Report: TV+ Losing $1 Billion Annually as Apple Services Falter

[MacRumors]

Apple TV+ is hemorrhaging money amid a broader stall in Apple's services, according to a new report from The Information's Wayne Ma.

The paywalled report reveals that Apple TV+ is the only Apple subscription service that is not profitable. While its subscriptions grew to around 45 million last year, it is still losing more than $1 billion annually. The company has spent more than $5 billion a year on content since the service launched in 2019, but this was reduced by $500 million in 2024 in response to a push for cutbacks from Apple CEO Tim Cook and other executives.

Cook apparently raised questions last year about several movie deals with Apple TV+ executives, including for the spy action-comedy film "Argylle." The movie stars Henry Cavill and Dua Lipa, and cost $200 million to produce. Cook reportedly complained that the movie had not found a significant audience or generated more subscribers for Apple TV+.

The report explains that "the audience for Apple TV+ remains relatively small," constituting less than 1% of total U.S. streaming service viewing. Netflix and Amazon represented 8.2% and 3.5% of total viewing in February.

Apple's initial business plan for Apple TV+ predicted losses of between $15 billion and $20 billion over its first decade. While major losses are normal in the streaming industry, it represents a major departure for Apple which normally exercises fiscal discipline.

Executives such as Eddy Cue initially shielded Apple TV+ executives from budget scrutiny and rejected a proposal to increase oversight of programming costs. Apple did not have internal data on whether Apple TV+ would tempt customers to buy Apple devices.

Despite successes such as "CODA" winning an Oscar for best picture, Cook began closely scrutinizing Apple TV+'s financial performance from 2022 and advocated more oversight. The use of private jet travel for stars at the cost of hundreds of thousands of dollars per flight came under particular scrutiny, and led Apple to ask executives to negotiate better deals with flight-chartering companies.

Apple's overall corporate profits are so significant that it can easily absorb the losses from its streaming service, but it continues to forgo widespread appeal.

Apple Music, Arcade, News+, and Fitness+

Services is Apple's fastest and most profitable category, with gross margins exceeding 75%, compared to just under 40% for hardware. In its most recent fiscal year, services revenue rose 13% to more than $96 billion. However, other than iCloud+, Apple's other services are said to be in poor health.

Apple Music's growth has reportedly virtually stopped and it remains "only marginally profitable." Since it pays artists and labels more than 70% of its revenues, it has a single-digit–percentage gross margin. Cue apparently told some colleagues privately that he doesn't believe the service will ever reach 100 million paying subscribers. Moreover, overall iTunes Store sales are now actively shrinking.

Apple News+, Fitness+ and Apple Arcade are said to be struggling with low usage and profits. Apple Arcade only had two million users during its first year of operation, with roughly 25% of them on free trials.

Similarly, Apple News+ purportedly suffers with low engagement and the number of monthly active users is in the low single-digit millions. Apple Books and Apple News+ was subject to layoffs in 2024 due to weak performance.

Longtime Apple services executive Peter Stern, who oversaw platforms including Apple TV+, abruptly departed the company in early 2023, claiming he was unable to run the streaming service in the way he needed to amid pressure to increase subscriber numbers. Apple subsequently reshuffled his former group, separating Apple TV+, Apple Music, and international content from News+, Fitness+, Apple Books, and iCloud+.

Apple One

The report adds that most users do not sign up directly for Apple's services, instead opting for an Apple One bundle, which inflates the perceived interest in each service. Many who sign up to Apple One are motivated to subscribe so primarily because of iCloud+ rather than other services. Without Apple One, Apple Arcade and Apple Fitness+ would not be profitable.

Article Link: Report: TV+ Losing $1 Billion Annually as Apple Services Falter

 

[turbineseaplane]

Producing TV and Movie content is not a business Apple should be in at all

 

[abatabia]

The content on Apple TV plus is very hit or miss. For every decent show there are what seem like 5 shows that seem exactly alike to me. Something happens to someone and that person has to come to terms with it. Most of the shows honestly put me to sleep. The only decent recent show is slow horses. Severance had a great first season but season 2 is painfully bad. I stopped watching.

