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Apple TV+ is losing $1B annually, but its other services are struggling too

Apple TV+ is losing $1B annually, but its other services are struggling too

  • 20.03.2025 15:31
  • bgr.com
  • Keywords: Apple, Apple Music

Apple TV+ loses $1B annually despite 45 million subscribers, while other services like Music, News+, Fitness+, and Arcade underperform. The company is cutting costs by licensing shows and reducing original spending, but profitability remains elusive across its media offerings.

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Losing $1B annually from Apple TV+ and struggling with other services like Apple Music, Apple News+, Apple Fitness+, and Apple Arcade. Their strategy in Hollywood is being refined to reduce costs and reliance on original content.

Context

Analysis of Apple TV+ and Market Implications

  • Apple TV+ Annual Loss: Apple TV+ is losing approximately $1 billion annually, despite having around 45 million subscribers.
  • Strategic Refinement: Apple has been refining its strategy in Hollywood, focusing on reducing upfront costs for shows and canceling underperforming ones. Third-party studios are now bearing more financial responsibility for over-budget productions.
  • High-Cost Shows: High-budget shows like Severance and another unnamed series have not delivered the expected audience growth, contributing to financial losses.
  • Movie Deal Issues: The $200 million production cost of Argylle failed to improve Apple TV+’s audience metrics.
  • Apple Music Performance: While growing in revenue, Apple Music is only “marginally profitable”, and Eddy Cue doubts it will reach 100 million paying subscribers.
  • iTunes Store Decline: iTunes Store sales continue to decline, further impacting Apple’s overall service profitability.
  • Other Services Struggles: Apple News+, Apple Fitness+, and Apple Arcade collectively had only 2 million users in their first year of operation, with a quarter on free trials. These services would not be profitable without subsidies.
  • Competitive Dynamics: Apple is shifting from relying solely on original content to licensing programming from competitors, reducing its reliance on expensive original series.
  • Long-Term Challenges: Despite growing service revenues, Apple faces significant challenges in making its offerings profitable across its ecosystem. The future of services like Apple TV+ and others remains uncertain without further strategic changes or cost reductions.

Conclusion: Apple’s streaming efforts, particularly Apple TV+, are struggling to achieve profitability despite high-profile content and a large subscriber base. The company’s broader service portfolio also faces challenges, highlighting the need for long-term strategic adjustments to improve financial performance.