Wall Street is celebrating the emergence of Apple (AAPL 0.74%) as a services company, but that doesn't mean it's a star on all fronts. How much Apple TV+ did you watch this past week? It was the same with me. Strike up a conversation with friends, and you will probably find out that not a lot people showed up for The Morning Show or saw See. Even your friend Emily hasn't gotten around to streaming Dickinson.  

With Netflix (NFLX 0.77%) on one end of the premium streaming video battlefield and Disney (DIS -0.07%) on the other, it seems as if Apple is generating about as much buzz as a powerless shaver. Let's kick around some of the reasons why Apple TV+ isn't making much of a dent in the market dominance of Netflix and why it failed to drum up the hype that Disney+ did when it launched.

The cast of Servant on Apple TV+ holding a baby.

Image source: Apple.

1. Sometimes free isn't enough

An analyst note out this morning from Bernstein's Toni Sacconaghi points out that no more than 10% of the Apple customers eligible to start a free 12-month trial of the streaming platform have taken the consumer tech giant up on its offer since its launch three months ago. Sacconaghi's analysis of last week's quarterly report finds that likely less than 10 million owners of trial-eligible Apple devices have bothered to start the clock on the free year of content. 

Sacconaghi suggests that Apple may either be intentionally holding back on promoting Apple TV+ or taking a conservative approach to assessing the service's take rate to offset the negative accounting impact of the platform's launch. However, there was no shortage of Apple TV+ ads during the first few weeks after the launch. The more likely culprit is just that consumers tend to view something that is made available at no additional cost as less valuable than something that they pay for. 

Amazon.com (AMZN -0.85%) has made its Prime Video offering available to members of its popular loyalty shopping platform for years, and even Amazon Prime customers spend more time streaming content on Netflix, which they have to pay for, than what's available to them through Amazon at no additional cost. Perception is everything, and whether you take Apple up on its free 12-month trial or shell out just $4.99 a month as a paying subscriber, sometimes you do get what you pay for when it comes to engagement and, ultimately, retention.

2. Apple still doesn't have a pulse on what you want 

Netflix's first foray into original programming came eight years ago with Lilyhammer. It wasn't a bad show, but it wasn't until House of Cards that Netflix earned its stripes. Disney's Hulu turned heads with The Handmaid's Tale, only after paving the way there with East Los High and Freakish.

Disney+ scoring a winner out of the gate with The Mandalorian is the exception to the rule. It takes time to cultivate an audience. Apple probably thought it had the inside track to what viewers were craving given its years of selling and renting digital videos through iTunes. It went on to line up content with some of the biggest stars on the planet, but it couldn't stick the landing. 

As I pointed out shortly after the launch of Apple TV+, just two of its shows -- The Morning Show and See -- were generating the kind of traffic on online review-aggregator Rotten Tomatoes to be counted among the top 20 trending shows on television. Adding insult to injury, those two serialized dramas were the worst-reviewed shows among the top 20. 

3. The pipeline is bare

If having just a pair of shows among the top 20 trending shows on Rotten Tomatoes was a bad look for Apple TV+ back in November, that's two more than it has on that list today. Apple TV+ thought it had a healthy cadence of releases to follow its launch titles, but it no longer has the attention of the fickle streaming customer. 

The quiver isn't exactly empty. Oprah is coming! However, there's a reason why Apple settled on a Happy Meal price point for its service. Apple typically positions itself as a premium-priced offering relative to its peers, but this is one arena where it knows its place. Apple TV+ lacks the back catalog of content that Disney+, Netflix, Hulu, and Prime Video bring to the table. Apple makes too much money renting and selling digital copies of movies and network shows to give too much of that away. However, placing all of its eggs into the proprietary content basket means that Apple needs to deliver on that front. And we know that's not happening right now. Apple may be the most valuable tech stock on the planet right now, but it's not perfect. It better hope that it's not too late for practice to make perfect.