William Gallagher
A sketchy report claims to have calculated the precise income Apple TV+ has made from key shows like "Severance," but the figure appear to be guesses that ignore how the company's business model is different to all other streamers.
"Severance" is unquestionably a much-talked about hit for Apple TV+, but aside from a Blu-ray release, the only income it can provide Apple is from the number of subscribers it attracts to the streamer. Apple has yet to release any subscriber numbers at all, but according to Deadline, one company is saying it has calculated the financial value of Apple TV+ shows.
Research firm Parrot Analytics has not made its full report public, and shares no details of what it calls its Content Valuation methodology. Unlike any other streamer, though, the only revenue stream for Apple TV+ is subscription.
There are a very few physical media releases of Apple TV+ series, but those appear to be driven by licencing agreements that the originating production company negotiates. Apple does not have a distribution arm making Blu-ray deals.
It's possible, too, that Apple could be getting income from where its service is shown in bundles with other streamers and television services, such as Canal+, or on airlines such as Air Canada. If Apple is being paid for those instead of just using them to spread its reach further, then neither Apple nor the bundling companies are reporting the sums.
Consequently, Parrot Analytics' calculation must be based on how subscriber numbers are believed to increase around the launch of specific shows or episodes. While it's not clear how accurate Parrot Analytics' estimates of this can be, but as long as its sourcing is consistent, the company could be expected to determine whether one show drew more subscribers than another.
"Ted Lasso" is claimed to have earned Apple over $600 milliion — image credit: AppleThe company goes further, though, in ascribing specific dollar values to some of the service's major shows. According to its figures:
- "Severance" season 1 earned over $200 million
- "Slow Horses" has earned $184.8 million
- "The Morning Show" has totalled $299.4 million
- Ted Lasso generated $609.4 million
Note that even if accurate, none of these figures take into account the production or marketing costs of any of these shows.
According to Deadline, Parrot Analytic also says that it examines how shows generate income in markets across the globe. This is another area, though, where Apple TV+ is unusual, because even if it sometimes fails, it always aims to get global rights to all of its shows and films.
Consequently, it is unlikely to ever emulate other broadcasters and licence local remakes of shows in different languages. As far as Apple is concerned, the shows are already in every territory, and another broadcaster exploiting its series would only be competition.
Retaining viewers
There is one further aspect to streaming that Parrot Analytics claims to report, but it's also problematic. Every streaming service has what's called a churn rate, which is how many people leave compared to how many join.
Again, Apple reports none of this. But Parrot Analytics claims to have calculated that shows such as "Severance" earn Apple income because they keep on attracting new subscribers.
That's certainly true, but despite Apple TV+ tending to space out its major shows, there are still times when it can't be clear what's driving subscriptions. That's especially the case since Apple TV+ started carrying MLS sports games, whose season runs for months.
Parrot Analytics further claims, though, that "Severance" has earned money from what its strategist Brandon Katz describes as "catch-up viewing and rewatches from hungry fans." That's claim must be based on the retention of subscribers, but it's not remotely clear how it could be determined that one series is keeping them watching and rewatching.
Perhaps Parrot Analytics' methodology includes audience questionnaires, as typical ratings companies use. But Parrot Analytics claims that it is this retention plus attraction of new subscribers that is how "Severance" has earned its $200 million figure.
The company also appears to claim that it is because of this retention that "Severance" season two is being released one episode per week, instead of dropping all at once. But season one did the same thing.
Overall, then, until the research methodology is explained and justified, the Parrot Analytics figures are questionable. But, again, whatever their foundation, if the sources are consistent, it is possible to make comparisons.
In which case it's fair to say that the figures show that "Severance" is a hit. It's also fair, though, to say we all already knew that — and that it's likely Apple does not care about the potential revenue from shows.
It's not that Apple is profligate — it is reportedly working to cut costs — but Apple makes its money from selling iPhones, not from Lumon Industries.
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10 Comments
It's always the same story with these companies that are in the business of selling their data about what's seemingly unknowable. When asked about methodology and sources, it's always "proprietary," a black box secret as to how they managed to arrive at the numbers they did--probably because people would laugh out loud if they provided the real answer. But suffice to say that "I can't tell you how I did this" would never be accepted as serious research.
As William correctly points out in this article, there are WAY too many variables to assign specific subscription revenue to particular shows.
Apple spent $10b on Car. The numbers indicate that TV+ is performing even worse.
$20B already spent and no profit. TV+ has been live for 6 years to gain 0.3% of the audience.
It isn't even exclusive to Apple hardware with support for Android phones and TV.
I could see it serve AVP but now... I would suggest for Apple to sell it and make a deal with a streaming service instead.
I bet their methodology isn’t especially sophisticated and involves strong assumptions.
I wonder if maybe what they are really doing is estimating the value of the show if it were to receive advertising revenue. That would be incredibly misleading on their part, but I bet that would be way easier to do.