We’re two months past the splashy debuts of Apple TV+ and Disney+, and moving into a new place neither company has dealt with much: the Churn Zone. Now, it’s time to see which streaming service can keep its initial momentum going for the long term.

Both companies have rolled out all the episodes of their breakthrough launch titles – The Morning Show for Apple, The Mandalorian for Disney – and reaped the rewards therein (three Golden Globe and three SAG Award nominations for the former, endless Baby Yoda memes for the latter).

Both companies also have seen a hefty rise in their stock prices. Apple is now a $1.3 trillion company, its stock at an all-time high of $300 per share last week and up around 50% from July, driven in part by optimism over its shift in focus to wearables and to services such as TV+.

And analysts for Bank of America and Rosenblatt Securities issued reports to start the new year saying Disney+’s subscriber signups appear well ahead of initial projections. That sent Disney stock up nearly 2.5% on the first day of trading in 2020, on top of a 31% rise in 2019.

But now what?

Having seen all episodes of whatever made them sign up in the first place, some viewers will dive even deeper into each service’s libraries and less prominent offerings (I recommend Apple’s For All Mankind or Dickinson, and Disney’s Togo and perhaps some of those Pixar movies you haven’t seen in a decade).

But other subscribers will dive out. Having seen what they wanted to see, they’ll  cancel their subscriptions and go hunting for other places to spend those entertainment dollars. Some won’t need to leave; they’re getting Disney+ or TV+ for free for a year because of one deal or another. But they stop paying attention for weeks or months, which is never a good sign when it comes time to actually pay for the service in 10 months or so.

And for those initial subscribers on a monthly deal, expect a chunk of them to do the streaming equivalent of the old Latin line: Veni, Vidi, Bingi, Beat It.

We’re moving into the Churn Zone, where people with month-to-month subscriptions decide whether to stick around when there’s not much new they really want to watch.

Netflix solves this problem by throwing more and more (and more) shows at you week after week.There’s always something new. In January alone, the company will debut more than 50 new or returning movies and series. It’s borrowing billions to pay for it all. But the new guys don’t want to go down that financial sinkhole, at least not yet. For all of Disney’s substantive library of big movies and Apple’s deep pockets, neither has a lot of new shows arriving for subscribers anytime soon.

How the companies manage the transition from launch to lull will make a big difference in their success over the next couple of years, particularly as other contenders like Comcast‘s Peacock and AT&T‘s HBO Max embark on their own splashy launches later this spring. Peacock, HBO Max and billion-dollar mobile video startup Quibi will use high-profile events at this week’s Consumer Electronics Show to start splashing.

Stuffing the Pipeline

So that probably means Disney and Apple need to stuff more stuff in the pipeline.

As BofA analysts wrote about Disney+ (in their peculiarly abbreviated investor-ese): “While anecdotal evidence of elevated library consumption on the service is encouraging (both for DIS and the syndication market at large), we cont. to believe more original content will be needed to drive subscriber acq. and retention efforts.”

As it is, fans of The Mandalorian won’t get any other new Star Wars shows, beyond another season of the animated series The Clone Wars, until late in the year.

It might be even worse on the movie side. Disney manipulated its film-release plans to stuff as many tentpoles as possible into 2019, so they’d be frontloaded into Disney+ in 2020. That led to a record $13 billion in box office last year for the studio, and some goodies for Disney+ in the first half of the year. But it’ll be slim pickings thereafter, The Hollywood Reporter warns.

So it’s no surprise that online stories already are popping up with topics like, “Now that you’re done watching The Mandalorian, consider switching to (competing narrative galaxy/streaming service) DC Universe for a while.”

Already, you can see both Apple and Disney making adjustments to this new phase.

For Marvel fans, Disney+ said it is moving up from spring 2021 to sometime this year WandaVision, a series built on Elizabeth Olsen’s Wanda Maximoff/Scarlet Witch and Paul Bettany’s Vision characters.

The company also rolled out a splashy video on New Year’s Day showing What’s Coming to Disney+ in 2020. The 61-second video features about 25 projects, including The Mandalorian season 2, the rebooted Lizzie McGuire, Marvel’s The Falcon and the Winter Soldier, several family-oriented series and animated shorts, and previously released features such as 2019’s The Lion King and Toy Story 4, a good bet to win this year’s best animated feature Oscar. That sounds good until you remember that those 25 projects still represent about half what Netflix is debuting this month.

The Library-Rotation Blues

On top of that, news just surfaced that a small number of Disney+ shows, including the two Home Alone movies. are no longer available. Existing rights deals mean more such to and fro of library titles over the next few years, something Netflix fans have long dealt with.The library-rotation experience appears more fraught for delicate Disney aficionados; as BGR.com put it, “fans are freaking out.”

They better get over it. The next few years are going to be a continuous, confusing shuffle of shows across competing platforms, with all of us desperately trying to figure out which new thing we should check out, and where, and whether we should dive off Service A and onto Service B for a month or two  to watch it.

Soon enough, these services will get bundled (as Disney+ already is doing with Hulu and ESPN+). That approach will give us access to all kinds of programming we’d probably enjoy, but not necessarily the exact show we thought we’d watch. How happy that makes restless-cord-cutters-turned-online-streamers will be a key issue for all the services.

We’ll have to make some new compromises: We won’t get everything, always (at least not without a lot of subscriptions), and it may not be cheaper than what the cable providers serve up. But we’ll have so much to watch, whenever we want to watch it, until we decide to watch something else somewhere else.

It’ll be great for us, mostly. But it’s going to be hell for the new services trying to catch and keep a subscriber base to pay for all their programming. Welcome to the Churn Zone.

 

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