Apple Gets Aggressive With Apple TV+ Pricing

The Mac maker’s forthcoming video streaming service is far cheaper than expected.

| More on:

It was becoming increasingly clear that $10 per month wasn’t going to cut it for Apple TV+, and Apple (NASDAQ: AAPL) has apparently come to that same realization. The Cupertino tech giant is entering a crowded market for over-the-top (OTT) video streaming services, and investors are already excited for Disney (NYSE: DIS) to launch Disney+. At $7 per month, that service’s value proposition looks incredibly strong, and a promotional offer that brought that price down to under $4 per month crashed Disney’s site last month.

Apple has decided to undercut Disney+’s base pricing, launching Apple TV+ in November at just $5 per month.

Giving TV+ away

It takes many years and many billions of dollars to build up an original content portfolio. Apple has already been at it for about four years, and its budget has reportedly swelled to $6 billion. Services chief Eddy Cue has already stated that Apple is going for quality over quantity, and the initial slate of shows that will be available at launch is fairly limited. Pricing the service at $10 per month would have been a hard sell, especially when compared side by side to Disney+, which is also set to launch in November. Disney+ will include decades worth of content.

Furthermore, Apple announced another surprise: Anyone who buys a new iPhone, iPad, Apple TV, iPod Touch, or Mac gets a free year of Apple TV+. That’s a lot of TV+ subscriptions that the company will be handing out — Apple sells tens of millions of devices per quarter — although only one promotional offer can be claimed and shared per household. It’s unclear for how long the promotion will run.

The pricing and launch promotion are incredibly aggressive. Apple really wants people to try out the new service and is effectively giving itself another year to prove that its content is good enough for subscribers to renew; the company will be continuously adding new shows and movies each month.

Marching toward 500 million

Apple TV+ was always going to be a core part of Apple’s growing portfolio of services, and the service represents one of its most significant cross-platform plays, since Apple TV+ will also be available on competing tech platforms such as Amazon Fire TV and Roku, as well as through third-party smart TVs made by prominent manufacturers like Samsung.

The Mac maker set a target earlier this year of hitting 500 million paid subscriptions at some point in 2020. At the end of the second quarter, it had already reached 420 million paid subscriptions and has consistently added 30 million per quarter over the past seven quarters. With Apple TV+ and Apple Arcade launching, both at an affordable $5 per month, the company should have no problem hitting that goal early next year.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of AMZN, Apple, and Walt Disney. The Motley Fool owns shares of and recommends AMZN, Apple, ROKU, and Walt Disney. The Motley Fool has the following options: long January 2021 $60 calls on Walt Disney, short October 2019 $125 calls on Walt Disney, short January 2020 $155 calls on Apple, and long January 2020 $150 calls on Apple. The Motley Fool has a disclosure policy.

More on Tech Stocks

telehealth stocks
Tech Stocks

Well Health Stock: Buy, Sell, or Hold In 2026

Down over 50% from all-time highs, Well Health stock offers significant upside potential to shareholders in December 2025.

Read more »

container trucks and cargo planes are part of global logistics system
Stocks for Beginners

TFSA: 3 Premier Canadian Stocks for Your $10,000 Contribution

Invest in your future with high quality Canadian stocks for your TFSA. Discover three stocks offering significant growth potential.

Read more »

Female raising hands enjoying vacation, standing on background of blue cloudless sky.
Tech Stocks

If You Were Waiting for Tech Stocks to Go on Sale, Now’s Your Chance

Tech stocks, like Constellation Software (TSX:CSU), might be terrific bargains amid volatility.

Read more »

visualization of a digital brain
Tech Stocks

The AI Stocks I’m Seriously Considering After the Tech Wreck

Shopify (TSX:SHOP) stock is a seriously impressive stock that just had a great Black Friday.

Read more »

Engineers walk through a facility.
Tech Stocks

TFSA Investors: How to Invest $7,000 in 2026?

TFSA investors should consider investing in diversified index funds and undervalued growth stocks to derive inflation-beating returns.

Read more »

gift is bigger than the other
Tech Stocks

1 Oversold TSX Tech Stock to Buy and Hold in December 2025

Down almost 55% from its 52-week high, CMG is a TSX tech stock that offers significant upside potential in December…

Read more »

Business success of growth metaverse finance and investment profit graph concept or development analysis progress chart on financial market achievement strategy background with increase hand diagram
Dividend Stocks

This Under-the-Radar Tech Stock Can Be Canada’s Next Unicorn

This under-the-radar Canadian power-tech supplier rides AI data centres and electrification, and could quietly compound into a unicorn.

Read more »

investor looks at volatility chart
Tech Stocks

This Soaring Canadian AI Stock Still Trades at a 33% Discount in December 2025

Down 14% from all-time highs, Celestica is an AI stock that trades at a discount to consensus price targets in…

Read more »