Apple TV+ Has Up to 40 Million Subscribers, Lost $1-2 Billion in 2021 [Report]

Apple lost $1-2 billion on Apple TV+ last year as it works to build up content and attract subscribers, according to Bernstein analyst Toni Sacconaghi.

In a note to investors (via Investing.com), Sacconaghi predicts that Apple TV+ will likely never be a big money maker for Apple; however, it could help the company grow its service business.

"Given Apple's essentially non-existent disclosures around Apple TV+, gaining conviction behind the total number of subscribers and content spending figures is tough. Having said that, we considered third party estimates and our own bottom up analysis and conclude that Apple may have 20 - 40M paying subscribers, annual revenues of $1-$2B, and annual content spending of ~$3B+," wrote the analyst. "While free trials and accounting considerations cloud the financial impact of Apple TV+ to Service's profitability, we believe that a 'true' P&L (assuming no free trials) would suggest an operating income loss of ~$1B in 2021 (~1% of total company), and potentially ~$2B on a cash basis."


Bernstein concludes, "Apple TV+ will likely never be material financially for Apple in and of itself, but it is an additional subscription-based revenue stream that can help its Services business grow, and is a powerful bundling vehicle - given the marginal cost of a free subscription is essentially zero."

Sacconaghi has a market perform rating on Apple with a $170 price target.