Apple TV+ Losing $1 Billion Per Year
Wayne Ma writes today at The Information about the state of Apple TV+ as a business, analyzing where the streamer stands in terms of revenue and subscribers after five years.
In the heavily-paywalled article, Ma reports that Apple’s losses on TV+ amount to over $1 billion per year. While it’s long been known that the streamer was not yet profitable, this is the first time I can recall that we’ve had a solid number to quantify the losses.
The report also claims Apple TV+ had 45 million subscribers last year.
Co-CEO of Netflix and Spotify board member Ted Sarandos on Apple TV+:
“I don’t understand it beyond a marketing play, but they’re really smart people. Maybe they see something we don’t.”
But is it a loss when Apple expected the business to be unprofitable for a decade or more?
[…]
The insinuation here is that Apple’s pissing this money away and doesn’t know what they’re doing. Maybe they are! But if so it was exactly Eddy Cue and Tim Cook’s strategy to piss this money away. If Apple had expected TV+ to be profitable or break-even in 2024, then a $1 billion operating loss would be a story. But as it stands it’s just a cost.
One interesting nugget is this chart, which suggests that subscriptions to TV+ have boomed since Apple and Amazon worked out a deal to sell TV+ subscriptions through Amazon Channels in Prime Video at the end of last year. That deal has, seemingly, moved the needle. Another interesting nugget is that TV+ seems to suffer from a higher churn rate than other streaming services. Said Belloni’s Puck colleague Julia Alexander, “Fewer than 35 percent of all subscribers keep the service for longer than six months.”
I mean, my god could you imagine if Apple had bought Netflix? Who knows if they even would have been allowed to from a regulatory perspective, or if Netflix would have sold, but if it’s true that Cue argued against it simply because he viewed their business as being bolstered by borrowing (financing content spend through debt) that’s a huge strategic blunder. Yes, this was the common criticism of Netflix at the time, though – with the benefit of hindsight – it clearly misunderstood what would happen if and when Netflix reached escape velocity with regard to scale.
[…]
Why would the availability of an Apple TV+ show on a Samsung TV prompt a person to buy Apple hardware? Just halo effect stuff? The argument for making these shows widely available is to sell Apple TV+ subscriptions and spread the cost (and content) far beyond the Apple ecosystem base, not the other way around.
[…]
Apple thought that creating great Apple TV+ shows would lead people to buy Apple TV set top boxes. That didn’t happen. Instead, they just kept their Rokus and stayed happy with Netflix and Prime Video and Disney+ and didn’t think much about Apple TV+.
[…]
Apple just needs to make the content side of the equation actually work, strategically. I don’t care how much it costs, necessarily. It’s more that those costs – in particular those losses not going down over time – actually indicated that they’re strategy was broken.
Previously:
Update (2025-04-01): Benjamin Mayo:
It may be starting from a small base, but TV+ does have upward trajectory. Frankly, on most metrics aside from the bottom line, the Apple TV+ plan is working. Apple is making a lot of good shows that people like, and is garnering millions of subscribers with ever-increasing viewership (given the increasing frequency of appearances of Apple shows on the Nielsen streaming charts). Over time, I see Apple TV+ as a big asset of the Apple One bundle.
[…]
Alongside reducing churn, the ongoing brand prestige and self-aggrandising awards recognition is also an added bonus for the company. If it really has accrued 45 million subscribers to date with a catalog of just ~280 originals, it doesn’t seem too far-fetched that they could eventually break even on the effort.
The Studio is, thus far, engaging, surprising, funny, gorgeous, clever, and cinematically ambitious. It’s really quite a thing. I have no idea what’s coming in episodes 3–10, so maybe this piece will look a bit premature, if not foolish, in two months. But if the rest of season one is anything like the first two episodes, The Studio is a classic in the making.
The thought also occurs to me that this might be the don’t-over-think-it answer to just what the hell Apple is doing making original shows and movies in the first place. Perhaps Apple’s leadership simply believes, as I do, that cinema is the grandest and greatest form of art the world has ever seen — one that encompasses acting, writing, photography and/or illustration, and music — and but that great cinema is expensive and delicate and needs, from deep-pocketed studios and their deeper-pocketed corporate parents, more than patrons, but champions. And that in a media landscape where such champions of cinema-as-art and art-as-an-essential-public-good are fewer and fewer, it is Apple’s not just opportunity but obligation to step up to the plate.
It’s a pity that they don’t see it as their obligation to champion the art of software, e.g. by ensuring that individuals can build and distribute their creations without interference.
