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Apple losing over $1 billion a year on streaming service, the Information reports

Apple losing over $1 billion a year on streaming service, the Information reports

  • 21.03.2025 12:53
  • eu.indystar.com
  • Keywords: Apple, Netflix, Disney+, Amazon.com

Apple is losing over $1 billion annually on its streaming service, Apple TV+. Despite spending $5 billion yearly on content since 2019, it has struggled to match competitors like Netflix and Disney+ in subscriber numbers.

Apple ReportsAAPLsentiment_dissatisfiedNFLXsentiment_satisfiedDISsentiment_satisfiedAMZNsentiment_satisfied

Estimated market influence

Apple

Apple

Negativesentiment_dissatisfied
Analyst rating: Buy

Losing over $1 billion annually on streaming service, spending heavily on content but not gaining enough subscribers to offset costs.

Netflix

Netflix

Positivesentiment_satisfied
Analyst rating: Buy

Leading in subscriber count with 301.63 million, outperforming Apple TV+ which is estimated at 40.4 million.

Disney+

Disney+

Positivesentiment_satisfied
Analyst rating: Buy

Strong performance with 124.6 million subscribers, second to Netflix in the streaming market.

Amazon.com

Amazon.com

Positivesentiment_satisfied
Analyst rating: Strong buy

Prime Video is a key part of their offerings and competes effectively in the streaming space.

Context

Analysis of Apple's Streaming Service Challenges

Overview

  • Streaming Loss: Apple is losing over $1 billion annually on its streaming service, Apple TV+.
  • Content Spending: The company spent over $5 billion yearly on content since 2019 but reduced spending by $500 million last year.

Subscriber Performance

  • Competitive Lag: Apple TV+ lags behind Netflix, Disney+, and Amazon Prime Video in terms of subscribers.
  • Subscriber Numbers:
    • Netflix: 301.63 million subscribers
    • Disney+: 124.6 million subscribers
    • Warner Bros Discovery: 116.9 million subscribers
    • Apple TV+ estimate: 40.4 million subscribers by end of 2024

Content Success and Recognition

  • Awards and Nominations: Apple TV+ productions have earned over 2,500 nominations and 538 wins, according to CEO Tim Cook.

Competitive Dynamics

  • Bundling Strategy: To compete with price-conscious consumers, media companies are bundling services at discounted rates.
    • Comcast offers a bundle including Apple TV+, Peacock, and Netflix for $15/month.
    • Apple bundles Apple TV+ with iCloud, Apple Music, and other services under the Apple One program.

Strategic Considerations

  • Cost Efficiency: Apple's reduced content spending suggests a focus on cost management while maintaining high-quality original content.
  • Market Positioning: Despite award-winning content, Apple TV+ struggles to match the subscriber base of major competitors like Netflix and Disney+.

Long-Term Implications

  • Investment vs. Impact: The $5 billion spent since 2019 highlights significant investment without a proportional return in subscribers or market share.
  • Regulatory Considerations: No immediate mention of regulatory impacts, but ongoing antitrust scrutiny could affect pricing and bundling strategies.

Conclusion

Apple's streaming service faces challenges in subscriber growth and financial sustainability despite its award-winning content. Competitive bundling strategies may help retain customers, but long-term success will depend on balancing cost management with market expansion.