

The show has been a particularly bright spot for the tech giant, which has struggled to compete against big players like Disney+ (DIS) and Netflix (NFLX) — in addition to converting free trial users who signed up through a complimentary promotional offer after purchasing Apple hardware. 

Apple's platform "needs to get the traction. They haven't gotten that yet [but its Emmy wins] are a step in the right direction," Manhattan Venture Partners' Santosh Rao told Yahoo Finance during a recent interview.

But the analyst warned that "there's still a long way to go" explaining how Netflix, Disney and others are spending a hefty amount of cash on original content — unlike the 2-year old Apple TV+.

Content wars heat up among Apple, Netflix, and Disney

Just this week, Netflix announced that it will be purchasing British novelist Roald Dahl's entire catalogue, which includes childhood classics from "Matilda" to "Charlie and the Chocolate Factory." 

Although financial details have not yet been disclosed, multiple reports believe this to be one of Netflix’s biggest purchases to date.

And this week, the company announced part 2 of its pandemic smash hit "Tiger King." The controversial series will roll out as part of Netflix's larger true crime slate, which will include four new docuseries and films set through early 2022. 

Yet, Apple TV+ doesn't appear to have that same content spending strategy. Rather, "Apple's strategy is more quality over quantity," Rao noted. "They need to produce more hits [like 'Ted Lasso'] and across other genres too, so there's still a lot of work to do but 'Lasso's' success definitely helps pull people in." 

Apple is looking to go narrow and deep with its content...Santosh Rao, Manhattan Venture Partners' Head of Research

Rao went on to say that Apple TV+ is not competing "on a mass scale" with the other platforms. Alternatively, the service is looking to "go narrow and deep with high class stars" from Reese Witherspoon and Jennifer Aniston to Paul Rudd and Tom Hanks. 

Yet the high-stakes content wars make it hard to imagine a platform that will be able to survive a crowded landscape without massive franchises like the Marvel Universe — or big titles like "Charlie and the Chocolate Factory" — let alone a platform that lacks the content quantity that consumers seem to crave. 

"It's absolutely difficult. You need that scale to really compete and stay sustainable in this business and be a competitive force in this business," Rao said. Only time will tell whether Apple will be able to sustain itself on that "go deep" strategy with top-level talent, or if the streamer might have to begin acquiring content outside of its own production house, he added. 

Regardless, "it's going to take a long time to really get the recognition that they want," Rao explained. 

"There's no way Apple will be able to catch up with the other streamers because those platforms are spending multi-billion dollars more than Apple is [on content.]"

Still, Rao emphasized that streaming is not the tech giant's core business. Rather, it serves as just another hook to get customers in the door. 

Apple is "coming to this whole market on a different track and with a different strategy, but I think the fact that they won something is good recognition, and if they come up with more shows like ['Ted Lasso'], they're going to keep people engaged within their ecosystem," he continued. 

Disney's subscriber growth warning

Meanwhile, Disney's stock took a hit on Tuesday after CEO Bob Chapek said at Goldman Sachs' media conference that Disney+ subscriber growth numbers will slow this year amid the Delta variant surge. 

Chapek warned that shorter-term growth projections will be impacted by COVID-induced production delays, leading to less content on the platform and more reasons for consumers to sign up for competitors like Netflix or HBO Max (T). 

"This is a temporary blip at this point as far as [Disney's] forecast goes," Manhattan Venture's Rao said. "I think it'll pick up again in the following quarters, but this is hitting everyone across the board."

Although subscriber momentum, fueled by the pandemic, will be difficult to maintain amid the crowded streaming field, Chapek said he still expects the streamer's subscriptions to hit its long-term targets. 

The company plans to hold a Disney+ Day on November 12, the day of the platform's 2-year anniversary.

Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193

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