Freebies and deep discounts intensify streaming war to take on Netflix

If you make it free, will y come? Apple, Disney and AT&T’s WarnerMedia want to jump-start ir challenges to Netflix by offering freebies and deep discounts on emerging streaming plans which includes a free year of Apple TV Plus for customers of new Apple devices and a free year of Disney Plus to higher-tier Verizon customers. Some existing HBO subscribers will also get super-charged version, HBO Max, at ditional cost.

Streaming competition

Experts say se services can worry later about holding onto customers — perhaps by offering must-see shows y can’t get anywhere else or tying discounts to or services that are difficult to drop. “Next year is a race to aggregate consumers,” said Kevin Westcott, who hes Deloitte’s U.S. telecommunication, media and entertainment consulting business. “ first war is getting m to sign up for a service. second war is retaining m.”

new services have to attract users with marketing blitzes and promise of original shows and movies, n build a big eugh library of old favourites to help keep m. Alrey, HBO Max will have “Friends ” exclusively, and Disney is taking back its older movies from Netflix. A lot of shows and movies won’t be available at launch but will be ded over time. Free helps in meantime. Netflix has spent years building up its 158 million subscribers worldwide. Hulu has 28 million. new players want to ramp up subscribers quickly to show y can compete.

So services have launched digital equivalent of old cable promos: lure you in with discounted rates, n jack up price after a year or two. But digital customers have more choices than cable customers of yore so a big question is wher y’ll stick around. Apple TV Plus debuts Friday for $5 a month with just nine shows and a few more coming soon. It’s alrey cheaper than $13 a month Netflix charges for its most popular plan. Buyers of any new iPhone, iP, Apple TV, Mac or iPod Touch get a year for free. That suggests a market of 40 million customers, Wedbush analyst Dan Ives said.

Disney Plus, which arrives v. 12, is also cheaper than Netflix at $7 a month. Disney struck a deal with Verizon to give customers of all unlimited wireless plans and some home-internet customers a free year. Members of Disney’s free D23 fan club were also eligible to buy three years of Disney Plus service upfront for price of two years. Disney is targeting 60 million to 90 million worldwide by 2024. AT&T’s HBO Max, which launches in May for $15 a month, is most expensive of new services. That could make it tough for AT&T to reach its goal of 50 million U.S. customers and 75 million to 90 million worldwide by 2025.

But AT&T will make service free for about 10 million existing HBO subscribers, or about a third of its U.S. subscribers. HBO Max will also be included with AT&T’s higher-tier wireless and broband offerings. Comcast’s Peacock service will be free for many of its own cable and internet customers. regular price hasn’t been anunced yet. service launches next spring.

“I don’t think customers are going to have to make difficult choices about cutting one in order to d ar for first few years,” said MoffettNathanson Research’s Craig Moffett. But companies can’t run services at a loss forever, and when discounts end and prices rise, customers may flee. After all, services d up fast, and signing up to multiple ones could end up costing as much as cable packs people are ditching for streaming.

re’s a lesson to be drawn from latest TV-industry attempt to counter cord-cutting. Cable-like online packs like Sling TV and YouTube TV have ended discounts or raised prices, causing customers to flee and new sign-ups to slow down. Sony anunced Tuesday that it will quit offering PlayStation Vue, one of first to challenge tritional TV packs. Even dominant player isn’t immune. Netflix has raised prices slowly, which helped shield it from price shock, but its latest small increase has hurt customer growth. Westcott, Deloitte consultant, compared streaming promotions to efforts to lure wireless customers from competing companies. T-Mobile has long offered Netflix free to many customers. Verizon includes six free months of Apple Music with some of its unlimited plans. Many offer or deals like paying off your phone early or getting a phone for free if you switch.

“y were constantly looking for ways to steal you off or players,” he said. How will se services keep users once y’ve reeled m in? companies can constantly refresh ir services with new shows and movies, Diffusion Group president Michael Greeson said.

Cathy Yao, an analyst at Diamond Hill Capital Manment, also said companies can try to create “stickiness” by bundling services with or products and services so a customer is less inclined to unsubscribe. For example, including HBO Max with wireless and broband services will make consumers more likely to stick around for all three, Yao said. It’s similar to how Amazon packs its streaming service with its $119-a-year Prime loyalty program.

Ultimately, content will be king, experts say. services are investing billions into creating new shows and building up ir libraries to find or create next “Stranger Things.” Apple TV Plus inked high-profile deals with Oprah Winfrey, Reese Wirspoon and Jennifer Aniston. Comcast’s NBCUniversal reportedly paid $500 million to take back “ Office,” and Netflix reportedly paid even more to claim global rights to “Seinfeld.” “ weapon of choice for retention is exclusive programming,” said Peter Csathy, founder of Creatv and an industry consultant. “All of se behemoths are investing billions of dollars in originals with hope of finding next ‘Game of Thrones’ that becomes ‘Must See TV.’” [Except heline, modifications have been me to original AP wire].