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Streaming wars just warming up

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Robert Iger, Chief Executive Officer of Disney, poses in “Star Wars: Galaxy’s Edge” during a media preview event at Disneyland Park in Anaheim, California, May 29, 2019.

Mario Anzuoni | Reuters

Disney+ is here, ushering in the unofficial kickoff to “The Streaming Wars” — the slew of monthly subscription services that are flooding the market to win your last incremental entertainment dollar.

But in reality, “war” is a misnomer for what’s about to happen in the world of streaming video. Perhaps there will be a day, years from today, when Disney+, Netflix, Hulu, Amazon Prime, AT&T‘s HBO Max, a hypothetical melded product from CBS and Viacom, Comcast-NBC Universal’s Peacock, a service from Discovery Communications, Jeffrey Katzenberg’s Quibi, Lionsgate‘s Starz, Apple TV+ and others all fight for your wallet share, with some surviving and others failing.

In the meantime, the average consumer isn’t going to look at a menu of a dozen options and select three or four, thus determining winners and losers. There are too many complicating factors for such a simple calculation. Some services already exist (Netflix, HBO) and will be largely grandfathered in by their existing subscriber bases. Others come with additional benefits (Amazon) that make “losing” extremely unlikely.

Here’s a more realistic vision of what’s about to happen over the next year.

Disney+

The idea of a streaming war suggests conflict, or at least some degree of unpredictability. But when it comes to the streamers, Disney+ can’t lose, if losing means rejection by most consumers. Disney+ is going to be an essential part of any family’s streaming diet.

There’s not much guesswork here. Disney is charging just $6.99 per month for nearly its entire back catalog of Star Wars movies and related series, Marvel movies and series, Pixar movies, old Disney movies, 30 seasons of “The Simpsons,” Disney Channel shows, 35 original movies and shows in year 1, and much more.

If a streaming service were selling just Marvel and Star Wars series and movies, it would a significant player in the “over-the-top” non-cable world. Disney’s offering is simply too robust to fail.

Indeed, Disney signed up more than 10 million subscribers for Disney+ in less than two days!

One way to define success or failure is if Disney hits its own internal subscriber targets. But those numbers are home-cooked, selected by the company to provide achievable benchmarks. Disney estimates it will have 60 million to 90 million subscribers by 2024. Disney has already struck a partnership with Verizon that will give away Disney+ for free to Verizon unlimited data subscribers and new Fios and 5G broadband homes. MoffettNathanson estimates there will be 18 million Disney+ subscribers by the end of Disney’s fiscal year 2020.

Amazon Prime Video

Amazon will be a “winner” by default. Prime Video comes with Amazon Prime subscriptions, and it’s going to make sense for tens of millions of Americans to get free shipping on Amazon. Prime Video, which spends billions each year on original movies and shows including “Fleabag” and “The Marvelous Mrs. Maisel,” comes as a throw-in for most consumers. It almost definitionally can’t lose, unless Amazon, itself, decides video no longer moves the needle for its Prime subscribers.

NBC’s Peacock

NBC is leaning toward offering an advertising-supported version of Peacock for free to everyone, sources told CNBC earlier this month. While there may be tiers of the service that offer more content (and no ads) for a price, NBC has decided that advertising revenue can make up for subscription revenue. As a result, NBC isn’t really playing the same game as everyone else, and therefore also can’t really lose. A lot of people are going to subscribe to a free service. It’s free.

HBO Max

About 34 million U.S. subscribers already pay for HBO. So when AT&T announced last month that HBO Max would be the exact same price as HBO, it can’t totally lose — at least if “lose” means being totally rejected. As soon as it strikes distribution deals, current HBO customers almost certainly will take the additional HBO Max content for free.

The question then becomes if enough new subscribers will come aboard to cover the billions AT&T plans to spend on new content.

