Apple’s Streaming Division Faces Billion-Dollar Losses Annually
The tech giant Apple is reportedly incurring losses exceeding $1 billion per year from its streaming service, Apple TV+, according to a report by The Information, citing sources familiar with the financial details.
Significant Content Investment
Since its launch in 2019, Apple has invested heavily in content for Apple TV+, with annual expenditures surpassing $5 billion. However, the report indicates that content spending was reduced by approximately $500 million in the past year.
Struggling to Gain Subscriber Traction Against Streaming Giants
Despite a portfolio of critically acclaimed original programming such as “Ted Lasso,” “The Morning Show,” “Shrinking,” and “Severance,” Apple TV+ has struggled to compete with established streaming platforms like Netflix, Disney+, and Amazon Prime Video in terms of subscriber numbers.
Leading the streaming market, Netflix boasts a subscriber base of 301.63 million. Disney+ follows with 124.6 million subscribers, and Warner Bros. Discovery reports 116.9 million users.
Analyst Subscriber Estimates
While Apple, the iPhone maker, does not publicly disclose subscriber figures for Apple TV+, analyst estimates suggest the service reached 40.4 million subscribers by the close of 2024, according to a consensus of five analysts surveyed by Visible Alpha.
Industry Recognition for Apple TV+ Programming
Despite subscriber challenges, Apple CEO Tim Cook highlighted in a January earnings call that Apple TV+ productions have garnered significant industry recognition, earning over 2,500 award nominations and securing 538 wins.
Bundling Strategies and Pricing
In an increasingly competitive streaming landscape, media companies are adopting bundling strategies, offering discounted rates to attract price-sensitive customers.
Apple TV+ is included in a bundle offered by Comcast, combining the service with Peacock and Netflix for a monthly price of $15.
Individually, an Apple TV+ subscription costs $9.99 per month in the United States.
Furthermore, Apple, headquartered in Cupertino, California, incorporates Apple TV+ into the Apple One program, which bundles it with other services such as iCloud and Apple Music.