Apple TV+ is having a big cultural moment thanks to the popularity of Severance’s second season, which concludes tonight. But leaving its current success aside, a new report claims that the streamer has continued being a money drain for Apple even five years after launch.
Apple TV+ is not yet profitable, even as subscriber numbers grow
Wayne Ma writes today at The Information about the state of Apple TV+ as a business, analyzing where the streamer stands in terms of revenue and subscribers after five years.
In the heavily-paywalled article, Ma reports that Apple’s losses on TV+ amount to over $1 billion per year. While it’s long been known that the streamer was not yet profitable, this is the first time I can recall that we’ve had a solid number to quantify the losses.
The report also claims Apple TV+ had 45 million subscribers last year.
It’s unclear, though, how many Apple has added during the current Severance hot streak. For example, a recent Antenna report said the streamer added two million new subscribers in a single month, which was a sizable boost.
Apple’s losses aren’t the bad news they seem to be
We’ve seen reports in the past of Apple working to rein in spending, especially with its film division. Apple’s original movies have achieved some success, including CODA being the first from a streaming service to win the Best Picture Oscar. But several theatrical disappointments reportedly led to the company cutting budgets and prioritizing direct-to-streaming.
On the TV side though, while there may be some budget cuts happening, generally Apple has seemed content stomaching its losses from TV+ as it builds up the service.
It’s entirely normal for streaming services to experience losses for a while before achieving profitability, and Apple happens to be in a great position to ride that train longer than most.
While $1 billion is no doubt a big number, it’s a relatively small loss in light of Apple’s overall very profitable business.
For example, last quarter alone Apple reported $124 billion in revenue, with $36 billion of that being profit.
So yes, losing $1 billion per year matters, but it’s not in any way the problem it may appear to be initially.
Do you think Apple losing $1 billion annually on TV+ is a problem? Why or why not? Let us know in the comments.
Apple TV+ is available for $9.99 per month and features hit TV shows and movies like Ted Lasso, Severance, The Morning Show, Silo, and Shrinking. You can also watch free in several ways.
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