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Apple TV+ Reportedly Losing Over $1 Billion USD Per Year

Apple TV+ Reportedly Losing Over $1 Billion USD Per Year

  • 20.03.2025 18:00
  • hypebeast.com
  • Keywords: Apple, Streaming Service, Financial Losses, Content Spending, Subscribers, Revenue Growth, iPhone Sales, Net Profit, Original Content, Award-Winning Titles

Apple TV+ is losing over $1 billion annually despite having award-winning shows like Ted Lasso. With 45 million subscribers, Apple has cut content spending to $4.5 billion but still profits mainly from iPhone sales, earning $391 billion in revenue.

Apple ServicesAAPLsentiment_dissatisfiedAAPLsentiment_satisfied

Estimated market influence

Apple

Apple

Negativesentiment_dissatisfied
Analyst rating: Buy

Losing over $1 billion USD annually on Apple TV+; decreased content spending to $4.5 billion from $5 billion; has 45 million subscribers; Services division revenue up 14% YoY at $26.3 billion; relies heavily on iPhone sales for profits.

Apple

Apple

Positivesentiment_satisfied
Analyst rating: Buy

Services division, including Apple TV+, generated $26.3 billion in revenue with a 14% YoY increase; Apple's overall net profit was $93.71 million USD during the end of September 2024 quarter.

Context

Business Insights and Market Implications: Apple TV+

  • Annual Loss: Apple TV+ is reportedly losing over $1 billion USD annually, highlighting significant financial challenges despite its award-winning content library (e.g., Ted Lasso, Killers of the Flower Moon).

  • Content Spending: Apple has reduced its annual content spending to $4.5 billion USD, down from $5 billion USD, indicating a strategic shift in investment priorities.

  • Subscriber Base: The service currently boasts 45 million subscribers, which is relatively low compared to major competitors like Netflix (200+ million) and Disney+ (161 million).

  • Services Division Revenue: Apple's Services division, including Apple TV+, generated $26.3 billion USD in revenue during the year-end 2024 quarter, up 14% year-over-year, but this represents a smaller portion of Apple's overall revenue compared to hardware sales.

  • Apple’s Overall Performance: Despite the streaming loss, Apple remains highly profitable, with $391 billion USD in total revenue and a net profit of $93.71 million USD as of September 2024. The company continues to rely heavily on iPhone sales for its primary revenue.

  • Content Strategy: Apple TV+ focuses on original content (e.g., Severance, Coda) to differentiate itself in the competitive streaming landscape, but this strategy appears costly and less effective in driving subscriber growth.

  • Market Position: Apple’s streaming service lags behind key competitors like Netflix and Disney+, suggesting challenges in gaining market share despite its high-quality original programming.

  • Strategic Considerations: The company may need to reassess its content spending, subscriber acquisition strategies, or pricing model to improve profitability. However, given Apple's overall financial strength, it is unlikely to exit the streaming market soon.

  • Long-Term Effects: If Apple continues to incur significant losses on Apple TV+, it could impact investor sentiment and potentially limit future investments in other growth areas like services and content.

  • Regulatory Impact: No immediate regulatory challenges are mentioned, but the streaming industry may face scrutiny over anticompetitive practices or data privacy concerns in the future.