As Netflix CEO Reed Hastings said earlier this month, using customer signups as a metric for success is flawed because it’s too easy to maneuver. AT&T says it wants 50 million U.S. subscribers by 2025. But AT&T is giving away HBO Max to its premium unlimited wireless subscribers and top-tier home broadband customers. And if AT&T finds that few people are subscribing, it can simply offer HBO Max to more AT&T customers for free to meet targets. AT&T has about 160 million total mobility connections and customers

Apple TV+

Apple is giving its streaming video service away for free for a year before charging $4.99 per month to customers. But Apple can easily change this offer if it notices that few customers are paying for its limited library of originals, either bundling the service with its more popular music streaming service or extending the offer indefinitely as consumers buy new Apple products. Apple hasn’t released an internal streaming subscriber goal because the whole point of Apple TV+ isn’t to get you to pay for video — it’s to keep you using Apple electronic devices. Like Amazon, Apple will continue to be in the streaming game as long as it wants to be in the streaming game.

Netflix

So if all these other services will win, or at least comfortably exist, does that mean Netflix will lose? Probably not. Because so many of the services are free or cheap or throw-ins as benefits to products you’re already paying for, Netflix isn’t in any immediate danger of losing its place as the centerpiece of streaming solutions.

Netflix also outspends everyone, paying $15 billion a year for content, and has more than 160 million global subscribers. T-Mobile wireless subscribers get Netflix for free indefinitely.

First-mover advantage, brand recognition and massive content spend on original programming will almost certainly keep Netflix as an essential part of an average consumer’s streaming package.

Eventually, it’s possible that millions of subscribers will conclude that a bundle of, say, Disney+ and HBO Max is a good replacement product for Netflix. But while that decision may impact Netflix’s marginal growth, it probably won’t disrupt the company’s global expansion ambitions.

Everyone else

Finally, we reach the contestants in the actual Streaming Wars, at least in the near term — everyone else. Congratulations, Quibi! I’m not sure you will succeed. Starz and Discovery? Maybe you’ll stick, or maybe you’ll need to merge with CBS and Viacom to gain the necessary scale to compete. Everyone else I didn’t mention? You’re here until you prove yourselves.

These are the players Americans could actually refuse to spend money on, driving them out of business with more choice. This is why Hastings noted that a better metric for success may be time spent on a service instead of subscriber numbers.

These streamers are the junior varsity of available products. Of course there will be cut downs at this level.

There are a lot of streaming services. Most are going to stick around for a while. Investors can dial back the Streaming Wars rhetoric.

There’s good news for consumers, too: You probably already pay for a lot of these services, and many of the new ones are free for a while. Your entertainment budget isn’t going to blow up just yet. Relax.

(Disclosure: Comcast’s NBC Universal is the parent company of CNBC.)

Follow @CNBCtech on Twitter for the latest tech industry news.

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Apple Tim Cook seen eating Singaporean foods in Tiong Bahru Market

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Tim Cook, chief executive officer of Apple, in Sun Valley, Idaho, United States, on July 12, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Apple CEO Tim Cook started his Wednesday with a Singaporean breakfast in the quaint and charming neighborhood of Tiong Bahru — one of the oldest housing estates in Singapore known for its 1930s streamline moderne architecture.

In a post on his professional Facebook page, Darren Soh said he and fellow photographer Aik Beng Chia had breakfast with Cook at the Tiong Bahru Market and gave the tech CEO a “quick tour.”

On what appears to be Soh’s private page, he said, “Tim tried Chwee Kueh, Carrot Cake, Soya Bean Milk but his favourite was pandan flavoured Gao Teng Kueh.”

Chwee kueh is a dish of steamed rice cakes topped with preserved radish. The carrot cake that Cook tried is likely a savory dish of stir-fried radish cake, and does not contain carrots like the Western dessert. Cook’s apparent favorite dish of the morning, “gao teng kueh,” is a multi-layered cake typically made with tapioca flour, rice flour and coconut milk.

Earlier this week, Cook was in Japan, based on recent photos shared on Twitter.

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Facebook drops 16 spots on Glassdoor’s list of best places to work

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Facebook Chairman and CEO Mark Zuckerberg testifies at a House Financial Services Committee hearing in Washington, October 23, 2019.

Erin Scott | Reuters

Facebook saw its ranking on Glassdoor’s list of the “Best Places to Work” list slide for a second year in a row, tumbling 16 spots to 23rd. Its desirability ranking dropped from 4.5 to 4.4 out of a perfect 5 according to employees, who use the site to evaluate their employers anonymously.

