Apple TV Service Could Earn $2.4 Billion Its First YearOn March 17, a report noted Apple‘s plan to get into the digital TV space by offering its own subscription-based service with 25 channels (including much-desired options like ESPN and CBS). Naturally, some media outlets got curious about how much Apple might make from this new venture. Business Insider Intelligence (BII) ran some numbers and estimated the tech company could rake in about $2.4 billion in its first year alone.
BII’s figure takes into account a variety of factors, the first being Apple TV shipment projections through the end of 2016. The publication also estimated the current amount of active Apple devices that would be able to access the new TV service. BII also factored in how competing services (like Dish Network’s Sling TV, which is also offering access to ESPN) might impact Apple’s ability to obtain and keep subscribers for its TV service.
BII guessed Apple would charge $35 a month for its TV offering (initial reports indicate the tech giant could offer the service for anywhere from $30 to $40 per month). Assuming Apple TV attracts 7.4 million subscribers by the end of 2016, the tech company would earn over $2 billion over the course of the year (and that’s only from U.S. consumers).
Business Insider Intelligence notes how Apple TV’s revenue is only likely to increase each year as more U.S. households become “cord cutters,” or opt for digital entertainment options, like Netflix or Apple’s upcoming service, instead of traditional cable subscriptions. Plus, BII’s $2.4 billion projection didn’t include the amount Apple would potentially receive from the sale of its devices by subscribers looking to watch the TV service offerings on various screens.
Overall, Apple stands to gain a lot of monetary reward by launching its own TV subscription service. The upcoming product is expected to arrive in the fall of 2015.