Apple loses more than $1 billion a year on Apple TV+ streaming service

[zohaibahd]

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 original 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.

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Apple loses more than $1 billion a year on Apple TV+ streaming service

 

[The Talking Tech]

No company wants to lose money no matter how rich they are, especially Apple as they are not used to see failed products in full display.

 

[ScottSoapbox]

Apple TV+ cannot be looked at by itself. It helps Apple sell service bundles and to a lesser extent Apple TV hardware.

The real driver though is growth. Apple has to keep getting bigger and it makes so much money that most industries are a rounding error for them. This is the reason an Apple car keeps getting floated as it is one of the few industries that could actually spend it's excess cash pile. (But cars are hard and so its threat to the brand keeps it from happening). So Apple TV+ doesn't help profits but it does help revenue growth.

 

[FaTaL]

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.

Irrelevant. NO company likes losing money. Period.

 

[Axeia]

So, Apple TV+ is losing money.
Disney+ finally managed to make a small profit after adding ads.
Amazon Prime Video afaik is still losing money.

It was simpler days when it was just Netflix, cheaper too.

At least Apple TV+ is pretty good in the quality of its contents, which I cannot say about Disney/Amazon.

 

[Billybobjoey]

Tim Cook and Ben Stiller just announced Season 3 of Severance was greenlit this morning, so they don't seem to be giving up on original content anytime soon at least. I do wonder what they'll have to do for the division to actually turn a profit, if it ever does.

 

[kiwigraeme]

As others alluded to Apple is ultimately a subscription , click every ticket company

If solely hardware then the stock is much more risky - as sales could start dropping , as cheaper alternatives, people see no reason to update etc , hard times

See Tesler shares with Enron Musk - surely price can not be based solely on car sales , but promises of robotaxis , ai robots etc ( again more risky ground as Enron is known to talk siphon stuff to elsewhere we has a higher share ownership , maybe his family hurriedly dumping shares, are buying into a cherrypicked portfolio ? )

Apple also need to build up a large library , to sustain new subscribers

 

[Axeia]

As others alluded to Apple is ultimately a subscription , click every ticket company

If solely hardware then the stock is much more risky - as sales could start dropping , as cheaper alternatives, people see no reason to update etc , hard times

See Tesler shares with Enron Musk - surely price can not be based solely on car sales , but promises of robotaxis , ai robots etc ( again more risky ground as Enron is known to talk siphon stuff to elsewhere we has a higher share ownership , maybe his family hurriedly dumping shares, are buying into a cherrypicked portfolio ? )

Apple also need to build up a large library , to sustain new subscribers

It's two fold.
Subscription money is a nice steady income where if there is a lot of subscribers even a small price increase of it can affect the bottom line. Adjusting it for inflation (only ever upwards makes investors happy).
The other benefit is locking people further into some eco system so they do keep buying that hardware.

 

[daffy duck]

Irrelevant. NO company likes losing money. Period.

Unless it serves the purpose of destroying competition, then it is common practice. Many companies will suffers losses to undercut a competitor to put them of of business, then once the monopoly is set, they can skyrocket prices. They also will do so to suck people in tho joining up to a service at a too good to be true price, then once they are hooked you drip feed in constant price rises.