Streaming TV Service Revenue Will Be a 'Drop in the Bucket' for Apple, Even If It Rivals Netflix

Analyst Tim O'Shea recently published a new research report looking at the impact of Apple's upcoming streaming TV service on the company's overall financial earnings (via Business Insider). According to O'Shea, even if Apple priced the service at $15/month (and took a 30 percent cut, while the rest went to video production partners), the resulting revenue would just be "a drop in the bucket."

apple tv app image
O'Shea predicted that if Apple could get to 250 million subscribers by 2023, it would earn the company $13.5 billion in revenue and account for about 5 percent of the company's revenue that year. Not only that, but 250 million subscribers in four years is a generous prediction, given it took Netflix 12 years to reach its 139 million subscribers as of January 2019.

"It's going take a long time for this type of service to really move the needle," O'Shea told Business Insider. To figure out the potential of the video service, which Apple is widely expected to launch next month, O'Shea estimated that Apple would charge customers $15 a month and take a 30% cut, giving the rest to video production partners

If the service is extremely successful and attracts 250 million subscribers, it would yield $13.5 billion in revenue for Apple. That's nothing to sneeze at. After all, Netflix's total sales last year were $15.8 billion. But in the context of Apple, such a figure would be just a drop in the bucket.

In fiscal 2018, the company posted revenue of $265 billion. Though O'Shea and other analysts expect Apple's sales to drop sharply this year before slowly recovering in coming ones, $13.5 billion would still represent only a small fraction of the company's revenue.

To be clear, O'Shea isn't predicting that Apple will price its streaming TV service at this level, but the analyst is simply providing a "what if" scenario for the launch of the service. CNBC previously reported that Apple will offer its original TV shows for free to Apple device owners, and new reports have suggested that users will be able to add more premium channels onto the service at a cost.

As part of these recent rumors, it's also been suggested all users will have to pay a monthly subscription to gain access to Apple's original TV shows. In regards to these rumors, a price has not yet been put forward. More clarity should be given to Apple's streaming service on March 25, when the company is expected to host a major event debuting the service and outlining its big features.

Top Rated Comments

ipedro Avatar
25 months ago
He’s not accounting for the hardware sales achieved by retaining people within the Apple ecosystem.

iTunes sold music but above all, it sold iPods and from there, the halo effect lead to new Mac users, impressed with the Apple experience, switching from PC.

That iPod halo effect lead directly to the iPhone whicH is responsible for the world’s first trillion dollar company.
Score: 15 Votes (Like | Disagree)
syklee26 Avatar
25 months ago
Monthly fee to watch that Karaoke crap?
Score: 12 Votes (Like | Disagree)
dominiongamma Avatar
25 months ago
Wish Apple would stop with the side shows and work on the products that could use some updating and lower prices .
Score: 11 Votes (Like | Disagree)
bozzykid Avatar
25 months ago

He’s not accounting for the hardware sales achieved by retaining people within the Apple ecosystem.

It would be impossible to get 250 million users with a walled garden approach. This is why Apple is expanding its services to other devices. They know they can't compete in the streaming tv world with a lock-in approach.
Score: 11 Votes (Like | Disagree)
markaceto Avatar
25 months ago
A drop in the bucket for subscriptions is where Tim does his best work.
Score: 7 Votes (Like | Disagree)
JosephAW Avatar
25 months ago
If Apple is true to form then their pricing will be double other streaming services.
Score: 7 Votes (Like | Disagree)

Top Stories

lg wing

LG Considering Exit From Smartphone Business, Halts LCD Production for iPhone

Wednesday January 20, 2021 5:38 am PST by
LG is considering exiting the smartphone business entirely amid declining shipments and accrued losses of $4.5 billion over the past five years (via The Korea Herald). LG CEO Kwon Bong-Seok cautioned staff earlier today that the company is re-evaluating its presence in the smartphone industry: Since the competition in the global market for mobile devices is getting fiercer, it is about...
google maps detailed street level e1611052089473

Google Maps Gains Enhanced Street-Level Detail in Four Major Cities

Tuesday January 19, 2021 2:34 am PST by
Google Maps has quietly been updated to include significantly more detailed street-level information in a handful of key cities around the world. Upon zooming in, Google's maps for Central London, Tokyo, San Francisco, and New York now benefit from shapes and widths that match the scale of roads more accurately. Meanwhile, enhanced graphical representations of sidewalks, crosswalks,...
2019 mac pro side and front

