Raising Prices, Launching Ads Helped Apple TV+ and Prime Video Juice Up Their Revenue
The two streaming services are normally very tight-lipped about their finances, but Parrot Analytics has data on how the two prospered after recent changes.
There’s no doubt that price increases and the introduction of ads to formerly ad-free streaming plans are going to make for a few unhappy customers. Apple TV+ and Prime Video certainly know this; the former raised its price by 43% last October, and the latter forced all customers to either accept ads in their existing subscription or pay an extra $3 per month to return to ad-free in January. New data from Parrot Analytics shows that however many customer defections those moves may have caused, they have proven to be solid financial decisions for the two streamers.
Key Details:
- Apple TV+ saw a 33% revenue jump in the United States the quarter after raising prices last year.
- Prime Video enjoyed almost a 20% revenue climb after the introduction of ads.
- Each streamer saw an ARPU spike of more than $1 after their respective moves.
Apple keeps almost all details about Apple TV+ a secret, including its subscriber totals and revenue. Nevertheless, Parrot is able to report that the streamer has accounted for a bigger and bigger piece of the company’s revenue from subscription services. In the second quarter of 2024, Apple made over $24 billion in revenue from these services, and Apple TV+ has more than doubled its share of that revenue since its launch in 2019.
The data from Parrot shows that Apple saw a revenue increase of 33% in the United States and Canada in the quarter immediately following its price increase. Average revenue per user (ARPU) jumped from a little more than $6 to over $8.
Similarly, Prime Video saw a spike in overall revenue and ARPU after rolling out ads on its previously ad-free tier. Total revenue increased by 19.2% the next quarter, and ARPU rose from $6 to more than $7 once the rollout was complete.
Parrot did not measure how much churn these two streamers experienced after making their respective adjustments, but it did specify that both saw a number of customers cancel their accounts. However, the corresponding revenue gains were more than enough to offset these defections.
From the customer’s perspective, Parrot’s data answers the important question of why streamers are continuing to make moves that would seemingly alienate a large swath of their subscribers. The simple but unfortunate answer is that largely, such moves are better for their respective companies in the long term, even if they lose a few accounts in the meantime.
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Apple TV+
Apple TV+ is a subscription video streaming service for $9.99 a month that includes high-quality original shows and movies including Best Picture winner “CODA,” popular sitcom “Ted Lasso,” and dramas like “The Morning Show” and “Severance.” Apple TV+ is also home to MLB baseball games on Friday nights and MLS Season Pass. Apple TV+ can be added as a channel on Prime Video.
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Amazon Prime Video
Amazon Prime Video is a subscription video streaming service that includes on-demand access to 10,000+ movies, TV shows, and Prime Originals like “The Lord of the Rings: The Rings of Power,” “Jack Ryan,” “The Marvelous Mrs. Maisel,” “The Boys,” and more. Subscribers can also add third-party services like Max, Showtime, STARZ, and dozens more with Amazon Prime Video Channels. Prime Video also offers exclusive live access to NFL Thursday Night Football.