Apple’s long-rumored streaming service might go a long way in boosting the company’s stock price, according to one analyst.
In a note to investors on Thursday, Wedbush analyst Dan Ives said that he believes Apple’s upcoming television streaming service could generate between $7 billion and $10 billion a year once it’s up and running. That revenue growth, coupled with what he called a “halo effect” that could keep people using Apple’s devices and other services, should create more shareholder value, Ives said. He’s upped his 12-month price target on Apple’s stock price (AAPL) from $200 to $215 to reflect that. Apple’s shares closed the day on Wednesday at $188.16.
Apple is holding a press event on Monday where it’s expected to unveil its long-awaited streaming service. Apple has committed an estimated $1 billion to acquire original content from a variety of Hollywood actors, producers, and actors, including Oprah Winfrey, Steven Spielberg, and Reese Witherspoon. That original content they produce will act as the foundation for a service that will also likely include access to third-party content from HBO, Showtime, and Lionsgate, among other content creators.
Apple has been a little late to the streaming game. Netflix, Hulu, and Amazon have all been competing in the space for the last few years. But according to reports, Apple’s tack will be a bit different than those taken by the competition. Instead of buying up content both good and bad to build a vast content library, Apple is instead focusing on higher-quality content and original programming. Apple reportedly envisions a service that might ultimately have less content than competing platforms, but will deliver better-quality content.
Ives based his revenue figure on his belief that Apple could attract 100 million subscribers to its streaming service within the next three to five years. However, he said Apple will only be able to get there if it “aggressively acquires content.”