MoffettNathanson survey: 62% of Apple TV+ subscribers were on free offers in Q4 2020, only 30% said they plan to renew at the regular $4.99/month price
Apple has said it wants to bulk up revenue from services — including Apple TV Plus, which is just over one year old.
VarietyTodd Spangler
Context & Ripple Effects
Apple launched TV+ in November 2019 at $4.99/month with a full free year attached to new-device purchases — a deliberate trade of near-term revenue for installed base, after earlier deliberation over a higher $9.99 standalone price. The MoffettNathanson survey is the first hard read on whether that trade converts: 62% of Q4 2020 subscribers were still on free offers, and only 30% said they would pay the regular price.
First-order effects
Apple's headline subscriber count overstates its paying base by more than half — the services-revenue story it tells investors rests on a cohort where roughly seven in ten users have never been billed.
Second-order effects
With willingness-to-pay this thin at $4.99, Apple's later lever is squeezing existing payers instead: the service has since raised prices repeatedly, including the move to $12.99 in the US — a bet that loyal payers will absorb hikes that free-trial users already declined.
Third-order effects
The pattern points to a structural verdict on device-subsidized streaming: even at ~45M subscribers, TV+ was still losing $1B+ annually against $5B+/year content spend, meaning free-trial acquisition built scale without an economic engine — the model survives only as long as Apple treats it as a hardware accessory rather than a standalone business.
The trend: Device-bundled streaming subscriptions are hitting the conversion wall, forcing platforms to choose between honest standalone pricing and permanent subsidy from another business line.
So you now get 3 months of Apple Arcade, 12 months of Apple TV+ (and often six months of Apple Music) free with a new Apple device https://twitter.com/...
@ballmatthew And yet they can't put a small dent on competition (Spotify in music; Netflix / Disney in video; Anyone in Games). Apple is a whale with profits and cash flow from hardware (iPhone, AirPods) + AppStore revenues. But how did it lose it's place in Music to Spotify on U…
@JNavok Apple One is the bundle of 2nd and third place services But pre-loaded and discounted to the point of negative gross margins Often in categories competitors aren't allowed to compete or, if they do, they can't make money Seems fair
Good. It's what they deserve. I'm on a free membership myself and I will be canceling when it's done. They don't churn out enough content. I'll resubscribe for 1 month to binge Morning Show s2. That's how it'll be from now on. It's not worth the price. Do BritBox or Acorn instead…