A couple of weeks before Apple announces its long-awaited streaming video service, a firm of analysts has suggested that 100M subscriptions could be ‘a realistic medium-term goal’ for the company. This compares to the roughly 150M Netflix subscribers.
Wedbush cautions that the number is predicated on Apple bringing on board major content partners, as well as purchasing content owners, as it would take too long to rely solely on creating original content …
Wedbush says that Apple has a lot of catching up to do with existing players.
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.
Acquisitions are key to rapidly building its subscriber-base, argues the firm.
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 […]
100 million subs a realistic medium-term goal. 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.
Wedbush suggests that achieving this goal would add around $15 per share to Apple’s valuation.
The official invitation to Apple’s event on March 25 makes it clear that the streaming video service is the focus, using the tagline ‘It’s show time’ and using a film reel countdown animated graphic.
It also seems likely that Apple will present its subscription-based plans for Apple News – if it has been able to agree to terms with publishers – and we may also get an upgraded Apple TV app.
There is less hope for hardware announcements. Although AirPods 2, AirPower, a new 9.7-inch iPad, and a spec-bumped iPad mini are all in the pipeline, it’s been reported that these are ‘unlikely’ to be announced at the event. However, the new iPads could perhaps be announced in a press release around the same time. It’s unsurprisingly hardware that most interests 9to5Mac readers.
The March 25 event will be live streamed, and we’ll of course be bringing you full coverage.
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