{"id":47212,"date":"2025-03-26T15:50:01","date_gmt":"2025-03-26T19:50:01","guid":{"rendered":"https:\/\/mjtsai.com\/blog\/?p=47212"},"modified":"2025-04-01T16:28:02","modified_gmt":"2025-04-01T20:28:02","slug":"apple-tv-losing-1-billion-per-year","status":"publish","type":"post","link":"https:\/\/mjtsai.com\/blog\/2025\/03\/26\/apple-tv-losing-1-billion-per-year\/","title":{"rendered":"Apple TV+ Losing $1 Billion Per Year"},"content":{"rendered":"

Ryan Christoffel<\/a>:<\/p>\n

Wayne Ma writes today at The Information<\/em><\/a> about the state of Apple TV+ as a business, analyzing where the streamer stands in terms of revenue and subscribers after five years.<\/p>

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.<\/p>

The report also claims Apple TV+ had 45 million subscribers last year.<\/p><\/blockquote>\n\n

Kontra<\/a>:<\/p>\n

\n

Co-CEO of Netflix and Spotify board member Ted Sarandos on Apple TV+:<\/p>\n

“I don’t understand it beyond a marketing play, but they’re really smart people. Maybe they see something we don’t.”<\/p>\n<\/blockquote>\n\n

John Gruber<\/a> (Mastodon<\/a>):<\/p>\n

\n

But is it a loss<\/em> when Apple expected the business to be unprofitable for a decade or more?<\/p>\n

[…]<\/p>\n

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.<\/p>\n<\/blockquote>\n\n

John Gruber<\/a>:<\/p>\n

\n

One interesting nugget is this chart<\/a>, which suggests that subscriptions to TV+ have boomed since Apple and Amazon worked out a deal to sell TV+ subscriptions<\/a> 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.”<\/p>\n<\/blockquote>\n\n

M.G. Siegler<\/a>:<\/p>\n

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.<\/p>

[…]<\/p>

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.<\/p>

[…]<\/p>

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+.<\/p>

[…]<\/p>

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<\/em> not going down over time – actually indicated that they’re strategy was broken.<\/p><\/blockquote>\n\n

Previously:<\/p>\n