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Apple loses more than $1 billion a year on Apple TV+ streaming service

Apple loses more than $1 billion a year on Apple TV+ streaming service

  • 21.03.2025 14:00
  • techspot.com
  • Keywords: Apple, Streaming Service

Apple loses over $1 billion annually on Apple TV+, which has 45 million subscribers. Many users access the service through free trials or bundled deals, potentially lowering Apple's average revenue per user.

Apple ServicesAAPLsentiment_dissatisfiedNFLXsentiment_satisfied

Estimated market influence

Apple

Apple

Negativesentiment_dissatisfied
Analyst rating: Buy

Loses over $1 billion annually on Apple TV+ streaming service

Netflix

Netflix

Positivesentiment_satisfied
Analyst rating: Buy

Leading competitor with 300 million subscribers

Context

Business Insights and Market Implications of Apple's Apple TV+ Streaming Service

Key Financial Figures

  • Annual Loss: Apple loses over $1 billion annually on Apple TV+.
  • Content Spending: The company spends approximately $4.5 billion yearly on original content for the service.
  • Services Segment Revenue: Apple's services segment, which includes Apple Music and App Store, generated $26.3 billion in revenue in Q4 2024, up 14% year-over-year.

Subscriber Metrics

  • Subscribers: Apple TV+ has an estimated 45 million subscribers globally.
  • Comparison: This is significantly lower than Netflix's 300 million subscribers.

Strategic Bundling and Pricing

  • Free Trials: Apple offers extended free trials by bundling the service with new device purchases.
  • Carrier Plans: Carriers like T-Mobile include Apple TV+ as a perk on certain unlimited plans.
  • Bundle Deals: AppleTV+ is part of Comcast's $15 per month package, which includes Peacock and Netflix.

Content Strategy

  • Hit Shows: Apple has attracted top talent with award-winning shows like Ted Lasso, The Morning Show, Severance, and Bad Sisters.
  • Oscar Win: Apple TV+ won an Academy Award for Best Picture in 2022 for the film CODA.

Competitive Landscape

  • Streaming Wars: Apple is competing with major players like Netflix, Disney+, and Prime Video.
  • Financial Resilience: Unlike traditional media companies, Apple can sustain these losses due to its massive revenue ($391 billion annually) and profits ($93.7 billion net profit in the last fiscal year).

Market Implications

  • Customer Loyalty: Apple TV+ is seen as a tool to strengthen customer loyalty within Apple's product ecosystem.
  • Average Revenue per User (ARPU): The actual ARPU for Apple TV+ could be lower than $9.99 due to free trials and bundling strategies.

Long-Term Considerations

  • Strategic Importance: CEO Tim Cook has shown increased interest in the platform's spending and strategic importance post-CODA win.
  • Exclusive Content: Live sports, such as Friday Night Baseball, are part of Apple's strategy to differentiate itself in streaming.

Conclusion

Apple TV+ is a costly but strategically important initiative for Apple, aimed at enhancing customer loyalty and competing in the streaming landscape. While the service may not prioritize high subscriber numbers, its focus on premium content and ecosystem integration highlights Apple's long-term vision in the media industry.