sortiwa
In a nutshell: Despite hit shows like Severance, Apple is reportedly still hemorrhaging over $1 billion per year on its Apple TV+ video platform. The company is estimated to shell out around $4.5 billion annually on content for the service.
The figures come from The Information, which cites anonymous sources. Apple TV+ follows an original-only model, and with an estimated 45 million subscribers on board – a relatively modest figure compared to Netflix’s 300 million – those clearly are some pricey shows and movies Apple is bankrolling.
Before you start feeling too bad for Apple, keep in mind this is basically loose change for a company that pulled in $391 billion in revenue last fiscal year, with net profits of $93.7 billion.
Moreover, while the company doesn’t reveal Apple TV+ metrics specifically, the service is bundled under its services segment, which encompasses offerings like Apple Music and the App Store. That division generated $26.3 billion in revenue in Q4 2024, up 14% year-over-year.
Still, the numbers highlight the expensive reality of trying to compete in the streaming wars against the likes of Netflix, Disney+, and Prime Video. The advantage that Apple has here is that it can actually absorb those kinds of costs – most media companies can’t sustain that level of losses indefinitely.
The good news for Apple is that its platform seems to be paying off in other ways. For instance, Apple TV+ scored a Best Picture Oscar win back in 2022 for CODA, a coming-of-age comedy-drama film. Since then, CEO Tim Cook has apparently taken a keener interest in the platform’s spending and strategic importance.
Apple has also succeeded in attracting top talent, with award-winning hits like Ted Lasso, The Morning Show, Severance, and Bad Sisters. The service has gotten into live sports as well, becoming the exclusive home of Friday Night Baseball – a weekly MLB double-header streaming package available in the US and other countries.
That said, Apple TV+ was never really about boasting the highest subscriber count. Rather, it’s about strengthening customer loyalty to Apple’s product ecosystem, as the report points out.
What remains unclear is exactly how many of those 45 million claimed subscribers are actually paying the $9.99 monthly fee in full. That’s because Apple constantly offers extended free trial periods by bundling the service with new device purchases.
Carriers like T-Mobile have been including Apple TV+ as a perk on certain unlimited plans, too. Additionally, bundle deals like Comcast’s $15 per month package with Peacock and Netflix show how Apple is willing to get creative on pricing.
All this means that Apple’s average monthly revenue per user from the service could even be much lower than that $9.99 sticker price.
Source link