Apple's video service needs to hit Android & desktop to impact revenue, says Macquarie

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in iPod + iTunes + AppleTV
Apple's video streaming service will be a "large-scale newcomer" to the market, but it needs to come to Android and Smart TVs to move the financial needle, says Macquarie.

Apple TV, TV App, and its iOS mobile TVs
Apple TV, TV App, and its iOS mobile TVs


Expected to be unveiled at the "It's show time" Apple event on March 25, the video service is largely believed to involve Apple offering free original content to customers, while at the same time highlighting third-party services users can pay to watch. According to Macquarie's analysts, in an investor note seen by AppleInsider, the service will make a "big entry in the over-the-top video landscape," though there are some unknowns the firm tries to answer.

Analyst Tim Nollen suggests that analysts should question how widely the service will be available, in that while Apple's primary aim is to "improve the user experience," it should be asked if this would need for it to be platform-agnostic or platform-exclusive in Apple's approach.

"Precedent set by Apple Music would support the former alongside any demands from talent for wider distribution, and making the service available on Android, desktop, and Smart TVs may help drive subs in the near term," Nollen suggests. Even so, the analysts "wouldn't be surprised" if it was limited to just iOS and Apple TV as a strategy to combat hardware churn.

Highlighting suggestion from others that Apple will offer "bundles" of channels at a cheaper price than buying them separately, analyst Ben Schachter believes Apple could offer a bundle of multiple services, including Apple Music and Apple News, as well as cloud storage. Raising previous discussions from Apple about "changing the way consumers access video," it is proposed this could mean new hardware or an innovative form of a guide-type service for consumers.

While Apple will become a new avenue for content distribution for content producers, analyst Amy Yong proposes the bundled channel offers could threaten traditional cable and satellite providers, as well as other streaming television services.

"We believe HBO and Starz content may be incorporated into the offering in an ad-supported/add-on capacity," suggests Yong. "With a tiered HBO-branded over-the-top offering coming, HBO content will likely be limited. For Lionsgate and Starz, Apple can provide an avenue for rapid international growth and also look to purchase original studio content."

The revenue potential for Apple could be quite substantial, as analysts previously suggested that, if it reached 100 million subscribers by between 2022 and 2024, Apple could be earning $10 billion in revenue from the service.

Macquarie maintains a "Neutral" rating on Apple stock, with a price target of $149. At the time of publication, Apple's stock price is at $194.
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Comments

  • Reply 1 of 26
    Yes, the Android folk who notoriously spend big money on anything
    bshankArloTimetravelerlkruppMetriacanthosaurusSpamSandwichericthehalfbeemacplusplusStrangeDaysapplesnoranges
  • Reply 2 of 26
    Doesn’t need to hit Android if it hits smart TVs (which looks like a certainty given major TV manufacturers adding support for AirPlay and Samsung adding iTunes). 
    bshankcyberzombieArloTimetravelerpatchythepirateleavingthebigg
  • Reply 3 of 26
    Doesn’t need to hit Android if it hits smart TVs (which looks like a certainty given major TV manufacturers adding support for AirPlay and Samsung adding iTunes). 
    I assume most smart TVs use Android... so Apple would not have to worry about developing a version as (given they are coming on board w/ AirPlay) the smart TV vendors will move to support the Apple content.
    bshank
  • Reply 4 of 26

    What does it take to be an analyst? It doesn't seem like you need a lot of experience or pass success.

  • Reply 5 of 26
    gatorguygatorguy Posts: 20,752member
    Doesn’t need to hit Android if it hits smart TVs (which looks like a certainty given major TV manufacturers adding support for AirPlay and Samsung adding iTunes). 
    I assume most smart TVs use Android... so Apple would not have to worry about developing a version as (given they are coming on board w/ AirPlay) the smart TV vendors will move to support the Apple content.
    Most smart TV's do not use Android.  LG has their own OS. as does Roku, Samsung...

