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Apple TV provides dubious benefits to Starz

Apple TV

Lionsgate is banking on the Apple TV app to help it reach its lofty international subscriber goals for Starzplay. The truth is, in markets where Amazon is present, the etail giant is a better bet. In markets where Amazon isn’t, Google’s Chromecast could be a better play.

Lionsgate has big plans for Starz

As the rumors persist that Starz may be sold to CBS, Lionsgate – the channel’s owner – says it has big expansion plans for service. Speaking on Lionsgate’s first-quarter earnings call, company CEO Jon Feltheimer said that:

“with only 5% penetration of subscription video-on-demand services worldwide, we believe that the international market is a US$45 billion opportunity for us that will result in between 15 million and 25 million new Starzplay international subscribers by 2025”.

A key strategy for achieving such spectacular subscriber growth is partnering with the newly minted cross-platform version of the Apple TV app. Apple announced in March that it would port the Apple TV app to many other devices outside of the Apple TV streaming media player (SMP.) It has announced Samsung smart TVs, Roku, and Amazon Fire TV will all be supported.

Starzplay will soon be available through the Apple TV app, giving it a massive bump in reach. Mr. Feltheimer says it will be available in 51 countries. Starzplay is already available through Amazon Channels in the UK and Germany. As well, Starzplay Arabia is available throughout the Middle East and Africa.

The value of Apple to Starz rests with the hardware

Apple iOS remains the second most popular mobile operating system throughout much of the world. Since the Apple TV app is available on iOS, Starzplay gets immediate access to millions of people through their phone. However, most viewers will prefer to watch Starz content on their TV.

The Apple TV app is already available for Samsung Smart TVs. It will also arrive on other TV-connected devices. However, the number of people that will want to use the Apple TV app on those platforms is unclear. For example, Fire TV users already have access to a broad array of SVOD channels – including Starzplay – both within the app store and through Amazon Channels in the Prime Video app. As well, people can access Prime Video on their iPhone if they have one.

Today, integration with the Apple TV app only helps Starz reach people using the Apple TV streaming media player. Moreover, if Apple can’t convince people to use the app on other streaming devices, integration with the app brings no real benefit at all.

Apple TV box second to Fire TV in key markets

smp market share germanyThe Apple TV box is available in both the UK and Germany. However, it is far behind Fire TV in those two markets. According to new free nScreenMedia research, in Germany, Apple TV is the second most popular SMP but is far behind Fire TV. 61% of online TV use Fire TV and 17% use Apple TV SMP. In the UK, Apple TV SMP is in third place with 18%, behind the Now TV box from Sky (20%) and Fire TV (39%.)

SMP market share SwedenEven in markets where Fire TV is not available, Apple TV plays second-fiddle to Chromecast. For example, in Sweden, 60% of online TV viewers use Chromecast versus 34% for Apple TV.

In the markets where Amazon is available, the etail giant is a much better partner for Starz than Apple. Aside from Amazon’s considerable superiority in the SMP market, it is a master at marketing SVOD services to its customers. It also has a proven record of delivering subscribers for its partners. In countries where Fire TV is not available, in addition to working with the Apple TV app, Starz should work for closer integration with Google Play and Chromecast.

Why it matters

Starz is hoping the Apple TV app can help deliver a massive growth in International subscribers.

However, Amazon is a much better partner in the markets where it is active.

In other markets, Starz should figure out how to leverage Google Play and Chromecast as well as Apple.

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