Analysts see 100 million subscribers for Apple’s streaming service within 3 to 5 years

“Yesterday Apple officially announced a press event that will take place on March 25 at the Steve Jobs Theater in Cupertino HQ to announce the long-awaited streaming video service that will compete with the likes of Netflix, Disney, Hulu, and others as Cook & Co. officially enter the streaming content arms race,” Wedbush analysts Daniel Ives and Strecker Backe write in a note to clients.

“The new streaming video content service, which will likely officially launch in the fall, is still in the late planning stages and will include a host of content partners (e.g. HBO remains the biggest X variable) as well as original content from Apple with the company currently in production deals with Oprah, Reese Witherspoon/Jennifer Aniston, Steven Spielberg, and a handful of other projects as the company is spending roughly $1 billion on original content this year. However the company is definitely playing from behind the eight ball in this content arms race with Netflix, Amazon, Disney, Hulu, and AT&T/Time Warner all going after this next consumer frontier investing significantly more dollars ($20 billion combined and counting per annum) on content,” Ives and Backe write. “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 (a24, Lionsgate, Sony Pictures, CBS/Viacom, Netflix, MGM) around content over the coming year to ‘double down’ and drive the services flywheel especially with its new video subscription service set to be rolled out.”

Ives and Backe write, “If Apple executes with minimal speed bumps and aggressively acquires content given the company’s massive installed base and unmatched brand loyalty we believe reaching 100 million subs in the medium term (3 to 5 years) is a realistic goal that could translate into a $7 billion to $10 billion annual revenue stream over time for Apple and further cement its installed base and halo effect.”

Read more in the full article here.

MacDailyNews Take: With Apple Music already over 56 million is under four years, we see a 100 million subscriber goal for a video streaming service that will appeal to more people than music as eminently achievable within 3-5 years – especially if Apple offers value bundles that allow subscribers to combine services (Apple Music, Apple Video, iCloud storage, etc.) for a lower total price than paying for each individually.

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  1. The thing that could kill all this growth is subscriber fee fatigue with everybody and his brother wanting to charge you $9.99 to $14.99 a month. It also makes me aware how much waste is in a standard cable subscription like Spectrum paying for channels we do not watch.

    People may not save much money overall but they will be able to target their interests better. Depends on how TV centric your life is focused.

  2. I don’t see it. Apple is a tech company and, to preserve its corporate image it can only do bland…

    And people are fed up with monthly charges.

    Unfortunately Apple has lost the plot everywhere else. People aren’t prepared to pay the prices they charge for hardware which looks pretty bu

  3. Apple’s foray into services represents nothing but corporate greed. It began out of a desire to sync our stuff, namely Contacts, etc. That was a noble cause.

    Now tell me again please, why exactly did Apple want everyone to move all their music into iCloud? Was it so you have to download it again just to hear it? Or perhaps to provide a “solution” to customers who couldn’t afford Apple’s ridiculous prices for enough memory to continue to store your own stuff on your own devices?

    How’s iCloud working for you lately? I can assure you that for folks who find themselves in a location with less than excellent WiFi, it becomes a regrettable reliance.

    Apple apparently doesn’t have any ability to brain storm anymore. Customers might tolerate one monthly charge, but since Apple has been forcing the notion of subscriptions upon all the app developers, people who are more than occasional light users could very well have several different annual or monthly charges related to being an Apple customer. Somehow, I feel like the service here, like an ATM machine that Apple signed up for!

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