    VendorPlatformDevices
    AmazonFire TVFor Fire TV devices, including Fire TV Stick.
    AppletvOSFor Apple TV devices. iOS-based, with an app store. For Apple TV generation 4 and later.
    AppleApple TV SoftwareFor Apple TV devices, generations 1 to 3. iOS-based. Initially based on Mac OS X Tiger and Front Row.
    GoogleChromecastFor Chromecast HDMI dongles.
    HaierRoku TVFor TV sets.
    HisenseAndroid TVFor TV sets.
    HisenseRoku TVFor TV sets.
    HisenseVIDAA / VIDAA UFormer solution for TV sets. The newer TV models use the Android TV platform
    HitachiRoku TV
    InsigniaRoku TVFor TV sets.
    LGwebOS Smart TVCurrent solution for TV sets.
    LGNetCastFormer solution for TV sets.
    MicrosoftXbox OneFor Xbox One game console. More Smart TV features and TV apps expected with the Windows 10 update, that include the Windows Universal App Store.
    MicrosoftXbox 360For Xbox 360 game console, with smart TV features.
    NetgearNeoTVFor NeoTV streaming players.
    NvidiaAndroid TVFor Nvidia Shield TVs.
    PanasonicViera Cast and Viera ConnectFor TV sets. The newer TV models now use the Firefox OS TV platform (no longer vendor specific).
    PanasonicMy Home ScreenFor TV sets.
    PhilipsAndroid TVFor TV sets.
    PhilipsNet TVFormer solution for TV sets. The newer TV models use the Android TV platform
    SamsungTizen OS for TVFor newer TV sets.
    SamsungSamsung Smart TV (Orsay OS)Former solution for TV sets and connected Blu-ray players. Now replaced by Tizen OS
    SharpAndroid TVFor TV sets.
    SharpAQUOS NET+Former solution for TV sets.
    SharpRoku TVFor TV sets.
    SharpSmartCentralFormer solution for TV sets.
    SonyAndroid TVFor TV sets.
    SonyPlayStation TV with Sony Entertainment NetworkFor PlayStation game console.
    SonySony Internet TV (Sony Apps)Former solution for TV sets. The newer TV models use the Android TV platform (no longer vendor specific).
    TCLAndroid TVFor TV sets. The newer TV models use the Roku TV platform
    TCLRoku TVFor TV sets.
    TCLSmart TV 2Former solution for TV sets.
    TiVoTiVoFor TiVo DVR box.
    ToshibaAndroid TVFor TV sets.
    ToshibaToshiba PlacesFormer solution for TV sets. The newer TV models use the Android TV platform
    Sling MediaSlingboxFor Slingbox set-top-boxes.
    SkyworthAndroid TVFor TV sets.
    Western DigitalWD TVFor WD TV boxes.
    WestinghouseAndroid TVFor TV sets.
    WestinghouseFire TVFor TV sets.
    WestinghouseRoku TVFor TV sets.
    WestinghouseSAMBAFormer solution for TV sets. A very limited system with apps you cannot change.
    roundaboutnowpatchythepirateLatkoSoliuraharaapplesnoranges
  • Reply 6 of 26
    croprcropr Posts: 944member
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    edited March 22 muthuk_vanalingam78BanditSoliurahara
  • Reply 7 of 26
    genovellegenovelle Posts: 967member
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    What are you making? That could have a lot to do with it. Most people I encounter or even show up on these sites want something for nothing. Many developers openly complain about the piracy so their revenue takes a hit unless it’s a subscription model. 
  • Reply 8 of 26
    rogifan_newrogifan_new Posts: 4,105member
    Yes, the Android folk who notoriously spend big money on anything
    The most popular apps on iOS are free.
    muthuk_vanalingam
  • Reply 9 of 26
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    The statement is not wrong at all, your experience notwithstanding. Android is a wasteland for paid content. The dollars vs. install base is pathetic. There is no thriving Android development ecosystem. Setting your sights on being an Android-only developer who is going to sell product is considered a terrible decision with no potential, whereas making the same decision as an iOS developer is highly lauded by financial institutions, investors and the like.
  • Reply 10 of 26
    croprcropr Posts: 944member
    genovelle said:
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    What are you making? That could have a lot to do with it. Most people I encounter or even show up on these sites want something for nothing. Many developers openly complain about the piracy so their revenue takes a hit unless it’s a subscription model. 
    I have developed multiple apps: most are Dutch, French and/or German speaking.  A short list: an app that guides people to do breathing exercises to fight burn-out and stress,  an app that perfoms membership management for sport clubs and sport federations, an app that manages chess tournaments, an app that manages the election of annual general meetings of associations, .... 
    muthuk_vanalingamurahara
  • Reply 11 of 26
    gatorguygatorguy Posts: 20,752member
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    The statement is not wrong at all, your experience notwithstanding. Android is a wasteland for paid content
    A wasteland I tell 'ya!

