Adapted by:
John Tones
WriterI've been writing about culture for twenty-something years and, at Xataka, I cover everything related to movies, video games, TV shows, comics, and pop culture.
Jody Serrano
Editor in chiefEditor in Chief at Xataka On. Before joining Webedia, I was a tech reporter at Gizmodo and The Messenger. While I've covered all sorts of things related to technology, I'm specialized in writing about social media, Internet culture, Twitch, and streamers.
Despite Apple’s excellent financial health, it’s been incapable of turning Apple TV+ into a profitable area of business.
When Apple started implementing cost-cutting measures in its content productions a few months ago, it became clear that the company would have to abandon its goal of becoming a major player that could face off against Disney or Warner Bros. In addition, it was also apparent that the hole Apple TV+ created in the company’s finances was excessive.
But as it turns out, it was worse than even the most pessimistic projections: Apple TV+ loses a billion dollars per year.
It’s not another Netflix. In an interview with Variety on Thursday commemorating his 25th year at the helm of Netflix, Ted Sarandos said the following when asked about Apple’s role in the streaming market: “I don’t understand it beyond a marketing play, but they’re really smart people. Maybe they see something we don’t.”
While Sarandos’ comments might be a harsh take, it’s clear who the leader is in this race. Last July, Bloomberg reported that Apple TV+ had to make cuts immediately because it had less viewing in a month than Netflix had in a day. As such, the chasm between the two competitors is undeniable.
A billion dollars per year. A report from The Information analyzed the financial health of the platform after five years. The report states that Apple TV+ loses about $1 billion per year. As noted by 9to5Mac, although it was never a secret that the streaming service wasn’t profitable, the report from The Information was the first to put concrete numbers on its losses.
Big investment, little revenue. These astronomical figures can be attributed to the high cost of Apple movies in recent years. Movies like Napolean from Ridley Scott and Killers of the Flower Moon from Martin Scorsese were the first and cost a fortune. However, the real financial bomb was Argylle, which cost $200 million to make and only brought in $35 million. After that, Apple worried that even a surefire hit like Wolfs, starring Brad Pitt and George Clooney, could result in disaster, so it premiered the film directly on the streaming platform. In the end, Apple took a loss that could have been even worse if it premiered it theaters.
The Severance bump. Interestingly, when it comes to reputation, Apple TV+ is having its biggest moment ever. With its second season, Severance has gone from being a cult product to one of the most acclaimed shows of the year. Some say that in the last month, Severance could have added two million users to Apple TV+, which we would add to the 45 million that The Information claimed it had at the end of 2024. Meanwhile, there’s another potential hit on the horizon: the return of Ted Lasso.
All’s good at Apple. While these numbers might spell disaster for Apple’s streaming ambitions, they by no means indicate that the company is doing poorly. Last quarter, Apple closed the year with $124 billion in revenue, of which $36 billion can be considered profit. Besides some obstacles, such as the fall of sales in China, Apple’s business works for Apple. In fact, even when it comes to subscriptions—the area of business where Apple TV+ lives, but also the home of Apple Music, the App Store, iCloud, and Apple Care—the company performed well, growing 14% year-over-year.
In other words, it’s bad news for Apple TV+, but the service’s red ink is by no means making the tech giant stumble.
Image | Apple
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