Analyst: Apple TV streaming service on the way, could cost at least $40 a month

“Apple Inc.’s latest iteration of Apple TV unveiled last week did not include a streaming service, but analysts at J.P. Morgan are confident one is coming,” Trey Williams reports for MarketWatch. “In a note Monday, J.P. Morgan analyst Rod Hall estimated the tech giant will launch a service priced at $40 a month, a sum he described as conservative given Apple’s potential compared with rival services. ‘We believe Apple could easily charge more or construct channel bundles to end up costing the average consumer more,’ Hall wrote. ‘We believe our estimates are only a ballpark given the myriad possible TV package options and markups that Apple could encounter.'”

“J.P. Morgan’s list includes 27 cable networks such as Viacom Inc.’s, Comedy Central and AMC Networks Inc. The cost per subscriber is $37.85 for all 27 channels. Add on Time Warner Inc.’s HBO Now and the price jumps to $52.84,” Williams reports. “Hall based the list and pricing on Dish Network Corp.’s Sling TV, adding broadcast content he believes people would want to completely cut the cord on their cable service. The 25% markup for Apple is simply an assumption, Hall wrote.”

“Hall is forecasting shipments of the new Apple TV, priced at $149 and $199, to reach 24 million units in 2016, up from the 10 million units this year, and said that would result in a 2.1% upside in per-share earnings,” Williams reports. “But Hall believes that an eventual Apple streaming service would add another 1.3% to earnings.”

Read more, including Hall’s estimated content prices for cable companies vs. Apple, in the full article here.

MacDailyNews Take: As we’ve written before, Apple’s Internet TV service will certainly have to offer ESPN. It will also likely require the “Big Four” networks (ABC, CBS, Fox, NBC) – although it could launch with three out of four and eventually hammer out a deal with whichever one is being the most reticent.

Beyond the Big Four, if you go by ratings (total viewers), the top 20 cable networks are:

1. ESPN
2. USA
3. TNT
4. Disney
5. TBS
6. History
7. Fox News
8. FX
9. Discovery
10. AMC
11. HGTV
12. Adult Swim
13. Nick at Nite
14. A&E
15. ABC Family
16. Lifetime
17. Syfy
18. Food
19. TLC
20. Bravo

Source: Nielsen estimates, full year 2014

Of course, Apple TV will also need to continue providing access to Netflix, Hulu, etc. and likely start to offer Amazon Prime, etc. for subscribers of those services.

SEE ALSO:
Local media streaming app Plex coming to Apple TV – September 14, 2015
What Apple got right in Apple TV’s user interface – and what needs work – September 11, 2015
New Apple TV has the potential to do for television what iPhone did for mobile phones – September 11, 2015
Apple preps to conquer living room with all-new Apple TV – September 11, 2015
Hands-on with the all-new Apple TV – September 10, 2015
Gruber: Apple TV will define how all TVs will work in a few years – September 10, 2015
Here’s how much RAM is inside Apple’s iPhone 6s/Plus, iPad Pro and new Apple TV – September 10, 2015
New Apple TV sounds great, but where’s the 4K? – September 10, 2015

[Thanks to MacDailyNews Readers “Fred Mertz” and “Bill” for the heads up.]

24 Comments

  1. What about a movie subscription service? Is that off the table? Does Apple figure content is all about TV shows now in the post-Sopranos second golden era and movies don’t really matter anymore?

    1. Like Netflix, it will likely be priced per market. Streaming services aren’t translated across currencies the same way because you’re not buying a physical product.

      That being said, iPad Air 2 is a comparative deal for Americans buying at a Canadian Apple Store. $549, $659, $769 CAD = $415, $499, $581 ( USD ). This is nice change from the norm and takes the sting out of the rising USD for Canadians.

      Few Americans will go through the hassle of buying an iPad in Canada so it really doesn’t affect the marketplace and yet it still makes the device reasonably priced.

      I don’t expect Apple to keep this pricing for TOO long, but it’s nice while it lasts.

  2. It’s going to need MLB, NFL, MLS, BBC and a few other premium and semi-premium networks. Otherwise, many households will have to continue with a cable/satellite provider and Apple will just have duplicates of what they’ve already got.

  3. What’s the point of a bundle? So instead of paying Comcast or another cable provider, I get the privilege to give Apple more money. I cut the cord because I didn’t want to be captive to a bundle with a bunch of channels I never watch.

    If Apple wants to bundle, they should create a blended subscription of bundle + a la carte where I can choose which stations I want in my package. Then they can discount them by 5-10% for my bundle.

      1. I canno comment in monosyllables so that you might understand. I know that “big words” can be difficult for you, but read slowly and carefully, and have an adult help you with the hard parts. Lotsa luck, I’m pulling for you.

  4. Apple could have easily killed Netflix early on with its own movie TV shows streaming service. But it seems Eddy has a secret bank account into which Netflix deposits each month lazy money. This guy flaunts his expensive colorful wardrobes but he is not doing what he should have done long ago: negotiate a deal with the studios for movie streaming. Truly pathetic character!

  5. I can’t speak for everyone but for sports I don’t care about networks nearly as much as I care about my teams. I want to see my beloved Maple Leafs and Penn State, Arsenal, the Bills and the Union, I’ll gladly pay to see them but should I have to pay for entire networks?

    The future sports business model could be buying the games directly from the teams more or less eliminating the concept of a sports network.

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