Apple seen hitting $10 billion annually from 100 million video subscribers by 2024

Posted:
in iPod + iTunes + AppleTV edited March 2019
Apple's streaming video service is poised to be a massive moneymaker for the company if it plays its cards right, hitting 100 million subscribers somewhere between 2022 and 2024, an analyst claimed on Tuesday.

Blade Runner 2049


The March 25 service announcement "will only be the drumroll to a more transformative content acquisition during the course of 2019 for Apple," Wedbush's Daniel Ives wrote in a note to investors, seen by AppleInsider. If Apple hits 100 million subscribers, that could translate into $7 billion to $10 billion in extra annual revenue, he estimated.

This assumes "minimal speed bumps" and continued brand loyalty though, as well as aggressive content acquisition.

"While acquisitions have not been in Apple's core DNA, the clock has struck midnight for Cupertino in our opinion and building content organically is a slow and arduous path, which highlights the clear need for Apple to do larger, strategic M&A," Ives said. He suggested A24, Lionsgate, Sony Pictures, CBS/Viacom, Netflix, and MGM as possible targets. Some smaller-scale partnerships with those companies are already in progress, such as Sofia Coppola's movie for Apple and A24, "On the Rocks."

On the service itself, Ives claimed that Apple is "still in the late planning stages" and more likely to launch in the fall. It's predicted Apple will take between 25 and 35 percent from monthly subscriber fees.

Apple is known to have invested at least $1 billion in original content such as a "Time Bandits" TV series and an adaptation of Isaac Asimov's "Foundation" novels. That's a drop in the bucket next to some of its rivals though, especially Netflix, which spent some $13 billion in 2018 alone.

Ives is maintaining an "outperform" rating for Apple stock with a $200 12-month price target. He cited several risks, such as the popularity of the iPhone, the ability to ramp up software and services, and tough competition in China.

The March 25 event will reportedly be a star-studded affair, with appearances by people like J.J. Abrams, Jennifer Garner, and Steve Carrell. On top of video it's also expected to reveal another paid service, Apple News Magazines, based on its Texture takeover.

One possibility is new hardware, including new iPads, AirPods, the AirPower charging mat, or even a new iPod touch. Rumors have gone back and forth on those though, and some products may have to wait as late as fall.

Comments

  • Reply 1 of 9
    MacProMacPro Posts: 19,379member
    Waiting for the 'Apple is new to this area so will fail ..' comments.
    fastasleeplollivermonstrosity
  • Reply 2 of 9
    blastdoorblastdoor Posts: 2,435member
    MacPro said:
    Waiting for the 'Apple is new to this area so will fail ..' comments.
    How about this instead — Apple is a decade too late to this area and will fail.

