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: A tortoise-and-hare story: How Apple beat Netflix to a best-picture Oscar despite its later streaming start

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It’s hard to think of Apple Inc. as the little guy, but the company has spent the past few years in the shadow of streaming giant Netflix Inc. and others.

Despite a vastly smaller programming library, though, it took Apple
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less than three years to achieve a feat that no streaming company — not even Netflix
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— had thus far accomplished. Apple became the first streaming company to take home a best-picture Oscar on Sunday, as its heartwarming film “CODA,” which follows the hearing daughter of a deaf family and her journey with music, nabbed the ultimate recognition.

Content is everything to Netflix, but it’s still a small piece of the pie at Apple, which sees streaming media as one leg of an effort to drive subscription revenue. Apple rolls out just a handful of new programs every month, whereas Netflix put out more than 70 Netflix originals in March. But Apple seems willing to spend up when it has strong conviction about the title, and it reportedly paid $25 million for the rights to “CODA,” according to Deadline.

See also: 5 things to know about ‘CODA’ — the Apple TV+ filmmaking Oscar history

Apple has the benefit of following behind Netflix, however. Netflix began producing original content for its streaming service a decade ago, and focused first on television shows instead of big-budget films. Still, it began to receive nominations for Oscars and other major awards within about three years, while having to overcome skepticism from Hollywood that had largely dissipated before Apple jumped into the arena.

Following Apple’s milestone media accomplishment, here is how its streaming success compares with the experience of Netflix.

Apple TV+

Launch: November 2019
Price: $4.99/month
Member base: Estimated 20 million paying subscribers
Revenue: Estimated $1 billion to $1.5 billion a year

Apple has been fairly tight-lipped about the performance of its Apple TV+ streaming service since the offering launched in November 2019, but the consumer-electronics giant took a victory lap Sunday after hitting its Oscars milestone. The company issued a news release highlighting its “historic Oscar,” with the best-picture victory contributing to a total of 240 wins at various awards shows since the service’s inception.

Apple TV+ beat rivals to the punch despite getting a slower start in the streaming world relative to lions like Amazon
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Prime Video, Netflix and Hulu. It did so also while appearing to be stingier about the content it acquires.

While Apple doesn’t disclose the count of titles it has on Apple TV+, the company isn’t as focused on volume as some of its peers. The company brought seven new titles to its service in March, according to CBS News. Netflix, by contrast, added scores of original titles in March and nearly doubled Apple’s monthly total on its busiest day alone.

Apple doesn’t report revenue figures for the Apple TV+ service. Its services segment, which houses Apple TV+ and other subscription-related offerings like iCloud and the App Store, brought in $68 billion in fiscal 2021. It’s unclear how much of that revenue came from Apple TV+, but Evercore ISI analyst Amit Daryanani estimates that the service generates perhaps $1 billion to $1.5 billion annually.

Opinion: How much does Apple make from the App Store? Even a landmark antitrust trial couldn’t reveal it

Apple likely is hopeful that the best-picture win can help it amass more subscribers in a crowded market. The company reportedly had about 40 million subscribers as of this summer, with roughly half of them actually paying for the service, according to the Information. (The company offers free trials to those who purchase new Apple hardware.)

Netflix

Launch: First streaming original premiered in 2012
Price: $9.99/month for basic plan, $15.49 for standard plan
Member base: 222 million global subscribers
Revenue: $29.7 billion last year

While Netflix did not win the race to the first Oscar win for best picture among the streaming services, its head start has given it more statues than other services. Netflix has had two nominees for best picture in each of the past three years, and eight nominees overall: “Roma,” in 2018; “The Irishman” and “Marriage Story,” in 2019; “Mank” and “The Trial of the Chicago 7,” in 2020; and “Don’t Look Up” and “Power of the Dog,” in 2021.

In fact, Netflix had a studio-leading 27 nominations at this year’s Oscars to Apple’s four, and its most high-profile movie at the awards, “Power of the Dog,” won for best director. Jane Campion was the second director to win that prize with a Netflix movie, after Alfonso Cuarón took home the prize in 2018 for “Roma.”

In-depth: Your streaming subscriptions reshaped Disney and turbocharged Netflix — now comes making more money off you

“CODA” wasn’t as widely viewed as Netflix’s “Power of the Dog,” according to Deadline, despite Netflix spending more on its best-picture marketing campaign — it reportedly spent more than the estimated $20 million to $25 million Apple invested on its “CODA” push.

Netflix remains in the lead in several key metrics despite being beat to the punch on best picture. Netflix is the No. 1 streaming service in subscribers, at 221.84 million, after adding 8.3 million net new paid members during its fourth quarter.

Netflix’s subscriber growth has waned as the COVID-19 pandemic has marched on, and the streaming service added 18.2 million new subscribers total in 2021, fewer than it added in just the first six months of 2020, when the virus first spread across the globe and caused a wave of shelter-in-place restrictions.

On the sales front, it again is the market leader. Netflix hauled in $29.7 billion in 2021, adding $7.7 billion in the holiday quarter. Apple doesn’t disclose financials for Apple TV+, but the service operates at a smaller scale. Netflix’s earnings were $5.1 billion, or $11.24 a share, for the fiscal year.

Netflix spent about $17 billion on content in 2021 and is expected to spend another $19 billion in 2022, according to Wall Street research firm MoffettNathanson.

From the archives: 15 years after IPO, Netflix has changed drastically — and is worth nearly 22,000% more

Netflix continues to command viewer loyalty worldwide — 70% of its desktop visitors watched it exclusively. But Netflix’s vise grip on the market has slipped the past two years as competition has escalated. From the second quarter of 2020 to the fourth quarter of 2021, Apple TV+, Disney+
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and HBO Max combined grew from 10.6% to 20.6% of global interest among consumers, while Netflix dropped from 55% to 45.4%, according to Parrot Analytics

With a market value of $166 billion, Netflix is about one-sixteenth the size of Apple’s $2.85 trillion.

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