Will Apple TV+ ever become profitable?

At the end of June, Bernstein analyst Toni Sacconaghi estimated that Apple TV+ has between 20 million and 40 million paying subscribers, generating between $1 billion and $2 billion of revenue per year. The Motley Fool’s Adam Levy on Tuesday wonders, “Will Apple TV+ ever become profitable?”

Adam Levy for The Motley Fool:

[Apple TV+’s] subscriber satisfaction is improving. The percentage of subscribers likely to keep their subscription improved to 73% from 54% a year ago.
As the service matures, Apple will learn what draws in and keeps subscribers, and as the company aligns content spending with subscription revenue, Apple TV+ should move toward break-even profitability.
The real value of Apple TV+, Sacconaghi argues, is in the potential for it to be part of a bundle of Apple subscriptions. Apple already bundles Apple TV+ with Apple One, which also includes Apple Music, Arcade, News, and more Apple services. But the streaming video service could be used to get people to subscribe to an iPhone and commit to periodic upgrades on their devices.
Indeed, access to some top critically acclaimed series and films on streaming may be an effective sweetener for customers considering an Apple subscription offering, even if they wouldn’t consider the service by itself. That could, in turn, fuel Apple to spend more on content for Apple TV+, creating a virtuous cycle.

MacDailyNews Take: In short, Apple doesn’t really care about the profitability of Apple TV+ by itself. Apple TV+ is (an important) part of the Apple ecosystem value proposition. Like Amazon Prime, Apple TV+ another component of Apple One that attracts subscribers and helps – especially via multiple excellent series – to retain them.
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