Apple’s subscription business is already big, but it’s about to get even bigger.
Apple has sold more than 300 million subscriptions to its own and others’ apps, an increase of more than 60 percent in the past year alone, Apple CEO Tim Cook said during the company’s latest earnings call on July 31. Nearly 30,000 apps sell subscriptions through Apple’s app store, Cook said. Those apps include Apple’s own like Apple Music as well as publishers’ digital magazines, mobile games and video apps.
Apple didn’t say how much money it has made from these subscriptions, but Cook said that it accounts for a significant and increasing percentage of its overall services business, Cook said. Apple’s services business — which also includes money it makes from one-time app store sales, its Apple Pay digital payment service and AppleCare customer support service — generated $9.5 billion in revenue for the quarter that ended June 30, a 31 percent increase year over year.
The 300 million subscriptions mark continues a trend this year of Apple adding 30 million subscriptions every three months or so. In February, the company said it had sold 240 million subscriptions, and in May, it updated the figure to 270 million subscriptions.
The number of subscriptions that Apple sells may balloon next year when it will reportedly roll out new subscription services. Bloomberg has reported that Apple plans to roll out a Netflix-style subscription service in the Apple News app following the company’s acquisition of digital magazine subscription service Texture earlier this year. And The Information has reported that Apple plans to roll out an all-in-one subscription service that would bundle video, music and news content, similar to Amazon’s Prime subscription service.
Apple isn’t the only tech company trying to get involved in media companies’ subscription business. In the past year, Facebook and Google have introduced programs to help publishers sell subscriptions to access their content, and Amazon sells subscriptions to TV networks’ over-the-top apps through its Amazon Channels program. But Apple already has some momentum when it comes to pushing people toward media companies’ content and paying for that content. The number of articles that people read in the free, ad-supported Apple News app more than doubled in the quarter compared to a year ago, Cook said. And the number of third-party video subscriptions that Apple has sold increased by “like 100 percent year over year,” he said.
Cook didn’t discuss any plans for new Apple subscription services during Tuesday’s earnings call, but he did tease the company’s streaming video plans. After hiring a pair of TV industry vets to oversee its original programming push, Apple has been on a spending spree in acquiring original shows starring big-name talent like Reese Witherspoon and Jennifer Aniston to compete with the likes of Netflix, Amazon, Hulu and traditional TV networks. Apple has been quiet about how people will be able to access its original shows, but a paid subscription service is a likely move. All that Cook would say about its original programming plans is that the company has “been working on a project that we’re not really ready to share all of the details of yet. But I couldn’t be more excited about what’s going on there.”
Cook similarly kept mum about Apple’s advertising business, which includes ads within its app store’s search results and in Apple News. The company did not specify in its earnings report how much money it makes from ads, a minor part of the business. And the only mention of that business during the earnings call was a line from Cook saying that Apple’s app-store search ad business has seen “rapid growth,” though he didn’t specify whether that growth was related to revenue or something else.
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