    Heck Google Play developers only managed to get about $16B from Google last yet as their cut of the roughly $25Billion in Play Store revenues. How could any of them survive on that? Getting a few billion more from the other Android app stores isn't enough to make a difference even if the combination of all of them, particularly adding China, might roughly approach the total App Store revenues.  They're still literally starving to death. Shocked all of it hasn't died yet. 
    edited March 22
  • Reply 12 of 26
    SpamSandwichSpamSandwich Posts: 31,191member
    More brilliant analysis from people whose opinions should never be questioned.
  • Reply 13 of 26
    FatmanFatman Posts: 300member
    iOS has a larger percentage of higher income and educated users -- that is a fact - not an insult. I commute on a train that leaves from a economically challenged city in CT and heads south into Grand Central station, New York city. The people change along the route and the phones they use change from Androids to iPhones. An observation that you cannot avoid noticing. The same way that the cars change from Hyundai's, Fords and Hondas to BMWs, Mercedes, and Teslas along the same route on the road.Developers have access to these demographics and most realize that iOS users don't agonize over spending $.99 - $4.99 for an app, whereas the majority of the Android base do.
  • Reply 14 of 26
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.

    You do not represent the entire mobile world.

    iOS users spend 4X as much (per user) compared to Android users. This is a basic truth due largely to the fact that most Android devices sold around the world are low-end junk phones. All the tech blogs love to talk about your Samsung Galaxy, Google Pixel, LG G Series, OnePlus or other popular flagships, but these only represent a tiny fraction of total devices sold.

    This is why Android as a platform makes far less money for developers when compared to iOS. It's also why developers don't bother bringing high-end Apps to Android devices or why Android on tablets is dead. There's just no money in it for developers.
    tmay
  • Reply 15 of 26
    gatorguygatorguy Posts: 20,752member
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    This is why Android as a platform makes far less money for developers when compared to iOS. It's also why developers don't bother bringing high-end Apps to Android devices or why Android on tablets is dead. There's just no money in it for developers.
    Where did you find that iOS makes so much more for developers than Android, and what's the link that shows how much more? 100% honest question.
    edited March 22
  • Reply 16 of 26
    gatorguy said:
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    The statement is not wrong at all, your experience notwithstanding. Android is a wasteland for paid content
    A wasteland I tell 'ya!

    Heck Google Play developers only managed to get about $16B from Google last yet as their cut of the roughly $25Billion in Play Store revenues. How could any of them survive on that? Getting a few billion more from the other Android app stores isn't enough to make a difference even if the combination of all of them, particularly adding China, might roughly approach the total App Store revenues.  They're still literally starving to death. Shocked all of it hasn't died yet. 

    Nobody said Google Play isn't making money or that Android developers are starving. But they make a fraction of what The App Store and iOS developers make. That's the real point.

