Apple has lost more than $1 billion a year on its TV streaming service and is beginning to scrutinise its costs in more detail. Entering Tech Titan’s ambitious streaming wars, Apple TV+ is bleeding cash at an astounding rate of over $1 billion a year despite boasting a subscriber base of around 45 million in 2024.
According to an exclusive report from the information, Apple TV+ exceeds $1 billion each year. Despite gaining traction with hit shows like Ted Lasso and Severance, the service remains unprofitable.
“Apple loses more than $1 billion a year to its TV streaming service and is beginning to scrutinise costs more closely,” the information reports.
The report comes two years after Apple increased subscription prices for Apple TV+ and Apple News+. Apple TV+ has increased from $6.99 a month to $9.99, while Apple News+ has increased from $9.99 a month to $12.99 a month.
Apple’s TV streaming service bleeds over $1 billion a year despite subscriber growth
Since its launch in 2019, Apple has dropped approximately $500 million in spending last year, but has put more than $5 billion a year into the original programming. The platform had around 45 million subscribers in 2024, and even with a monthly fee of $6.99 and a collection of award-winning titles, the costs are far outweighing revenue. For comparison, Netflix racks up more viewing in a day than Apple TV+ does in a month, showing fierce competition in streaming.
However, Apple is not panicking. The overall financial strength allows you to absorb these losses while building your services.
Big bet on prestige content
From the start, Apple TV+ has established itself as a premium player and banks banking to high-budget originals, distinguishing itself from Netflix, Disney+ and Amazon Prime Video. This approach has led to critical acclaim. Koda became the first streaming film to win an Oscar in 2022, but not in financial gain.
Initially, Apple invested more than $5 billion in programming per year, helping top tier directors and actor productions. In 2024, those numbers have immersed slightly as the company adjusts its approach, with CEO Tim Cook reportedly looking closely at costs. While Netflix thrives with its large content library, Apple TV+ sticks to curated strategies and focuses on less but higher quality productions.
However, Prestige has not been translated into profitability. Despite its 45 million subscribers, Apple TV+ is behind Netflix’s 283 million and Prime Video’s 200 million. At $6.99 per month (after it was raised to $9.99 in 2023), the service has not found a way to bridge the financial gap.
Hollywood expenditure, technology size loss
Apple didn’t spend any money on its quest to mark it in entertainment. According to Bloomberg, since 2019, it has spent more than $20 billion on content. Major investments include $500 million in films from directors such as Martin Scorsese (Killers of the Flower Moon) and Ridley Scott (Napoleon). Television projects are not that cheap. Season 2 reportedly costs $20 million per episode, a budget comparable to HBO’s most expensive productions.
However, the economic benefits are overwhelming. According to information, Apple TV+ accounted for just 0.3% of US screen time in June 2024. Expensive bets like Argylle, a $200 million film at the box office, forced Apple to rethink its film strategy. Instead of chasing theatre hits, the company has shifted its focus to exclusive streaming. Despite recent subscriber growth, Antenna data shows the spikes of two million dive groups a month after Severance’s talk.
A small player in a giant machine
Apple’s financial muscles make TV+ losses appear minor with grand plans. In the final reporting quarter, the company attracted $124 billion in revenue and $36 billion in profits. The services sector, including Apple TV+, Apple Music and Icloud, remains the fastest-growing segment, generating $96 billion in 2024 with a margin of over 75%. Unlike hardware with margins below 40%, services drive Apple’s profitability. However, while iCloud and App Store revenues flourish, Apple TV+ remains an outlier.
Apple’s service director Eddy Cue initially protected TV+ executives from budget scrutiny. That changed in 2022 when Tim Cook began calling for accountability. A report from Macrumors suggests that Cook is personally considering costs, including the star’s private jet costs and the expanded production budget. result? It’s a more lear-like operation, but it still doesn’t even break.
Can Apple change courses?
Apple has not retreated yet. Recent movements provide tips for shifts. Bring Maria Innes Rodriguez from Disney and Full, licensing movies to third parties, significantly reducing budgets for low-performance projects, and reducing show renewals from just two seasons by 2021, from an average of 3.67 seasons in 2019.
However, strategies remain unchanged, expanding quality over quantity. Unlike its market-filled approach with Netflix content, Apple TV+ continues to focus on a carefully curated lineup. The model has been awarded, but has not received enough subscribers to make a financial impact.
Streaming is a brutal business and is expected to lose a lot. They operate at loss for years before making profits. Apple has a financial cushion to play long games, but serious questions remain. Is Apple TV+ a real attempt to compete with the streaming giant, or is it just a famous vanity project? Now, the balance sheet suggests it is an expensive experiment. This highlights how difficult it can be for companies with Apple’s resources to break into the entertainment industry.
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