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Apple TV: What the numbers are telling us, and where we think the platform will go

by Pete Schlaefer on Apr 29, 2016

At AppLovin, we’re making all sorts of investments in supporting tvOS ranging from getting out the SDK right on the heels of the platform’s release to hosting the Apple TV App Challenge, a contest that rewarded cutting-edge tvOS developers.

Given that we have a few months’ worth of data now on Apple TV, the time is right to share what we’re seeing in terms of that data, and a bit on the bigger picture that fuels our conviction that both developers and advertisers should be getting on the Apple TV bandwagon, now.

What the data is telling us

Obviously it’s early days, and the market isn’t nearly as big as for iPhone or Android, but there’s already reason for enthusiasm.

First of all, Apple TV offers publishers extremely advantageous CPMs at the moment. We’re seeing CPMs of about $25 on average with early beta advertisers, which is comparable with Hulu’s of about $25-$30. Given that the CPM on iPad is $10-$12 on average in the U.S., this is a big deal. It also follows what we’ve seen generally for years — the bigger the screen, the bigger the CPMs. (This true across all devices, not just those produced by Apple.)

Then there’s the rate at which the market is expanding. Things really took off over the holidays for Apple TV, and analysts are predicting sales of around ~25 million units of the new Apple TV in 2016, which would make the addressable market $1-2 million a day. We’re seeing that progress at AppLovin, with each month doubling the previous month in terms of impressions totals.

As for other bits of data that are useful: the biggest markets are in the U.S., Canada, Germany, Sweden, and the UK. (Sweden and Germany are wealthy populations that are bilingual and want English content on their TVs). And there is the weekend jump: Early data show impressions on Apple TV go up an average of ~100 percent on the weekends, compared with iOS, which typically sees a 20 to 30 percent weekend jump.

Where we think it’s going and why

While it’s true that Apple TV will likely continue to be dominated by content (Netflix, Hulu, etc. because of the TV content legacy, fitness apps like Yoga Studio and Daily Burn are making their way into the top-paid and top-grossing lists. As of this writing, however, top-paid is dominated by games. This goes to show that developers are already creating gaming apps to lock up that market early. Also, given that Apple is always aggressive about improving its software and hardware with every release, you can bet that they will do so to make gaming more and more attractive on the Apple TV. (And don’t forget that already you can play games with either the Siri remote or with a connected, more traditional console, illustrating how the two worlds are converging.) Also, while I don’t know how utility apps are going to look on Apple TV (keeping in mind that many of the ones that we use on our phones, like those for transportation, won’t be relevant on our TVs and that as of now, just a handful of them are top in the charts), my bet is that commerce apps will take off on Apple TV. No doubt that if you have cash to spend, shopping for home goods, clothes or vacations on a TV screen will be more appealing than doing so on your phone.

Old versions of Apple TV sold around 25 million units (which seems paltry compared to 700 million units of the iPhone), but don’t forget that with the original version of the Apple TV, there was no App Store. It was like cake without icing: there wasn’t the dual draw of the device AND the apps. But meanwhile there have been all of those iOS developers–in fact an incredible concentration of independent developers–who have effectively been sidelined when it comes to TV. No longer. This alone is a great reason to bet on Apple TV, because really you’re betting on the developers, and they’ve already proven they’re winners. We can rest assured that they’re going to great immersive, sticky apps which will generate consistent and long-term revenues.

Finally, Apple TV gives advertisers access to real-time attribution with TV campaigns — a true game changer.  Advertisers can now experiment in ways that they’ve never been able to on traditional TV. They can do A/B testing. They can push the boundaries in native, which we already know is incredibly successful, and likely even develop whole new ad formats. Since Apple TV has an IDFA, reaching the right person with the right message at just the right time through TV is finally possible. And the prospect of doing better targeting at scale on Apple TV and then iterating with the data generated is pretty exciting.

So what does this all mean? It means that no matter if you’re an advertiser or a publisher, you should get in on Apple TV now. We already know that getting in early with an Apple platform bodes well for acquiring and keeping users (including the insanely valuable, deep-pocketed evangelizing early adopters), not to mention the Holy Grail of good App Store rankings. History has also taught us that when Apple makes a play in a way that developers can jump in on, it goes well. With iOS, Apple got into our pockets, in more ways than one; this is Apple’s play for getting into our living rooms, and it’s worth joining them in the experiment.

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Pete Schlaefer is AppLovin’s Vice President of Growth Partnerships.

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