Apple’s Launch of Apple TV+ not Going as well as Most Predicted

BY: STUART HIMMEL | Staff Writer

Apple’s Inc’s streaming video service has gained very limited traction with consumers which could represent a cautious approach as the company moves away from hardware sales.

Analyst estimated that fewer than 10 million consumers have opted for the free 12 month trial of Apple TV Plus which equates to 10% or fewer of eligible consumers.

Apple TV Plus may be failing to register with consumers due to its limited content offerings. Other streaming services such as Netflix or Amazon Prime offer reruns to well-known content while Apple only offers original shows with “The Morning Show” starring Jennifer Aniston, being the most high profile. Walt Disney’s Disney Plus service has benefited from the company’s pool of properties namely Star Wars and Marvel to name a few.

A panel hosted by Universal Serial Bus (USB) said that Apple TV Plus needs a mega hit original series to retain subscribers and may likely have to also acquire an asset with a big

backlog of catalogue content. Another potential reason why Apple TV Plus has not caught on with subscribers could be because Apple hasn’t been able to effectively promote TV Plus to its 1.5 billion device installed base. The company may also be deliberately scaling its promotions of TV Plus slowly to mitigate the negative accounting impact. Investors should watch closely the adoption of TV Plus as the take rate will provide a better indication of potential acceptance of the service as well as Apple’s ability to successfully launch new revenue generating services.

Shares of Apple are up nearly 80% from a June low although it the stock price has recently dropped on concerns over the Coronavirus outbreak. Apple services business grew less than expected in first quarter results which was seen as disappointing. Credit Suisse analyst suggested the business is key to long term success and is often cited as a driver of multiple expansion.