Sure, overall billion-dollar TV-movie content spending is important -- Netflix, Amazon, Apple and Disney do that. Additionally, big dollars are spent on marketing. Big brand awareness? New services such as Disney and Apple have that, too.
But there is one area -- perhaps an unsexy area -- that all direct-to-consumer businesses need: a credit-card number. Easy purchases can move mountains.
John Malone, chairman of Liberty Media, and longtime major cable TV executive, believes Disney need this the most. Speaking to CNBC, he said: “Their challenge is to get people’s credit cards. They have no large direct consumer relationship. So they’re going to have to piggyback on the backs of people who do. Like [with] Verizon.”
Verizon has a deal with Disney providing its customers a free year of Disney+. At launch, Disney+ surprised many analysts: It signed up a massive 10 million subscribers in one day -- causing big outages.
This isn’t to say Disney is on the back foot. Five years from now, Malone believes Disney and Netflix will be around. “Disney [has] terrific content and tons of it and a great brand globally.”
And it may be in a better position than Apple -- again because of credit cards. Malone says: “Essentially, anybody who buys anything from Apple gets a free trial for a year. And, of course, Apple already has their credit card.” That is, around 460 million credit cards -- 460 million consumer relationships -- and around 1.5 billion worldwide devices.
All this can yield big consumer first-party data when looking at streaming video subscriptions and TV program viewing.
“[Consumers] get to use it for a year, and then they put it on your bill,” Malone says. “That’s a very interesting way to get large numbers fast... Then they can gauge what people like, what people don’t like. They can go out and acquire or build more content.”
Also, Apple has the wherewithal, in terms of cash at hand, to ramp up TV program content quickly.
While Amazon has the same thing going for it -- a credit-card connection from more than 100 million U.S. Amazon Prime memberships -- Malone doesn’t believe all Amazon’s focus is on premium video content.
“It’s not his primary business,” he says of Amazon CEO Jeff Bezos. “You know the free shipping is very powerful, a lot of glue. Content that’s unique is kind of a marketing tool for that.”
Even though Amazon, like other premium streaming services, continues to spend billions on original TV and movies -- about $6 billion this year on content, according to one analyst -- Malone says:
“I think Amazon evolves to be a bundler of other people’s services, with less of their own and more of other people’s [content] ... The real pay day is the relationship with the customer and the information about the customer and being a gateway.”
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