    it would be as if Apple came out with the iTunes Store in 2010 after spending ten years with the iPod as a “hobby”.
    hmurchison
  • Reply 3 of 9
    LatkoLatko Posts: 398member
    WIthout a strict regime by market regulators Apple can exploit every platform advantage it has. Resulting in ≈ 2 billion potential subscribers (in different content peer groups)
    Making any number near or lower than 100 mio hilarious. Any significantly higher number would be nominal but is what nobody near Apple dares to quote.
    And why should they, as there will not be even the beginning of a cost (let alone revenue-) analysis in this largest cross-subsidized video enterprise on the planet (actually screaming to get regulated). Therefore, break-even numbers will be impossible to estimate which is the only thing free-rider Tim needs to make certain, in order to make himself look successful even in the worst case.
    Easy business development - as investments will be covered via stock market reactions where - in their effort to obfuscate direct results or costs - a portal function will allow both Apple and its partners to doublecount subs to make for more apparent success.
    These are just some of the tactics of FAANG platform owners - they won’t refrain from it.
    edited March 2019
  • Reply 4 of 9
    mdriftmeyermdriftmeyer Posts: 7,502member
    On what planet do they think Apple will start off by charging $9.99?
  • Reply 5 of 9
    elijahgelijahg Posts: 2,311member
    Latko said:
    WIthout a strict regime by market regulators Apple can exploit every platform advantage it has. Resulting in ≈ 2 billion potential subscribers (in different content peer groups)
    Making any number near or lower than 100 mio hilarious. Any significantly higher number would be nominal but is what nobody near Apple dares to quote.
    And why should they, as there will not be even the beginning of a cost (let alone revenue-) analysis in this largest cross-subsidized video enterprise on the planet (actually screaming to get regulated). Therefore, break-even numbers will be impossible to estimate which is the only thing free-rider Tim needs to make certain, in order to make himself look successful even in the worst case.
    Easy business development - as investments will be covered via stock market reactions where - in their effort to obfuscate direct results or costs - a portal function will allow both Apple and its partners to doublecount subs to make for more apparent success.
    These are just some of the tactics of FAANG platform owners - they won’t refrain from it.
    2 billion 😂😂😂 You even think there're 2 billion people in the world with enough disposable income to waste on streaming services? 2 billion with good enough connections? 2 billion willing to pay for steaming? Thanks for the laugh.
    lollivermonstrosityrandominternetperson
  • Reply 6 of 9
    LatkoLatko Posts: 398member
    elijahg said:
    Latko said:
    WIthout a strict regime by market regulators Apple can exploit every platform advantage it has. Resulting in ≈ 2 billion potential subscribers (in different content peer groups)
    Making any number near or lower than 100 mio hilarious. Any significantly higher number would be nominal but is what nobody near Apple dares to quote.
    And why should they, as there will not be even the beginning of a cost (let alone revenue-) analysis in this largest cross-subsidized video enterprise on the planet (actually screaming to get regulated). Therefore, break-even numbers will be impossible to estimate which is the only thing free-rider Tim needs to make certain, in order to make himself look successful even in the worst case.
    Easy business development - as investments will be covered via stock market reactions where - in their effort to obfuscate direct results or costs - a portal function will allow both Apple and its partners to doublecount subs to make for more apparent success.
    These are just some of the tactics of FAANG platform owners - they won’t refrain from it.
    2 billion ߘⰟ肰 You even think there're 2 billion people in the world with enough disposable income to waste on streaming services? 2 billion with good enough connections? 2 billion willing to pay for steaming? Thanks for the laugh.
    Well, there is ample steam on the planet (to blur your perspective & understanding of the term "potential")
    edited March 2019
  • Reply 7 of 9
    markbyrnmarkbyrn Posts: 646member
    Talk about pie in the sky numbers, esp. for a streaming service that we don't know anything about.  It's hard to imagine that Apple will offer something substantively better (channel offerings, price) than let's  say Playstation Vue or FUBO TV.   
  • Reply 8 of 9
    Latko said:
    WIthout a strict regime by market regulators Apple can exploit every platform advantage it has. Resulting in ≈ 2 billion potential subscribers (in different content peer groups)
    Making any number near or lower than 100 mio hilarious. Any significantly higher number would be nominal but is what nobody near Apple dares to quote.
    And why should they, as there will not be even the beginning of a cost (let alone revenue-) analysis in this largest cross-subsidized video enterprise on the planet (actually screaming to get regulated). Therefore, break-even numbers will be impossible to estimate which is the only thing free-rider Tim needs to make certain, in order to make himself look successful even in the worst case.
    Easy business development - as investments will be covered via stock market reactions where - in their effort to obfuscate direct results or costs - a portal function will allow both Apple and its partners to doublecount subs to make for more apparent success.
    These are just some of the tactics of FAANG platform owners - they won’t refrain from it.
    You sound a little unhinged.

    First, there is and will be great competition for viewers between these services.  It's not like every Apple fan will blithely add a monthly payment to Apple for TV to their budget without comparing the value against Netflix, Disney+, Amazon prime, and new competitors popping up every day.

    With the exception of Netflix, these services are all cross-subsidized, right?  Why are you so worried about whether investors will be able to value these properly?   
    elijahg
  • Reply 9 of 9
    frantisekfrantisek Posts: 738member
    All worrying about low iPhone sales forget that Apple is profit company and it has many sources of profit, video service will be new one, significant and has large installed base already. This year may not bring any breakthrough things besides three cameras on iPhone on small significant can be Airpods, MacPro, and new Watch. Next year can become significant with AR rollout and will be important how competitors will be able to respond. Car is chapter for itself and none is willing to predict much.
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