In fall 2021, to save on production costs, Apple leaned on a condition inside of a clause inside of an industry-wide contract with entertainment-union IATSE. The largest company in the world (by market cap) told the International Alliance of Theatrical Stage Employees its Apple TV+ streaming service had fewer than 20 million subscribers in the U.S. and Canada as of that July. Per a prior agreement, that allowed a studio to pay a discounted rate to production-crew members in the union. Fellow nascent streamers Paramount+ and Peacock also took advantage of the lower tier at the time.
By July 2022 (these measurements/disclosures are timed to July), all major streamers agreed to pay IATSE workers the higher of the two rates, two people with knowledge of those negotiations told IndieWire. Streaming was surging, and it was becoming increasingly difficult to define a “subscriber.”
For example, NBCUniversal’s Peacock service has a free tier, an ad-supported $4.99 monthly plan, and an ad-free $9.99 option. It’s also bundled in a bunch of cable-subscription packages, including (but not limited to) Comcast’s own Xfinity service.
The Apple and IATSE squabble was based on bundling, though Apple’s had more to do with hardware. Apple generates the vast majority of its revenue on smartphone sales and regularly includes one year of its subscription services, including Apple TV+, with the purchase of an iPhone or iPad.
However, Apple did not believe those customers should count toward its Apple TV+ subscriber total, one person told us, since the retail customer was not proactively paying for the streaming-TV service. IATSE did not agree.
While Apple TV+ is the last streamer standing to never publicly report subscriber numbers, for purposes of this particular battle it had to disclose where it stood within the IATSE threshold. It is strongly believed that these days, with or without those freebies, Apple TV+ is well beyond 20 million subscribers.
A representative for Apple did not respond to our requests for comment on this story.
Paramount+ certainly passed the threshold a while back. At the end of the September 2022 quarter, parent company Paramount Global reported its core service had more than 46 million global subscribers. We’ll get an update on that number on February 16 when Paramount Global reports its fourth-quarter and full-year 2022 financials.
On Thursday, Comcast reported its NBCUniversal streaming service passed 20 million subscribers in the U.S. at the end of 2022, which would mean it officially, no matter what, no questions asked, crossed the IATSE threshold. No matter: the writing was on the wall six months earlier when the major players, including Peacock, agreed that IATSE’s higher rate would be the going rate.
IATSE never announced the new July 2022 agreement because, well, it doesn’t want to publicize that the lower-pay tier still exists. When reached by IndieWire, the union had no comment on this story. Reps for Peacock and Paramount Global also declined comment.
The matter of what exactly constitutes a qualifying subscription was never litigated, we’re told, so technically that former sticking point is not fully, legally resolved and could still be challenged in court. But no one, including Apple, appears interested in doing that these days, which makes the condition sort of moot. That could change should new streamers emerge from growing studios, or should an existing streamer lose a significant number of subs. Or, the contract could just be officially brought up to date.
The IATSE-AMPTP (Alliance of Motion Picture and Television Producers) Basic Agreement was last renegotiated in 2021. It will be up again for renegotiation on 2024. The same applies to its Area Standards Agreement, which covers productions outside of New York and Los Angeles.
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