Apple reported record-setting sales of nearly $92 billion for the three months that ended 2019 — but Apple TV Plus, the flashy new subscription-video service it bowed last fall, wasn’t part of the tech giant’s growth story.
Apple TV Plus revenue “was immaterial to our results” for the period, CFO Luca Maestri told analysts on the company’s earnings.
The exec’s comments are not surprising: Apple is giving away Apple TV Plus free for one year to customers who buy a new iPhone, iPad, Apple TV, Mac or iPod touch. According to estimates by Ampere Analysis, the “vast majority” of Apple TV Plus’s roughly 33.6 million U.S. users as of the end of the year were not paying subscribers.
Over time, Maestri said, Apple expects that over time, Apple TV Plus will become a bigger part of the company’s growing services business, which increased 17% year-over-year in the quarter ended Dec. 28, Maestri added.
Apple is primarily measuring the success of Apple TV Plus on number of subscribers, CEO Tim Cook said on the earnings call. But he didn’t shed any light on how many subs have signed up for the service at this point, except to claim that “Apple TV Plus is off to a rousing start.”
Cook added that “the product itself is about storytelling… We think if we do that well, there will be some number of [shows] that are critically acclaimed.”
Asked whether Apple has an advertising opportunity with Apple TV Plus, Cook responded, “we feel strongly what that customer wants is an ad-free product,” echoing Netflix’s often-reiterated position that it isn’t considering selling ads.
Apple TV Plus has more than a dozen original TV series and movies, including “The Morning Show” starring Jennifer Aniston, Reese Witherspoon and Steve Carell; M. Night Shyamalan’s thriller “Servant”; “Oprah’s Book Club”; and Kumail Nanjiani and Emily V. Gordon’s docu-series “Little America.”
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