Apple leans on devices business in global battle against Disney, Netflix

The big question is whether those customers will stick around after the free trial ends.

Ahead of the announcement, analysts and investors viewed Apple, which is late to the streaming war, as facing a tough fight competing with Netflix Inc and Walt Disney Co's Disney+. Apple is also trying to win out over HBO Max with its hit shows like "Game of Thrones," "Friends" and "The Sopranos."

Apple's offerings are dwarfed by the extensive catalogue of industry leader Netflix Inc, which has a reported $10 billion budget for content and 151 million paid subscribers.

Walt Disney Co's Disney+ - launching Nov. 12 - has helped lift the stock almost 20% in recent months. Disney boasts a deep library of Marvel's superhero hits, the Star Wars universe, "Toy Story" creator Pixar animation and the National Geographic channel.

Disney+ has a budget of over $1 billion for original content - a figure that will grow to around $2 billion by 2024. It is priced higher than Apple TV+, at $7 monthly or $70 annually. A bundle that includes ESPN+ and Hulu will cost $13 per month.

Media executives and analysts believe that most households are willing to pay for more than one streaming service. Many believe subscribers are unlikely to cancel their Netflix subscription to pay for other services to pay for Disney+, instead of subscribing to both. IAC chairman Barry Diller told CNBC in July that Disney has the best chance of catching up to Netflix “because of its very, very popular content.”

Apple will not directly compete with Amazon Inc's Prime Video because that service is bundled with other perks of Prime membership - most significantly, free one- or two-day delivery on most Amazon orders.

Next spring, Apple will face another significant rival in television: HBO. AT&T-owned WarnerMedia’s forthcoming HBO Max, likely priced at $16 to $17 per month, has a library of HBO, Warner Bros and other content, and is investing in original content as well.

Apple, which is spending $2 billion on original content this year, is sitting on $210.6 billion in cash. “Apple has the firepower to outspend a company like Disney by a wide degree,” said media analyst Rich Greenfield. “If Apple makes great content, people will subscribe.”

For now, Apple TV+’s greatest advantage is its reach and its scale. With 1.4 billion devices worldwide, free service on most new device sales and a November launch in over 100 markets, it has the potential to do what no other service has done: be everywhere on Day One.