Analyst estimates Apple TV+ has up to 40 million paying subscribers

Bernstein analyst Toni Sacconaghi has estimated that Apple TV+ currently has between 20 million and 40 million paying subscribers, generating between $1 billion and $2 billion of revenue per year.

Eric J. Savitz for Barron’s:

The Bernstein analyst thinks Apple is spending north of $3 billion a year on content, including new programming and sports broadcasting rights, which suggests Apple is losing between $1 billion and $2 billion a year on the service.
He estimates Apple now has about 673 hours of content (not counting sports), compared with 30,000 to 50,000 hours each at Netflix, Amazon Prime Video, and Paramount.
Sacconaghi also noted that almost all of Apple’s programming is original, and generally of high quality, including CODA, which won the Oscar for Best Picture at the latest Academy Awards. “Apple TV+ ‘s focus is clearly on quality over quantity, consistent with Apple’s brand,” he wrote.
Sacconaghi said it seems clear that Apple TV+ will never be material to Apple’s financial performance; he points out that Netflix, with more than 200 million subscribers, has a market cap of $82 billion, or less than 4% of Apple’s $2.3 trillion valuation. So why is Apple doing it?
“Apple’s objectives for its services offerings are typically twofold,” Sacconaghi wrote. The first is to generate financial returns, and the second is to strengthen Apple’s broader ecosystem.

MacDailyNews Take: The vast, vast majority of Apple’s “about 637 hours” is as good or better than Netflix et al.’s best 637 hours.
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