Apple’s new Apple TV+ service, which we got a peek at on Monday, will have “dozens” of original shows when it launches this fall. This puts Apple in a position where while it can have success in the long run, but it will be burning through huge amounts of money for years to get there.
Business Insider saw an investors note from Morgan Stanley, which says “Apple needs to have the appetite to spend enormous sums for years — without generating much revenue in return.”
The Morgan Stanley note says the media business isn’t going to be the immediate cash cow type of business that Apple is used to. The Cupertino firm will be required to lay out huge sums of money to sign top-tier talent to produce new, quality content from scratch for the service. Apple TV+ may be in the red for years before it hits a critical mass of users to allow the service to support itself.
Apple will have to spend loads of money to make the service a success, as content is king and the company needs to have plenty of content to draw eyes to its screens. Apple will burn through loads of cash.
Morgan Stanley pointed to Netflix as an example, it is estimated that Netflix will have burned through $13 billion to turn a profit.
Apple has yet to have announced pricing for their new streaming service. Stay tuned.