Apple TV+ could be ahead of Hulu, Disney+ in U.S. subscribers

Apple TV+ subscriber numbers could be stronger than many think


Apple TV+ could have 26 million paying subs by 2025; 2.6 million currently
Apple TV+ is off to a roaring start, it seems.
Photo: Apple

A new analyst report suggests 33.6 million customers were ready and waiting to subscribe to Apple TV+ before its November launch and estimates that number could grow to 40 million subscribers by the end of this year.

If accurate, the numbers from TV industry market analyst Ampere Analysis would put Apple TV+ ahead of Hulu and Disney+, and already at more than 50% of Netflix in the United States.

Ampere’s estimates are based on phone polling the company did ahead of the Apple TV+ launch. Using polling company Qriously, the firm carried out 10-minute phone interviews about Apple TV+ and HBO Max.

Here are subscriber numbers as they currently stand:

  • Netflix: 61.3 million
  • Amazon Prime: 42.2 million
  • Apple TV+: 33.6 million
  • Hulu: 31.8 million
  • Disney+: 23.2 million

There is good reason to be optimistic for the future. “When we first polled awareness of Apple TV+, prelaunch, we found it had pretty strong awareness,” Richard Broughton, research director at Ampere Analysis, told Cult of Mac. “There were some strong initial metrics in the run-up to the launch of Apple TV+.”

According to the firm, around 38% of customers had heard of Apple TV+. For a service only announced at the start of 2019, that’s pretty impressive, Broughton said.

Apple TV+ is free to upgraders

One big reason Apple TV+ is likely to get strong subscriber figures immediately is because Apple is giving away so many subscriptions, Broughton said. Apple currently offers a free subscription to the service to anyone who buys a new iPhone, iPad, Mac or Apple TV box. As a result, many are willing to sign up. Even though, as Broughton noted, Apple TV+ offers a content library that’s “fairly small at the moment when compared to other services.”

But this is where Apple’s interconnected ecosystem pays off. Unlike a company such as Netflix, Apple does not rely on Apple TV+ subscription fees as the sole yardstick of success for the service. Like Amazon Prime Video, which helps sell Amazon Prime, Apple TV+ is a value-added service that makes Apple devices more tempting.

“Even if Apple was to encourage just 10% of their device base in the U.S. to replace devices six months sooner than they would … have done per year, you wind up with a figure of about $400 million in terms of the content spend Apple can afford,” Broughton said. “That’s just from those conservative estimates in the US alone.”

Speeding up the upgrade cycle.
Speeding up the upgrade cycle could be a win for Apple TV+.
Photo: Ampere Analysis

Can Apple TV+ win over even more subscribers?

With more and more people watching video on mobile devices, the importance of the iPhone in driving subscribers to Apple TV+ is crucial, Ampere said. If the average iPhone costs $766 with a margin of 40%, it means Apple makes $300 net profit per device, Ampere said. Bringing forward upgrades means an amortized net profit of roughly $100 per year per iPhone sold. The implication is that Apple can support $50 per year per customer buying content like Apple TV+ — all from a 17% faster device-replacement cycle.

Ampere’s survey suggests that, currently, around one in five people would be willing to replace their devices sooner, or buy a new device, to gain access to Apple TV+. That leaves four out of five who won’t. That means the inclusion of Apple TV+ with new devices won’t drive a large number of new sales, but could prompt some customers to upgrade a bit sooner. That would cancel out some of Apple’s giant spending on Apple TV+.

It’s still too early to tell whether this will come off as Apple hopes, but Broughton said he is confident that Apple TV+ is off to a good start. He thinks that early success should make the service competitive in 2020 and beyond, especially if it keeps knocking it out of the park in terms of programming.

Hopefully it won’t be too long before Cupertino gives its own Apple TV+ subscriber numbers. There’s a possibility Apple CEO Tim Cook could share those results next week when the company releases fiscal first-quarter earnings.