Apple TV+ attracts high pre-launch awareness | Media Analysis | Business
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Only hours before Apple gets to grips with the direct-to-consumer arena on 1 November, research from Ampere Analysis has discovered strong awareness already for Apple TV+ offer.
ampere AppleTV 30Oct2019
The study found that nearly two-fifths (38%) of US respondents said they were aware of the Apple TV+ product, even higher than some peer group services – such as HBO Max – which is currently running at 30%. Crucially, given this could the constituency that could make or break the service, awareness among Apple device owners was 51%. For non-Apple device users this was 25%, and also skews towards a younger demographic. Yet while younger Apple owners are the most likely to subscribe, their lack of interest in Apple TV+ original content presents a potential barrier to sign-ups.

Looking more at age demographics, Ampere found that Apple’s decision to include the TV+ service with new device purchases appeals particularly to the younger consumers in the research. Ampere found that 21% of Apple device owners are likely or highly likely to subscribe, compared with 13% of non-Apple owners. This rises to 29% of the 18-24 age group, and drops to 14% of 55-64-year olds, and 9% of those aged 65+.

Overall, 9% of respondents said they would buy a new Apple device to get a year’s free access to Apple TV+ and a further 9% said it would encourage them to replace their existing Apple device sooner. Ampere estimates that there are 81 million Apple device-owning households and if 10% were to replace their device six months earlier than planned because of TV+, it would generate an additional $400 million in net device margin for Apple. The same analysis for non-Apple customers suggests potential net device margin of nearly $120 million. So even under conservative device purchase and replacement assumptions, Apple will be able to offset significant sums of its US content expenditure.

Yet for all of the optimism, Ampere also found that a lack of interest in Apple TV+ content as the biggest barrier to subscribing, alongside households saying that they already have enough SVOD services to keep them happy. Apple’s competitive price point of $4.99 is not a seen as a barrier.

The survey found that The Morning Show – the flagship launch original a comedy drama series starring Jennifer Aniston, Reese Witherspoon and Steve Carell - would appeal to 35% of Apple customers compared with 25% of non-Apple device owners. See, a futuristic sci-fi drama starring Jason Mamoa, has a similar and strong appeal.

“The core target group for Apple TV+, in the short term at least, will be existing device owners aged 18-34,” predicted Minal Modha, consumer research lead at Ampere Analysis. “Given the popularity of Apple devices in households, there’s already a large potential customer pool in the US. To sustain subscriber growth for TV+ in the longer term, Apple will want to move beyond its own device universe, and ensure it appeals to those outside its brand ecosystem.”

Apple has a different business model from the other new platform launches in that it is able to use Apple TV+ to incentivise and accelerate device replacement - and therefore generate larger cash flow through those sales to fund content spend. While the research found that the main barrier to uptake of the service is a lack of interest in the content on offer, this is mainly due to Apple being new to the original content space and consumers not knowing what to expect. As Apple TV+ begins to roll, we expect this barrier will be overcome.”