Illustration: Eniola Odetunde/Axios

Streaming companies are under so much pressure to juice their subscriber numbers that they're giving away access to subscribers for free on a trial basis, with the hope that they one day can get users to actually pay.

Why it matters: Subscription streaming providers have set lofty subscriber goals over the next few years. But without the distribution prowess of a wholesaler, like a telecom company, they won't be able to hit those numbers.

The big picture: It's basically the same economics as cable all over again, where networks spend billions of dollars to produce or buy high-quality content, only then to rely on companies with direct customer relationships for distribution.

Driving the news: WarnerMedia boss John Stankey told Reuters in an interview Friday that the company will be offering HBO Max at no extra charge to 10 million AT&T Pay-TV and wireless customers, who are also HBO subscribers.

Other streaming companies are following a similar model:

  • Disney+ will be available to Verizon customers with unlimited wireless plans for free for one year, Disney and Verizon announced Tuesday.
  • Peacock will be offered to cable customers from its parent company Comcast for free when it launches next April. NBCUniversal CEO Steve Burke said Monday that Peacock will be bundled into Comcast's streaming platform, Flex.
  • Quibi announced earlier this month that it has struck a distribution deal with T-Mobile. Details at this point are scant.
  • Amazon Prime Video is offered to subscribers as a part of Amazon's broader Amazon Prime subscription.
  • Apple TV+ will be provided for one year for free to new hardware customers.

Flashback: Netflix was the first streamer to broker a deal like this with a telecom provider when it said in late 2017 that its app would be distributed for free to millions of T-Mobile customers. Earlier this year, however, T-Mobile said it would pass off Netflix's subscription rate hike to consumers, forcing them to pay $2 monthly for the access.

By the numbers: While these companies are investing heavily in marketing, marketing alone won't be able to get them to their subscriber targets.

  • Disney said earlier this year it hopes to get 60-90 million customers signed up by 2024.
  • HBO Max hopes to reach 50 million U.S. subscribers in its first five years after launching, AT&T executives said on its third quarter earnings call Monday. It hopes to reach 80 million global subscribers by 2025.
  • Peacock will get at least 20 million subscribers off the bat, who will be able to access the streaming service via their Pay-TV subscription through Comcast.
  • Netflix currently has more than 60 million subscribers in the U.S. and nearly 100 million globally. Analysts estimate it will need at least 300 million global subscribers paying increased rates in order for the streamer to be profitable.
  • Quibi, in a best-case scenario, is hoping to reach up to 70 million subscribers in five years, per Digiday.

Be smart: The goal for most of these mega-streamers is to get users to buy some other, more lucrative service. Apple wants to give users video so they'll buy more phones. Amazon wants to give users video so they'll buy more goods online.

  • For telecom companies like Comcast and AT&T, the goal is to give customers more streaming options so that they can maintain customer relationships, without having them totally eat their existing Pay-TV and mobile businesses.

The bottom line: The average U.S. consumer is only willing to pay $42 for streaming services, per Magid Associates, which means that if competing streamers all want to reach a significant portion of the American population in the next few years, many will have to give it to consumers for free.

  • After that, it will be on them to do whatever it takes to prevent subscribers from "churning" or canceling their service for another.
  • "Launch Marketing may get people to sample in November but customers don’t always stay even if they are satisfied," says Jill Rosengard Hill, EVP at Magid. A quarter of users surveyed in Magid's latest study say they will cancel in the first 30 days.

Go deeper: Streaming's cancel culture problem

Go deeper

Updated 43 mins ago - Politics & Policy

Supreme Court denies Pennsylvania GOP request to limit mail-in voting

Protesters outside Supreme Court. Photo: Daniel Slim/AFP via Getty Images

The Supreme Court on Monday denied a request from Pennsylvania's Republican Party to shorten the deadlines for mail-in ballots in the state. Thanks to the court's 4-4 deadlock, ballots can be counted for several days after Election Day.

Why it matters: It's a major win for Democrats that could decide the fate of thousands of ballots in a crucial swing state that President Trump won in 2016. The court's decision may signal how it would deal with similar election-related litigation in other states.

Microphones will be muted during parts of Thursday's presidential debate

Photos: Jim Watson and Saul Loeb/AFP via Getty Images

The Commission on Presidential Debates adopted new rules on Monday to mute microphones to allow President Trump and Joe Biden two minutes of uninterrupted time per segment during Thursday night's debate, AP reports.

Why it matters: In the September debate, Trump interrupted Biden 71 times, compared with Biden's 22 interruptions of Trump.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Politics: Trump says if Biden's elected, "he'll listen to the scientists"Trump calls Fauci a "disaster" on campaign call.
  2. Health: Coronavirus hospitalizations are on the rise — 8 states set single-day coronavirus case records last week.
  3. States: Wisconsin judge reimposes capacity limit on indoor venues.
  4. Media: Trump attacks CNN as "dumb b*stards" for continuing to cover pandemic.
  5. Business: Consumer confidence surveys show Americans are getting nervousHow China's economy bounced back from coronavirus.
  6. Sports: We've entered the era of limited fan attendance.
  7. Education: Why education technology can’t save remote learning.

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