Apple told a showbiz syndicate it has less than 20 million TV + subscribers

Apple Inc. CEO Tim Cook smiles as he talks about Apple TV + during an event at the Steve Jobs Theater in Cupertino, California, United States, Tuesday, September 10, 2019.

David Paul Morris | Bloomberg | Getty Images

Apple has claimed that its TV + service had less than 20 million subscribers in the United States and Canada as of July, which allows it to pay the behind-the-scenes production team lower rates than streamers with over subscriptions, according to the International Alliance of Theatrical Stage Employees, a union that represents television and film workers who perform tasks such as operating cameras and building sets.

Apple has never revealed subscriber numbers for its Apple TV + streaming service, which launched in fall 2019. Analysts are reluctant to come up with estimates, but many say its scale is pale compared to services like Netflix, which had 209 million subscribers in the second quarter, and Disney +, which had 116 million.

The fact that Apple can pay a discounted rate despite being the world’s most valuable publicly traded company highlights some of the issues Hollywood workers face as streaming supplants linear TV and movies. , and arouses the anger of union members who decide to strike for better wages and working conditions.

Under the current contract, big-budget streaming productions may offer lower rates to workers if the streaming service has less than 20 million subscribers in the United States and Canada, which is determined on July 1 of every year. Apple told IATSE it has less than 20 million subscribers, a union spokesperson said.

The union is currently in negotiations with the Alliance of Film and Television Producers on a new contract. Apple is a member of the alliance, but the alliance negotiates for all of its members and does not create waivers for specific companies, according to a spokesperson for the industry group.

An Apple spokesperson declined to comment on the number of subscribers, but said the company pays rates in line with major streaming services.

Under the current contract, productions made for streaming services are governed by less stringent working conditions than traditional TV shows or films, as the profitability of streaming is “currently uncertain” and the productions needed to. greater flexibility, according to a copy of the contract reviewed by CNBC.

But union leaders argue that streaming is no longer a particularly new form of media and that companies that fund streaming productions should pay rates closer to traditional media productions.

“Workers on some ‘new media’ streaming projects are paid less, even on productions whose budgets rival or exceed those of traditional blockbusters,” an IATSE press release said this week, noting that negotiations were to the point of death.

The IATSE is preparing for a strike, its spokesperson said, and ballots allowing 150,000 union members to authorize a strike will be sent out on October 1.

While new media pay rates are one of the issues currently being negotiated, the most pressing issue concerns working conditions on set, including long working hours, which have worsened during the pandemic. of Covid-19, the union spokesperson said. Celebrities and actors have started posting social media posts supporting the IATSE union and a potential strike.

Apple has reportedly spent up to $ 15 million per episode of shows like “The Morning Show” to try to bolster its service with premium content. Apple also bundled free trials with the purchase of new phones or tablets, and those trials started expiring in July, forcing many users to decide if it was worth $ 4.99 per month. Apple sold around 206 million iPhones worldwide in 2020, which would represent a lot of free trials.

NBCUniversal’s Peacock and ViacomCBS’s Paramount + also have less than 20 million subscribers, allowing them to claim workforce discounts, the union spokesperson said.

A spokesperson for ViacomCBS said the company is not disclosing Paramount + streaming numbers. NBCUniversal had no comments per post hour.

Disclosure: NBCUniversal, which owns and operates Peacock, is also the parent company of CNBC.

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