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I happily pay for my subscription to AppleTV+. It consistently has some of the best shows available anywhere.
> If Apple had expected TV+ to be profitable or break-even in 2024, then a $1 billion operating loss would be a story. But as it stands it’s just a cost. -- Gruber
This totally explains why Apple is trying to reduce the cost of Apple TV + by skipping Theatrical releases…
Why can't it just be that they expected to lose money but not that much?
@DJ "It consistently has some of the best shows available anywhere."
I guess it depends on people's interests. I haven't found a single show on Apple TV+ that I found really interesting when I tried the service.
I honestly don't believe American commentators can see how nauseatingly, plasticly, shallow and Apple Pie High Fructose Corn Syrupy *American* AppleTV is.
Everything on it is like a propaganda commercial for a very narrow band of middle class Americanism, it's like watching one of those stupid WWDC intro "comedy" videos where Tim Cook is a spy, rather than just being a financial backer of Donad Trump, like he is in real life. It's physically uncomfortable to watch.
Also, it's the buggiest streaming app on an AppeTV.
I thick Benedict Evans nailed it in his latest newsletter. Choice quote: Apple services are either essential for Apple to have (iCloud, Music, Maps), or try to solve problems for users in some uniquely Apple way (Fitness, the credit card).
Apple TV does none of this. It doesn’t solve any problem, it does nothing different and Apple adds nothing. All that Apple contributes is money
Apple TV+: where a billion dollars a year goes to feed Tim and Eddy’s delusions of being the next Spielberg and Geffen.
TV+ ia not available in my neck of the woods... Which you cannot establish without searching Apple's support site and uncovering a conspicuous list of countries where it's available. The TV app on both iOS and Windows have no hint what is happening, no visible (even disabled) store tab, nothing... Top notch UX and discoverability... /s
Someone want to explain to me how TV+ contributes to hardware sales in any meaningful way, if any way at all? Especially considering that you don’t even need Apple hardware to subscribe.
iTunes Store promoted iPod sales, App Store promoted iPhone sales, same as iCloud, though the latter was more a convenience service, but in general, all these provided a synergistic cycle that made the hardware more appealing to consumers.
I miss the days where Apple would focus on hardware.
@Ben I'm with you. I've pretty much stopped watching TV, or at least new western TV shows. They just don't interest me any longer. I still watch through old favorites, and occasionally explore older shows I haven't watched before. But new TV, especially dramas, just don't hook me. It's hard for me to put my finger on exactly why.
And this is divorced from any of the shitty aspects of modern streaming services. I don't subscribe to any of them and get my media through "other" means, so this is purely about the content of the shows.
@someone: To each his own, of course. There's such a variety of shows available there though, it's hard to believe there isn't *something* that would appeal. Here are some of my favorites, just off the top of my head:
Silo
Foundation
For All Mankind
Slow Horses
Severance
Ted Lasso
The Morning Show
Mythic Quest
Shrinking
Bad Monkey
Loot
Presumed Innocent
The Last Thing He Told Me
Monarch
Hijack
See
The movies may not rise to the level of "blockbuster", but I've still found them entertaining: Wolfs, Argyle, Ghosted, The Instigators The Gorge, Fly Me to the Moon were all good. Spirited and Coda are great, in my opinion.
YMMV
Hmm, makes sense. I've lost count of the number of times I've taken out a free trial (the latest attempt of which failed because of a bug in their system, which meant I bought a gift card but couldn't redeem the offer, incidentally) but I've never felt the need or desire to actually subscribe. Truth is, even the hits just aren't all that special. They're far too polished, far too conventional, IMO. Even the things I thought I'd like, like Slow Horses or Dark Matter, were very disappointing, and I'd already read the novel for Dark Matter. There's just no pathos, no vulgarity.
There again maybe I'm just not the best person to have an opinion on TV, even though Apple do provide the best AD in the business. I did not, for instance, think that "See" was a triumph of representation. Or anything, really. Truth be told, I've not found any TV as gripping to listen to in years as Black Mirror. And that, of course, is Netflix fare.
Whether or not there are good shows is irrelevant. (There are good shows I'm told by people I trust)
The point is that Apple aren't making any money, they aren't making anything special, and they aren't getting hardware sales.
Personally I'm all for rich companies blowing crazy money on pet projects though, so go Eddy!
I'll even download Neuromancer once it's out.
Would be nice if they would concentrate their efforts on making their App Stores and software better…for the devs and creatives who contribute to Apple in a more meaningful way than any tv show
…but devs don’t get Emmys they only get shitted on
