Apple new TV streaming service to be $9 billion business by 2025, analyst says

The soon-to-be-launched Apple TV streaming service could become a $9 billion-per-year business by 2025, according to a report from CNBC, citing an estimate from Morgan Stanley analyst. The Apple TV+ is a streaming service is schedule to launch in November and will cost $4.99 per month for access to a variety of original TV shows and movies bankrolled by Apple. Apple will bundle a free year of the service with the purchase of a new product such as an iPhone or iPad.

Apple first announced the subscription video on demand web television service during its March 25 Apple Special Event held at Steve Jobs Theater.  Morgan Stanley analyst Katy Huberty predicted in a note distributed on Tuesday that growth in Apple’s services business will hit 20% next year, boosted by its new Apple TV+ streaming service.

According to CNBC, Huberty is bullish on Apple TV+ growth, even if only a small fraction of people who pick up the free year end up paying to subscribe. “With an attractive price point at $4.99/month, and wide initial distribution to the Apple installed base via the bundled free year offer, we estimate Apple TV+ can become a $9B revenue business with 136M paid subscribers by FY25, assuming just 1 in every 10 Apple user pays for the Service by FY25,” Huberty wrote.

Early this month, Apple CEO Tim Cook was reported as saying that television is “of intense interest to me and other people here.” He added that Apple has “started focusing on some original content” which he called “a great opportunity for us both from a creation point of view and an ownership point of view.

It’s not all that rosy for Apple. The tech giant is entering a competitive market as Disney prepares its streaming service launch just days after Apple. NBCUniversal also plans its own service called Peacock, and AT&T’s WarnerMedia will launch a service under the HBO brand name.