The headline read Apple is raising prices of Apple TV+ from $9.99 to $12.99 in the U.S., U.K., and Canada. That is a sizable 30% increase and begs the question, what does that do to numbers?

The answer is the impact gets small in a hurry. I estimate there are 60m total paid Apple TV+ subscribers. Here is my breakdown of what each group pays per month:

• 50% of the subs come from Apple One. I estimate 30m, or half of the 60m paid TV subs (Deepwater estimate), get the service through Apple One. As a point of reference, Netflix has about 305m paid subscribers. If you assume a third of the value in the Apple One bundle comes from Apple TV+, and there are on average 4.5 users per subscription (you can have up to six), that implies on average each sub is paying $2.22 per month.
• 35% of the subs are full paying. I estimate about 20m subs are full paying and now pay $12.99 a month.
• 15% of the subs get a discount. I estimate 10m subs come from outside Apple One and outside of the full-paying group. I believe on average they pay $6 a month.

Putting it together, the average user pays about $6.50 a month.

I estimate 60% of the 20m full-paying subs fall into the U.S., U.K., and Canada, which means about 12m subs will see the 30% increase. That translates to an incremental $432m in annual revenue, which increases overall revenue for the company in CY26 by 0.1%. That 0.1% increase maps to about the same increase in average revenue per device per day, inching it up from $0.47 to $0.4704.

So, does Apple TV+ make money? The simple answer is we do not know. That said, given the level of content investing, they most likely are losing money today. I estimate the price increase will cut annual losses from $1.5B to closer to $1.0B. I believe the company will spend just under $6B a year on content this year, and those 60m subs (attributing 30% of Apple One revenue to Apple TV+) generate $4.7B annually after the price increase.

Since the service launched in 2019, I estimate Apple has invested around $20B into originals and generated about $13B in total revenue, making it an expensive endeavor that has not been profitable. What the company has to show for the effort is impressive: a roster of award-winning titles like Ted Lasso, Severance, and big-budget films such as F1 The Movie, and Killers of the Flower Moon. In total, they have won at least 72 Emmy Awards, which is impressive given they have been at it for about six years. It is safe to say Apple has been successful at bringing its quality standard in hardware, software, and services to content. It is also worth noting the company is proud of these accomplishments, as evidenced by Tim often mentioning those awards on quarterly earnings calls.

Media reports suggest Apple is also making changes to reduce losses by lowering content costs. I believe Apple’s intent is to gradually close the gap between Apple TV+ expenses and revenue, turning what has been a negative-margin venture into a profitable one over time. My guess is profitability is still a few years away.

I have seen the Apple investment case go through two chapters over the past 20 years. The first was the move to a mobile device company. The second chapter was higher margins through services. The third could be inching up average revenue per user. Today, the average revenue per device per day is $0.47, a metric that Horace Dediu from Asymco has been increasingly highlighting. I agree with the concept of this approach, that Apple users get a lot of value from their devices today, and that opens an opportunity for the company to add new services, increase the price on existing services, and increase the price on hardware.

Over the next five years, I believe this will be Apple’s growth playbook, getting more aggressive on pricing because when consumers break it down, they are only paying pennies a day to have their lives run on Apple. If you are curious, Horace estimates the iPhone costs about $1 per day. The bottom line is I’m going to be watching this metric more closely and taking note when we see price changes, as is the case with Apple TV+.

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