Apple just can’t stop touting its surging revenue from subscription services. But when it comes to Apple TV+ subscriber numbers, Cupertino is keeping suspiciously quiet.
“2019 was a historic year” for Apple’s services business, CEO Tim Cook said Tuesday during the company’s latest record-smashing earnings call. He then went on to drop specific numbers about services like the App Store and Apple Pay. But when it came to new services like Apple TV+, Cook kept things decidedly vague.
Cook loves to reiterate that Apple TV+ serves as a creative place for the world’s best storytellers. And the story he’s masterfully spinning about the streaming video service is a great big mystery.
“Apple TV+ is off to a rousing start,” Cook said, “and I want to congratulate the entire team at The Morning Show for their multiple Golden Globe nominations.” Cook went on to single out stars Jennifer Aniston and Billy Crudup, who racked up wins for the newsroom drama during Hollywood’s awards season.
But when it came to specifics in Cook’s prepared statement, there weren’t any. “We continue to focus on telling stories that matter, like Little America, which recently premiered to widespread critical acclaim, with much more great content still to come,” he said.
Apple services hit a new high
Growth in Apple’s broad services division more than picked up the slack for faltering Mac and iPad sales in the last quarter, which ended on Dec. 28, 2019. Services grew 17% to an all-time record of $12.7 billion for the quarter, Apple said. Both Apple Music and iCloud generated record revenues. In that regard, Cook’s strategy to turn Apple device owners into subscription-paying customers is clearly working.
However, big questions remain about Apple TV+, the streaming video service that launched last November. And the same could be said for Apple Arcade and Apple News+. (Cupertino rolled out those subscription gaming and premium news services in 2019 as well.)
In fact, Cook’s handling of Apple News — the free service baked into iOS and macOS — illustrates the canny way the CEO dribbles out the data. Note the way he talks about Apple News versus Apple News+.
“Apple News now draws over 100 million monthly active users in the U.S., U.K., Australia and Canada, and provides a curated and personalized experience using on-device intelligence to recommend stories,” Cook said. “Apple News+ continues to add new titles, offering subscribers seamless access to the world’s top publications across all of their devices.”
For the free service? A noteworthy gain in users, with solid numbers. For the paid service, which some news publishers are reportedly unhappy about? Nothing but positive generalities.
Huge potential for Apple services
When it comes to Apple TV+, it actually seems understandable that Apple declined to release hard numbers. (This is not an “Apple is doomed” piece.) The service launched with a small catalog of original shows and faced a harsh critical reception, even though viewers responded well to the shows. But you can bet that if Apple TV+ achieved stellar subscriber numbers, Cook would have crowed about it during today’s earnings call. Same goes if the service set some kind of streaming record.
As Cook noted, Apple priced the video service aggressively at just $4.99 per month, undercutting competitors like Netflix and Disney+. Cupertino also gave away one-year Apple TV+ subscriptions to just about anybody who bought an Apple device recently. Apple says its “active installed base of devices” surpassed 1.5 billion last quarter. That represents a staggering number of people — and a huge potential market for Apple TV+.
“We see great promise for these recently launched services, and we’re optimistic about what we’ve got in the pipeline for each of them,” Cook said.
No Apple TV+ subscriber numbers
And yet, Cook said literally nothing specific about Apple TV+ subscription or streaming numbers today. Apple CFO Luca Maestri said Apple TV+ “did not have a material impact in our December quarter results.” Nevertheless, he said Apple remains confident in the service’s future. And he said Apple is boosting its goal of 500 million paid subscriptions to all services to 600 million by the end of 2020.
When an analyst asked Cook during the call how he gauges the success of Apple TV+, the CEO said, “We are primarily measuring ourselves on the number of subscribers…. That said, our product itself is about storytelling.”
From day one, Cupertino pitched Apple TV+ as a platform for “the world’s greatest storytellers.” And it’s clear that Cook and his execs will tell the Apple TV+ story exactly how (and when) they want. Right now, that means more vague happy talk about producing excellent content and the promise of a long-term payoff.