The top three spots on the 2020 list are held by HubSpot, Bain & Company and DocuSign, respectively.

It’s a precipitous fall for Facebook, which claimed reached the top spot in Glassdoor’s 2018 rankings. It fell to No. 7 in the 2019 list, following reports in March 2018 that political consulting firm Cambridge Analytica had improperly accessed the data of 87 million Facebook users.

Facebook’s drop comes as regulators put the social media company in the crosshairs of antitrust investigations. The 2020 Glassdoor rankings show that employees no longer regard working at the social media company as they once did. After the Cambridge Analytica scandal, the company struggled to recruit college graduates and software engineers, former Facebook recruiters told CNBC in May.

Glassdoor bases its ranking on eight factors, including work/life balance, senior management and compensation and benefits. To be ranked, companies must have at least 1,000 employees and receive at least 75 ratings across the eight categories that Glassdoor takes into consideration during the eligibility period.

Among the complaints, employees told Glassdoor that Facebook is now “painstakingly slow” when it comes to making decisions on matters of privacy due to its numerous scandals over the past two years. Employees also complained that high-profile projects are extremely political and there is a lack of work-life balance.

“There’s been a lot of external criticism that’s been coming toward Facebook,” said Glassdoor Community Expert Sarah Stoddard. “There’s a high expectation for employees to be highly productive which leads to long working hours, and that’s a reason we keep seeing Facebook drop.”

Despite its declining score and fall in the rankings, Facebook remains well above the average Glassdoor company rating of 3.5. Employees praised Facebook’s mission-driven culture, the talent at the company and the perks and benefits.

“Employees continue to call out that the mission of the company is part of what drives them,” Stoddard said.

Facebook was not the only tech company to drop in the rankings. Google dropped three spots, landing at 11th place with an award score of 4.5. Apple dropped 13 spots to 84th and an award score of 4.3. Amazon once again failed to crack the list of 100.

Microsoft, meanwhile, climbed up 13 spots, landing at No. 21 with an award score of 4.4.

Here is Glassdoor’s list.

WATCH: Here’s how to see which apps have access to your Facebook data — and cut them off

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26 million subscribers watched first week

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Robert De Niro, Al Pacino and Ray Romano star in Martin Scorsese’s “The Irishman.”

Netflix

Netflix has a history of not publicizing many of its viewership metrics, but the company isn’t shying away from saying how many of its subscribers watched “The Irishman,” the Golden Globe-nominated mobster film.

More than 26 million global accounts (26,404,081, to be exact) watched at least 70% of “The Irishman” in the first seven days the film appeared on the Netflix platform, according to Ted Sarandos, Netflix’s chief content officer. Sarandos spoke Tuesday at UBS’s Global TMT Conference in New York.

Netflix estimates more than 40 million accounts will watch the Martin Scorsese-directed film in the first 28 days, said Sarandos, who noted that it’s likely far more people have actually seen the movie because multiple viewers frequently watch simultaneously using one Netflix account.

Netflix hopes the popularity of “The Irishman” will spur more top content makers to sign deals with the streaming giant to showcase their best creative works. While director Martin Scorsese has implored “The Irishman” viewers not to watch the film on their phones, the shortened window between theatrical release and Netflix debut has allowed many people to view the film who probably wouldn’t have seen it if they had to go to a movie theater. Sarandos noted a night out to a movie theater in New York could cost close to $100 or more when including ticket prices, transportation and other incidentals.

“When you think about that, people understand the value proposition of a big new movie this week at Netflix,” said Sarandos at the UBS conference. “It translates into how they value Netflix.”

“The Irishman,” which stars Robert De Niro, Al Pacino and Joe Pesci, is a three-and-a-half hour long drama detailing the life of self-identified mob hitman Frank Sheeran. The movie had a limited theatrical debut on Nov. 1 and launched on Netflix on Nov. 27. “The Irishman” garnered a Golden Globe best drama nomination earlier this week.

Follow @CNBCtech on Twitter for the latest tech industry news.

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