Apple TV+ launched amid much fanfare in November last year, but the on-demand video service is struggling to gain traction, with less than 10% of eligible customers signing up, according to Bernstein.
Analyst Toni Sacconaghi revealed on Tuesday that fewer than 10 million people have taken advantage of the free 12-month trial for the TV service, a number that he believes is “surprisingly low”.
While industry heavyweights such as Netflix and Amazon have a catalogue of original TV shows and well-known content including blockbusters, Apple only adds series and films it has personally invested in.
Sacconaghi says that the limited content offerings may be one reason why Apple TV+ has failed to resonate with the general public since it went live three months ago.
Back in December, a UBS-hosted panel ruminated on the potential success of the service and claimed that Apple would require a “mega-hit original series” to attract new subscribers and keep current customers around.
Apple has not released any official subscriber numbers for the service, but it appears to have got off to a more rocky start than Walt Disney’s Disney+ service, which launched with a catalogue of Star Wars films and other popular franchises.
While Apple TV+ was front and centre in the company’s advertising late last year, Bernstein believes that Apple has yet to “effectively promote” the service.
With in excess of 1.5bn active devices, Sacconaghi urged the company to directly leverage its massive installed base to increase adoption rates.
Bernstein also believes that the lukewarm reception is a reality check for Apple, which is eager for its services segment to become a prime revenue lever.
Apple’s services did miss growth expectations in Q1, but it still accounted for 18% of overall revenue during the period.
Evercore ISI is more positive, expecting Apple’s services revenue to deliver revenue of $100bn or more by 2024.