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State of the Screens

The One Where Apple Tried to Buy Its Way Into Hollywood

By November 7, 2019No Comments

Apple is making a big move into the streaming wars with the November 1st launch of Apple TV+.

The Big Picture: Apple generated $13.7B in profit last quarter, but iPhone sales dropped 9%.  The iPhone is no longer a growth story, and the company is preparing for a future driven by services and/or subscription revenue.

Key details for Apple TV+:
1) 
No ads
2) Available in 100+ countries
3) $4.99 per month after free trial
4) $6B+ in original content spend
5) 9 original shows
6) No 3rd party content

Apple’s revenue from services (YoY growth):
1) 
2016 – $24.3B
2) 
2017 – $30.0B (↑ 23%)
3) 2018 – $37.2B (↑ 24%)
4) 2020P – $48.6B

Quick math on the potential opportunity for Apple TV+:
1) Global Apple customers – ≈ 900M
2) Conversion rate – 10%
3) The potential customer base for Apple TV+ – 90M
4) Monthly subscription cost – $10
5)
 Revenue/month – $900M
6) Revenue/year – $10.8B

More #1: Apple Plays the Underdog in Streaming Wars

More #2: Apple TV Plus Chiefs on Building the Ambitious Video Venture From Scratch

More #3: Inside Apple’s High-Flying Bid to Become a Streaming Giant

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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