Tim Cook Gifted Donald Trump 'First' 2019 Mac Pro

Wednesday January 20, 2021 5:45 pm PST by
Apple CEO Tim Cook gifted former United States President Donald Trump with the first 2019 Mac Pro that came off of the assembly line in Austin, Texas, according to a financial disclosure report that was released today (via The Verge). "Mac Pro Computer, the first created at the Flex Factory in Austin, Texas," reads the entry, which values the machine at $5,999, the base price for a Mac Pro....
airpods max sim ejector

AirPods Max Headband Removable With Just a SIM Ejector Tool, Hinting at Interchangeable Headbands

Tuesday January 19, 2021 8:25 am PST by
It is possible to remove the headband of AirPods Max with just a standard SIM card ejector tool, hinting at the possibility of interchanging headbands to achieve a different colorway. Image via Prelook In December, MacRumors revealed the large variety of AirPods Max ear cushion color combinations when it became clear that they were magnetically attatched and available for sale separately....
iphone 5s black slate

Images of Unreleased iPhone 5s in Black and Slate Shared Online

Sunday January 17, 2021 9:47 am PST by
Twitter user @DongleBookPro has today shared images of a prototype iPhone 5s in an unreleased Black and Slate color. The iPhone 5s was launched in September 2013. The device featured Touch ID, a 64-bit processor, and a True Tone LED flash for the first time. Other new features included a five-element lens with an f/2.2 aperture, a 15 percent larger camera sensor, Burst Mode, and Slo-Mo...
iphone 12 vs iphone 12 mini

Apple Shifting Some Production From iPhone 12 mini to iPhone 12 Pro to Meet Demand

Wednesday January 20, 2021 8:12 am PST by
Apple has reportedly cut production of the iPhone 12 mini by two million units to create more manufacturing capacity for the iPhone 12 Pro, according to a new Morgan Stanley investment note seen by PED30. Apple is believed to have made the switch for the first quarter of 2021 in an effort to combat continuing lead times for the more popular iPhone 12 Pro. iPhone 12 Pro lead times remain ...
Apple VR Feature

Bloomberg: Apple's First AR/VR Headset 'Pricey, Niche Precursor' to More Ambitious AR Glasses and Could Launch Next Year

Thursday January 21, 2021 3:27 am PST by
Apple's first virtual reality headset will be a "pricey, niche precursor" to a more ambitious augmented reality product, according to a new report from Bloomberg's Mark Gurman. As a mostly virtual reality device, it will display an all-encompassing 3-D digital environment for gaming, watching video and communicating. AR functionality, the ability to overlay images and information over a view...
shot on iphone 12 apple

Apple Highlights Photos Shot by iPhone 12 Users: Portraits, Cityscapes, and More

Tuesday January 19, 2021 6:05 am PST by
Apple today shared a gallery of photos shot by customers using the iPhone 12 mini, iPhone 12, iPhone 12 Pro, and iPhone 12 Pro Max, with scenes including cityscapes, landscapes, portraits of people, and more at day and night. Shot on iPhone 12 Pro Max by "NKCHU" in China (top) and shot on iPhone 12 Pro Max by Rohit Vohra in India (bottom) iPhone 12 mini and iPhone 12 models have a dual camera ...
Apple and Hyundai feature

Apple Car Production Again Linked to Kia Motor's US Plant in Georgia

Tuesday January 19, 2021 4:19 am PST by
Hyundai intends to transition the company's Apple Car involvement to its Kia brand as part of an internal arrangement that could see production move to the U.S., according to a new report today. On Sunday, Korea IT News reported that Apple and Hyundai are seeking a partnership agreement for the upcoming Apple Car by March, and that the electric vehicles could be made at a Georgia factory...
iPhone 13 Notch Feature

iPhone 13 Rumored to Feature Smaller Notch, Pro Model Cameras to Use Larger Image Sensor

Thursday January 21, 2021 1:38 am PST by
Apple's iPhone 13 series will feature a redesigned Face ID system that will allow for a smaller notch at the top of the screen, according to a new report today. The rumor comes via hit-and-miss Taiwanese industry publication DigiTimes, whose supply chain sources also claim that the ultra wide-angle lens in Apple's next-generation iPhones is due for an upgrade. The next-generation iPhones'...