    BTW, where did you get that $25 billion figure from? Google is famous for not reporting Play Store revenues (and why would they as they pale in comparison to The App Store). So I'm really curious as to your source.

    I always find it funny how Google loves to promote numbers until such time as it no longer looks good and they stop. Like they used to report device activations. Or total users on each Android version (which they changed to total visits to Google Play to make it appear more users were on newer versions). Or to stop reporting altogether last October when Pie wasn't being adopted as fast as Oreo despite Project Treble supposedly going to improve update times for newer versions of Android. Samsung also has similar tactics.
  • Reply 17 of 26
    macplusplusmacplusplus Posts: 1,796member
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    Paid by whom? Buyers or advertisers?
  • Reply 18 of 26
    gatorguygatorguy Posts: 20,752member
    gatorguy said:
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    The statement is not wrong at all, your experience notwithstanding. Android is a wasteland for paid content
    A wasteland I tell 'ya!

    Heck Google Play developers only managed to get about $16B from Google last yet as their cut of the roughly $25Billion in Play Store revenues. How could any of them survive on that? Getting a few billion more from the other Android app stores isn't enough to make a difference even if the combination of all of them, particularly adding China, might roughly approach the total App Store revenues.  They're still literally starving to death. Shocked all of it hasn't died yet. 

    Nobody said Google Play isn't making money or that Android developers are starving. But they make a fraction of what The App Store and iOS developers make. That's the real point.

    BTW, where did you get that $25 billion figure from? Google is famous for not reporting Play Store revenues (and why would they as they pale in comparison to The App Store). So I'm really curious as to your source.

    I always find it funny how Google loves to promote numbers until such time as it no longer looks good and they stop. Like they used to report device activations. Or total users on each Android version (which they changed to total visits to Google Play to make it appear more users were on newer versions). Or to stop reporting altogether last October when Pie wasn't being adopted as fast as Oreo despite Project Treble supposedly going to improve update times for newer versions of Android. Samsung also has similar tactics.
    I got the numbers from the same places that reported App Store revenues for last year, and the same sources that Appleinsider uses for reporting AppStore vs Google Play. Sensor Tower is one of those, and AFAIK you've always accepted their numbers. 

    As for which platform is garnering more in total revenue there were stories as far back as three years ago saying that when Chinese Android stores are included Android app revenues actually outpace the App Store.
    https://www.digi-capital.com/news/2015/04/android-makes-more-money-than-ios-including-china/

    Where the truth lies is near impossible to discern AFAICT but going so far as to claim for a fact that Android as a platform makes far less for developers is not supported unless you have some sources proving so. Perhaps it exists, maybe you have that proof and I'm happy to follow whatever links you have that establishes it. 

    edited March 22
  • Reply 19 of 26
    tmaytmay Posts: 3,818member
    gatorguy said:
    gatorguy said:
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    The statement is not wrong at all, your experience notwithstanding. Android is a wasteland for paid content
    A wasteland I tell 'ya!

    Heck Google Play developers only managed to get about $16B from Google last yet as their cut of the roughly $25Billion in Play Store revenues. How could any of them survive on that? Getting a few billion more from the other Android app stores isn't enough to make a difference even if the combination of all of them, particularly adding China, might roughly approach the total App Store revenues.  They're still literally starving to death. Shocked all of it hasn't died yet. 

    Nobody said Google Play isn't making money or that Android developers are starving. But they make a fraction of what The App Store and iOS developers make. That's the real point.

    BTW, where did you get that $25 billion figure from? Google is famous for not reporting Play Store revenues (and why would they as they pale in comparison to The App Store). So I'm really curious as to your source.

    I always find it funny how Google loves to promote numbers until such time as it no longer looks good and they stop. Like they used to report device activations. Or total users on each Android version (which they changed to total visits to Google Play to make it appear more users were on newer versions). Or to stop reporting altogether last October when Pie wasn't being adopted as fast as Oreo despite Project Treble supposedly going to improve update times for newer versions of Android. Samsung also has similar tactics.
    I got the numbers from the same places that reported App Store revenues for last year, and the same sources that Appleinsider uses for reporting AppStore vs Google Play. Sensor Tower is one of those, and AFAIK you've always accepted their numbers. 

