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

[CC77]

Other than Severance, they don't market the shows and movies at all. There's none of the studio PR push - press tours, advance reviews, marketing integrations, etc -- to get people interested in new shows, and no significant back catalog (i.e. Friends on Peacock, Sopranos on Max, etc.) that would get people in either. It feels like a hobby for Apple, and it's producing good stuff, but someone needs to get serious if they want to be a real player.

Also as others have said, the name is so confusing. I can watch Apple TV+ on my Apple TV device or by using the Apple TV app on my (non-Apple) TV but I do need to go to the Apple TV+ section of the Apple TV app or open the Apple TV+ app on my Apple TV. Now imagine explaining this to my mom and dad.

 

[0049190]

Meh. I never paid for iCloud storage and never will. Its free and easy to back everything up to local storage.

Technically it’s not free as you had to buy the backup drive. Then you have the problem of what happens if there is a fire and your files are lost. I wouldn’t pay a lot but I’m ok with $1 a month just for peace of mind.

 

[Valen1]

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

To high a price for to little content. This has become true for most of the streamers.

 

[maxfromdenmark]

Hey Macrumors, will you guys make a survey for the best Apple TV+ show? But not less then 20 titles so all we can get bigger picture.

 

[contacos]

I think requiring an Apple Account is already killing any interest for many people. Also, I don't think I have ever seen them promote anything in my country. Even Severance. I only hear about it cuz I am on a lot of English speaking pages like this one.

I personally never paid for it. There is always a free trial somewhere.

 

[Osxguy]

This is all streaming services. Silicon Valley tried to reinvent the wheel but this wheel already has larger corporate control. Sadly I feel the need to go back to cable and TiVo at least I could fast forward through commercials. This also shows the cost to create cinema and why we should respect it more whenever the stream wars end.

 

[foobarbaz]

I don't know about you, but I think Apple One is kind of a bad deal, unless you already want most of the services.

If it were more aggressively priced, a clear no-brainer price, I think they would end up with more money. There'd be some resistance to ever cancel it. Amazon Prime was once a great example of this.

But things being as they are, I end up cherry picking services. TV+ twice a year to watch new seasons. Arcade during kid's summer break. Ofter those are covered by free month offers.

Ask for too much money, and you get none. (Same with SSD prices. If they were simply overpriced, I'd get 2TB just for the heck of it. But with prices being outright ridiculous, I conserve space and buy an external SSD instead.)

 

[masterhiggins]

It would probably help if they stopped canceling their good shows. Constellation was excellent.

 

[sunapple]

It was clear when things got political Apple should not have been in the movie and tv business. And streaming was such a 2020 COVID hype, that’s over now.

 

[RMSR]

About 25 billion dollars of services revenue is what apple gets from Google for setting it as the default for all Apple devices (ios and mac).

It is easy money and they don't have to do anything to get it. It is similar to patent royalty for invention. Only in this case, the invention is the loyal apple user base that does not change the defaults. I am not sure what other default agreements have been signed by Apple.

All of the Google searches in apples devices adhere to Google's privacy policy (not apples).

So, even if all other services are turned off. Apple will make a lot of money by selling defaults.

 

[oink_oink]

What will Tim Apple think of next? Air, pro, max, and ultra Apple TV tiers? Using their very smart Siri to make AI shows and movies and save costs on real actors?

 

[0049190]

TV+ would be more attractive to me if it had a library of old content like the other streaming services have. It’s not worth the money for the limited range of new original content.

 

[eveluvsrainbows]

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.

The + games are titles that remove all in app purchases and paid unlocks and instead unlocks the full game. The .io games are just fun silly games that people can play to waste time.

It’s not scammy.

 

[mazz0]

the spy action-comedy film "Argylle." The movie stars Henry Cavill and Dua Lipa

No it doesn’t. It stars Bryce Dallas Howard and Sam Rockwell. Cavill and Lipa were smallish parts. Also, it wasn’t very good.

 

[Rogifan]

We all know the cash cow within services is the 30% Apple takes off App Store IAP. And governments are starting to disrupt that. Maybe it’s time for Eddy Cue to retire He’’s been at Apple since the late 80s. Get some new blood in there.

 

[il_teo77]

Many of you said almost everything. I am an Apple One subscriber (highest tier). Mainly because of the following:
- family sharing (all subscriptions apply to everyone (family of four)
- iCloud storage although I pay a separate iCloud storage standalone as 1 is not enough
- fitness + (for me the most underrated service, might be because most tech bloggers don’t use it, but I still have to see the level of attention it deserves, in my opinion of course)
- AppleTV+ I think the naming is a mistake because it is too much associated with Apple, but I cancelled paramount + in a heartbeat and am an avid AppleTV+ watcher. It delivers greater content than Paramount and Disney+ (which I keep because of 2 daughters).

I “pay” for news+ which is not available in my country.

Please take this as a personal opinion of a person living outside the US. Which might help giving it some perspective.

Apple has to drastically step up their advertising game in services as they don’t sell alone and most of “not the US” isn’t even aware they exist, let alone know of their value.

 

[Johnnyboy55]

Maybe Apple TV Air or Apple TV Pro would work better /s

Or a more affordable ad supported tier.
Apple TVe

 

[Rogifan]

Apple should’ve gotten rid of Eddie Cue years ago. What da hell has he done that turned into anything of value?

Remember this?

 

[turbineseaplane]

Remember this?

View attachment 2494177

I wish I didn't

Major vibes of this:

 

[Stella]

Apple Arcade is lackluster. Took the free trial, and didn't continue. I'm not surprised it's struggling.

Tried AppleTV, lacks content. Found it OK for a handful of movies / shows but after that, why continue to pay?

 

[Rogifan]

I wish I didn't

Major vibes of this:

 

[urtules]

I wonder if Apple Marketing made a mistake by making it available everywhere without any promotion. The shows getting promoted but not the service. Everyone knew when iTunes became available on Windows because it was Mac exclusive for some time. I wonder if Apple TV+ being exclusive and then becoming available everywhere would make it more known to the public.

 

[MaverickCC]

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.

You're missing out. The plus typically denotes that they fixed the game by removing the pay to win parts and just including them for 'free'. So basically your view is inverse from reality. I'm not saying that makes it worth it, but the philosophy is a good one!

 

[Johnstrass2]

It means there are no in-app purchases like the non-plus version.

That gets onto another theme. I wish Apple App Store had a button we could search for apps that do not have extra subscription or in app purchases.

I’m pretty old-school. I only buy apps that are one time fee. I recently bought an app that was a $300 onetime fee. Well worth it and I’m sure the developer made a lot of money.

I’ve been playing my favorite game FTL (faster than light for iPad) for several years now I bought it once for I think six dollars. As far as I know, the developers made a lot of money off of it.

So not everybody needs this Mandatory subscription or in app purchase model

 

[MaverickCC]

Although I like a couple of the series Apple has produced, Ted Lasso and Severance come to mind, it isn’t a business Apple should be in. It is a completely different business from where Apple has competence. It has different business dynamics and cycles. There’s a reason business schools teach against the conglomerate business model.

Good b-schools would never be so definitive. Yes, haircuts and oil changes typically don't mix but others often do! The key to adding new lines of business is determining if they have a 'value add' great enough to overcome the distraction/cost of starting it up. Streaming services are actually not a bad business for tech to go after... as they help sell devices and keep things 'online'.