 

[tmmacops]

I like the Apple TV, but Apple TV+ is actually a waste for me. Had a couple interesting shows, but nothing great. They need to make something like Youtube TV or Hulu to truly compete and make something worth while...

 

[turbineseaplane]

Services is Apple's fastest and most profitable category, with gross margins exceeding 75%, compared to just under 40% for hardware. In its most recent fiscal year, services revenue rose 13% to more than $96 billion. However, other than iCloud+, Apple's other services are said to be in poor health.

Notice how pivotal iCloud+ is?

See why they screw everyone on base storage and component upgrade pricing?

Notice how they never bump the included iCloud storage (or add to it per new device purchased) so you have to pay for iCloud+?

Is it more clear now why they offer no paid iCloud storage options between 200GB & 2 TB!?

The iCloud+ "business" is largely a racket

People are getting screwed, by design

 

[G3Blue]

Over the past few years my favourite TV series are on Apple TV.
However, every time I try and promote this to people, no one is interested when they hear Apple TV. I've tried.

There's a few movies I like but none are re-watchable. IMO, a lot of money has been wasted on the movie side of Apple TV.

Favourite list below -
Severance - great although 2nd series was too slow
Silo - again too slow
Slow Horses - one of the best
Ted Lasso
Dark Matter - first half excellent then faded into rubbish
Foundation - excellent
For All Mankind - excellent
Presumed Innocent - excellent
See - good at the time
Sugar - excellent
Defending Jacob - excellent
Tehran - another favourite
Wecrashed - good
Liaison - fantastic
Bad Monkey

 

[ab2c4]

There are just too many subscription services out there. My wife and I about a year ago started cutting services as we realized we can only watch 2-3 per month and still get our moneys worth, no sense in paying for a bunch of streaming platforms every month. Apple TV+ was a casualty for us, however, with how easy it is to start and stop services we just turn things on and off as wanted/needed. Eventually we will subscribe to TV+ again when we want to take a break from another service.

 

[Nick A]

Apple TV+ I feel generally has high quality content especially compared to other streaming services that just green-light every project.

With that said, I think people just have streaming service fatigue. There's wayyy too many services to subscribe to, and I don't think Apple TV+ has enough content to warrant people staying continuously subscribed for months when there's so many other streaming options.

 

[Johnstrass2]

Producing TV and Movie content is not a business Apple should be in at all

Agree. They need to do like netflix and scour the world for high quality content that others might have overlooked. Turkish films and series for example are quite good “ cost $200 million to produce“ should never be in apples business model. Just contrac with sony to stream furst releases

 

[Onimusha370]

I really wish Apple would stop wasting its time on Apple TV+, arcade, news etc. I’d much rather they used those resources to improve MacOS/iOS in a meaningful way.

I think the services growth is inflated by the huge amount of free trials given on services when buying new Apple devices. From memory, that revenue is effectively transferred from the device to the services category, meaning in some way, we’re actually overpaying on hardware in order to subsidise services that many of us don’t care about.

I thought Apple was adding services so that their AR/VR platform could really stand out from others, but the only example of that is the immersive videos (which don’t require a TV+ subscription service anyway). Lack of focus is really costing them.

 

[Mr_Ed]

Notice how pivotal iCloud+ is and how it ties into them screwing everyone on base storage and upgrade pricing to further support the iCloud+ business?

This all needs to stop.

Tim needs to be run out of there.

Someone thought that chasing after every penny they thought they could get in services looked like an easier path than focusing on the day-to-day user experience of 1.6 billion users of their software. And it shows.

 

[spazzcat]

Content costs money, and you need it to have a streaming service. It will take years of content production.

