Are you keeping up with the latest in the streaming wars?
If so, you probably already know that the numbers grow and change constantly. And while there are many numbers that matter, one that matters most is subscriber growth. But if you’re trying to keep up with the numbers of subscribers for Netflix and Disney+, you might be surprised to learn that both streaming giants only release those numbers quarterly, meaning we can only guess at what those numbers really look between those quarterly releases of information.
Enter the third-party tabulating firms like Apptopia, Sensor Tower, and App Annie who were once used only to track mobile app downloads. These firms are now playing vital roles in determining the actual success of the contenders in the streaming wars.
That information will become more valuable than ever before this year as two more streaming services throw their hats in the ring–AT&T’s WarnerMedia and Comcast Corp-owned NBCUniversal.
Firms gather data about mobile downloads, apply algorithms to further analyze that date and then sell that data. The numbers at which they arrive for subscriber growth are more approximations of mobile downloads, rather than figures that correlate exactly with subscriber growth. But it’s influential information nonetheless.
Data from third-party firms is widely used in the press by the likes of Reuters, Bloomberg, Wall Street firms like Credit Suisse, Bank of America and Wells Fargo.
On November 26, two weeks after the launch of Disney+, Apptopia had just released data that indicated Disney was seeing an average of one million new subscribers each day. That information sparked a 2.3% rise in Disney shares to $153.43 USD per share, setting a new record high.
It’s clear that third-party data moves markets.
But the data can be somewhat controversial as critics say that these tabulating firms don’t do a great job at keeping track of how many subscribers cancel their services after signing up, meaning that the data can be misleading at best. Critics say that because of this, the firms’ data shouldn’t be used in understanding the streaming services’ actual subscriber growth.
Michael Nathanson, analyst for MoffettNathanson says that if his firm had based its conclusions on app download data, they would be “very incorrect about what Netflix is doing and everything in any given quarter.” He says his firm used to use data from Apptopia and Sensor Tower but has since stopped doing so for this reason.
But execs from Apptopia and Sensor Tower say that their data reflects trends, rather than precise growth. They say that people like and trust mobile data because mobile gets the most screen time. “It’s indicative of how people are living their lives,” says Adam Blacker, a vice president at Apptopia. He says his firm is “nailing the trends and the percentage swings.”
Over recent quarters, Netflix mobile download data from Apptopia and Sensor Tower has been off in many ways.
For example, Apptopia showed negative growth in mobile downloads for Netflix in the 2nd and 4th quarters of last year. That’s in contrast to the 22% and 24% increase in global paid memberships that the company reported for those same quarters.
Sensor Tower head Randy Nelson says his firm only looks at mobile data, that they only capture the first-time install and that their figures are only estimates.
Blacker says his firm won’t be right 100% of the time. “We’re not going to tell you to trade on download data,” he explained.
But Nathanson says that’s what stocks are traded on: “I think everyone’s looking for an edge on subscribers,” says Nathanson. “These stocks trade on subscribers.”
If information about subscriber numbers isn’t comprehensive or exactly accurate, should it be publicly reported? What do you think?
Source: Financial Post