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Fears popular TV streaming service will be axed over poor ratings and '$1billion losses'

  • 21.03.2025 22:54
  • msn.com
  • Keywords: High Losses, Market Position

Apple TV+ is reportedly losing over $1 billion annually despite spending billions on content and gaining millions of subscribers. Its low audience numbers and competition from major streaming services like Netflix and Amazon Prime have raised concerns about its future, with experts predicting significant losses in its first decade. Other tech companies like Google and Amazon have also faced challenges in their streaming ventures, leading some to speculate Apple may follow suit.

Amazon ServicesApple ServicesNFLXsentiment_satisfiedAMZNsentiment_dissatisfied

Estimated market influence

Apple TV+

Negativesentiment_dissatisfied
Analyst rating: N/A

Losing over $1 billion annually, struggling with low ratings and subscriber growth despite high spending on content.

Nielsen

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Analyst rating: N/A

Reported that Apple TV+ has less than 1% monthly viewership in the US.

YouTube

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Analyst rating: N/A

Google's attempt at a streaming service fizzled out, with Cobra Kai moving to Netflix.

Netflix

Netflix

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Analyst rating: Buy

Gained content from YouTube's failure, including Cobra Kai.

Amazon

Amazon

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Shutting down Freevee, indicating challenges in streaming services.

Freevee

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Analyst rating: N/A

Amazon's ad-free service shut down, affecting its streaming strategy.

Quibi

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Analyst rating: N/A

Another failed streaming service.

Funimation

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Analyst rating: N/A

Failed streaming platform.

Context

Analysis and Summary: Business Insights and Market Implications

Financial Losses

  • Apple TV+ reported losses exceeding $1 billion per year since its launch in 2019.
  • The platform spent over $5 billion annually on content until recently, when it reduced the budget by $500 million.

Subscriber Growth

  • Apple TV+ welcomed around 45 million new subscribers in 2024.
  • Subscribers can access the service for $9.99 a month or $99.99 a year.

Market Share and Competition

  • Nielsen reported that Apple TV+ has less than 1% monthly viewership on connected televisions in the US, compared to:
    • 8.2% for Netflix
    • 3.5% for Amazon Prime Video
  • Competitors like Netflix, Amazon Prime Video, and Disney+ dominate the streaming market with significantly higher viewership shares.

Strategic Challenges

  • Apple's premium subscription model and high-content costs have failed to attract significant audience numbers.
  • Analysts note that Apple lacks a clear competitive advantage in the streaming space, unlike its hardware and App Store businesses.
  • Horace Dediu, founder of Asymco, criticized Apple's approach: "Picking winners and losers is not what the company is known for."

Competitive Landscape

  • Other tech giants have faced similar challenges in the streaming space:
    • Google shut down its YouTube scripted content initiative after failing to gain traction.
    • Amazon discontinued its ad-free video service, Freevee, in 2023.
    • Sony's Quibi and Funimation also exited the market due to poor performance.

Long-Term Financial Risks

  • Experts predict that Apple TV+ could lose between $15 billion to $20 billion over its first 10 years.
  • Despite these losses, Apple's streaming business contributed $26.3 billion (14% growth year-over-year) in fiscal 2024, accounting for 21% of total revenue.

Potential Shutdown Speculation

  • Market speculation suggests that Apple may shut down Apple TV+ due to its poor ratings and financial losses.
  • This would follow a trend of major companies exiting the streaming space, including YouTube, Freevee, Quibi, and Funimation.

Conclusion

Apple's high-content spending and lack of differentiation in the streaming market have led to significant financial losses and low viewership. While its streaming business is a notable part of Apple's revenue mix, it remains unclear whether Apple TV+ can achieve long-term sustainability or if it may follow other failed streaming ventures.