 

[frozen220]

All they need to do is rebrand Apple TV+ as Severance+

 

[TechWhisperer]

Apple should have bought Disney. But they wanted to do it the ‘Apple way’ which obviously isn’t working anymore in 2025.

 

[spazzcat]

I really wish Apple would stop wasting its time on Apple TV+, arcade, news etc. I’d much rather they used that resources to improve MacOS/iOS in a meaningful way.

I think the services growth is inflated by the huge amount of free trials given on services when buying new Apple devices. From memory, that revenue is effectively transferred from the device to the services category, meaning in some way, we’re actually overpaying on hardware in order to subsidise services that many of us don’t care about.

I thought Apple was adding services so that their AR/VR platform could really stand out from others, but the only example of that is the immersive videos (which don’t require a TV+ subscription service anyway). Lack of focus is really costing them.

You can't throw bodies at projects. If these services go away most likely so will the people that work on them.

 

[xmarcuswildx]

Apple Arcade is just straight garbage. I’ll never open a single game that its title ends with .io or ends in a +. Wtf does that even mean? It just sounds scammy. The worst service by far.

 

[jrlcopy]

They just need to change the damn name.
You can't sell an Apple TV, and then expect people to know that there's a subscription service called Apple TV+.

No one knows that it exists or how to even find it.

They need a name that separates it a bit, so people without Apple products know they can actually watch it.

 

[bookcase]

I have Apple One for TV, music, and cloud storage. I don't use any of the other parts of the bundle. TV+ suffers from one of the main problems of other streamers: everything is serialized. Sometimes I just want to sit down and watch a movie, instead of committing to another series. But I also think the inflated budgets for mediocre content is a problem with the movie industry at large.

 

[Howard2k]

I think AppleTV+ has some absolutely top notch content, but there's just not enough content on there for me to justify the monthly subscription.

 

[cmichaelb]

Argylle would have been better if Cavill was the main character, it ended up feeling like a bait and switch.

And calling Dua Lipa a 'star' of the movie for her few minutes is a HUGE stretch, and I'm a Dua fan.

 

[Biro]

The content on Apple TV plus is very hit or miss. For every decent show there are what seem like 5 shows that seem exactly alike to me. Something happens to someone and that person has to come to terms with it. Most of the shows honestly put me to sleep. The only decent recent show is slow horses. Severance had a great first season but season 2 is painfully bad. I stopped watching.

Frankly, aren’t you describing almost everything that comes out of Hollywood today? Virtually everything is written to a tight formula - with half of it being another superhero sequel or reboot. Now, it’s probably true that most of Apple’s offerings are too cerebral for most Americans these days and that there are too many streaming services in general.

 

[SW3029]

I love the Apple News app, but I can't bring myself to pay $12.99 a month for News+. If News+ was around $5-7 a month, I might do it. Or I might even do a News+ annual subscription for $99 a year.

And Apple One would be much more tempting if you could mix and match your desired services in an a la carte style.

 

[zorinlynx]

They just need to change the damn name.
You can't sell an Apple TV, and then expect people to know that there's a subscription service called Apple TV+.

No one knows that it exists or how to even find it.

They need a name that separates it a bit, so people without Apple products know they can actually watch it.

You might be on to something there. At least one person I've recommended Severance to has said they can't watch it because they don't have "an Apple TV". I tell them they can probably subscribe on whatever they have and they seem surprised at this.

Frankly, I turn my subscription on when there's stuff to watch, and off afterwards. So many subscriptions add up. I wonder if a lot of people do this and if this might be why it's struggling.

 

[npmacuser5]

AppleNews should be very profitable. Apple has added an ad to every screen scroll. A very big use of screen space ad to be exact.

 

[Helvetesdörr]

Is it even feasible for a streaming service to grow in 2025 when people are pretty much fed up with them since they've become the new cable? It's fine to sub now and then for a show you might really want to watch but staying subscribed is just too expensive and too inconvenient these days.