    As for which platform is garnering more in total revenue there were stories as far back as three years ago saying that when Chinese Android stores are included Android app revenues actually outpace the App Store.
    https://www.digi-capital.com/news/2015/04/android-makes-more-money-than-ios-including-china/

    Where the truth lies is near impossible to discern AFAICT but going so far as to claim for a fact that Android as a platform makes far less for developers is not supported unless you have some sources proving so. Perhaps it exists, maybe you have that proof and I'm happy to follow whatever links you have that establishes it. 

    I wouldn't normally post a four year old link in support of my POV. Maybe you could choose a "fresh" link, even if the result is the same?
  • Reply 20 of 26
    gatorguygatorguy Posts: 20,752member
    tmay said:
    gatorguy said:
    gatorguy said:
    cropr said:
    Yes, the Android folk who notoriously spend big money on anything
    I am an app developer making all my apps available and iOS and Android.  My current revenue split is 60% Android, 40% iOS.  It can be related to the fact that I am not developing any games or that my apps are mainly targeted at the European market where Android has a high market share, but still, your statement is just wrong.
    The statement is not wrong at all, your experience notwithstanding. Android is a wasteland for paid content
    A wasteland I tell 'ya!

    Heck Google Play developers only managed to get about $16B from Google last yet as their cut of the roughly $25Billion in Play Store revenues. How could any of them survive on that? Getting a few billion more from the other Android app stores isn't enough to make a difference even if the combination of all of them, particularly adding China, might roughly approach the total App Store revenues.  They're still literally starving to death. Shocked all of it hasn't died yet. 

    Nobody said Google Play isn't making money or that Android developers are starving. But they make a fraction of what The App Store and iOS developers make. That's the real point.

    BTW, where did you get that $25 billion figure from? Google is famous for not reporting Play Store revenues (and why would they as they pale in comparison to The App Store). So I'm really curious as to your source.

    I always find it funny how Google loves to promote numbers until such time as it no longer looks good and they stop. Like they used to report device activations. Or total users on each Android version (which they changed to total visits to Google Play to make it appear more users were on newer versions). Or to stop reporting altogether last October when Pie wasn't being adopted as fast as Oreo despite Project Treble supposedly going to improve update times for newer versions of Android. Samsung also has similar tactics.
    I got the numbers from the same places that reported App Store revenues for last year, and the same sources that Appleinsider uses for reporting AppStore vs Google Play. Sensor Tower is one of those, and AFAIK you've always accepted their numbers. 

    As for which platform is garnering more in total revenue there were stories as far back as three years ago saying that when Chinese Android stores are included Android app revenues actually outpace the App Store.
    https://www.digi-capital.com/news/2015/04/android-makes-more-money-than-ios-including-china/

    Where the truth lies is near impossible to discern AFAICT but going so far as to claim for a fact that Android as a platform makes far less for developers is not supported unless you have some sources proving so. Perhaps it exists, maybe you have that proof and I'm happy to follow whatever links you have that establishes it. 

    I wouldn't normally post a four year old link in support of my POV. Maybe you could choose a "fresh" link, even if the result is the same?
    You're welcome to link one more recent, which is likely to show better Android results than that one considering the market share changes in China since. I was looking for one older TBH. The one I used was enough to prove my point. 

    Here's a quick one I came across just now from a couple months ago.
    https://techcrunch.com/2019/01/16/china-accounted-for-nearly-half-of-app-downloads-in-2018-40-of-consumer-spend/
    Put pen to paper and you can figure out yourself whether Android app revenues as a platform approach or exceed those from the App Store at least according to that source.
    edited March 22
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