Apple Music Could 'Open The Door' To TV Service

Apple Inc. (NASDAQ: AAPL) has finally launched its long-awaited streaming music service. Could a TV service be next?

"We view Apple as a major share gainer in the streaming music arena given the company's golden brand and unrivaled installed base of customers," FBR Capital Markets analyst Daniel Ives told Benzinga. "It's going to be a battle, but we believe over time Apple will be successful in streaming music and open the door to broader streaming services (e.g. TV services)."

Early impressions are rolling in and the consensus seems to be that Apple developed a robust music service that is somewhat confusing.

This is not the first time Apple has been criticized for confusing music lovers. The company is often praised for simplifying the way consumers legally obtain new music, but Apple enthusiasts complained last year after iTunes 12 arrived.

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iTunes Or iProblems?

Some said iTunes 12 was less intuitive, others referred to it as the worst software Apple has ever released. At least one critic hated the new software.

Apple Music has yet to receive an equal number of complaints. Aside from being confusing, critics seem to generally like the service. That's good news for the Mac maker, especially for a firm that has chosen to promote Apple Music with a subtle promo campaign.

That is a notable difference from the way it promoted the Apple Watch, which was backed by a $38 million ad campaign that started in early March.

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'Modest Revenue Stream'

Apple's actions shouldn't surprise anyone: while the Apple Watch could open up a massive revenue opportunity, Apple Music may not be a huge source of profit.

"It's a modest revenue stream," Apple expert Sean Udall told Benzinga. "On stuff like this I don't overly focus on it, as it's not central to the price/value of Apple's market cap. To me, core software tech innovation, product designs, cash flow production and real actual sales numbers are the keys."

Udall also said that he thinks Apple will grab the "biggest share" of the paid streaming market over time. Even then he dose not believe it will provide the level of revenue that could come with selling millions of watches.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.