Apple TV+ makes losses – but Apple remains relaxed

Apple TV+ has established itself as a serious streaming service in recent years. With high-quality productions like Ted Lasso, Severance, and The Morning Show, the service has held its own in a highly competitive industry. But despite rising subscriber numbers, Apple's streaming business is operating at a loss. A new report shows that Apple TV+ is making an annual loss of around one billion US dollars. What's behind this? And why doesn't Apple seem to be bothered by these losses?

Since its launch in 2019, Apple TV+ has built a substantial library of exclusive series and films. While the service is gaining attention with prestigious productions and awards, the question of profitability remains open. Streaming services cost enormous sums for content, infrastructure, and marketing before they begin to generate profits. Apple's willingness to undertake this financial undertaking demonstrates a clear strategy. But how exactly is Apple TV+ doing after five years?

Apple TV+ sees increasing subscriber numbers, but remains unprofitable

A report by The According to information, Apple TV+'s annual loss is over one billion US dollars. It was previously known that the service is not yet profitable, but a concrete figure has not yet been released. In 2023, Apple TV+ had around 45 million subscribers. It is unknown how many new customers were added due to the recent success of the series Severance. However, a separate report from Antenna shows that Apple TV+ gained two million new subscribers in just one month – a strong increase. Despite this positive development, Apple TV+ remains a financial loss-making business. Other streaming services such as Netflix or Disney+ have taken many years to break even. However, Apple appears to be consciously choosing this long-term strategy (via The Information).

Why Apple is taking the losses

It's not uncommon in the industry for streaming providers to operate at a loss for long periods before becoming profitable. Netflix was in the red for over a decade before finally turning profitable. Disney+ also continues to post heavy losses. However, Apple is in a unique position. The company generates enormous profits from its other businesses, so Apple TV+'s losses aren't dramatic in comparison. Last quarter, Apple reported revenue of $124 billion and profit of $36 billion. Compared to that, a $1 billion loss per year is more of an investment than a real problem.

Apple cuts budgets for films but continues to invest in series

To better control costs, Apple has reduced its spending on films in the past. While CODA was the first film from a streaming service to win the Academy Award for Best Picture, there were also some box office disappointments. These setbacks have led Apple to focus more on direct streaming rather than financing major theatrical releases with high production costs. However, the company appears to continue investing heavily in series. Despite some budget cuts, Apple is willing to accept the losses to establish Apple TV+ as a serious platform. Successful series such as Ted Lasso and Severance have earned the service a loyal fan base, which can increase the value of Apple's entire ecosystem in the long run.

Is Apple TV+ worth it for users?

Apple TV+ currently costs €9.99 per month and offers exclusive content not found on other platforms. In addition to series like The Morning Show, Silo, and Shrinking, there are also high-quality films, some of which have even been shown in theaters. Many users are wondering whether the subscription is worth it. One advantage is that Apple offers various ways to use Apple TV+ for free. Many buyers of Apple devices receive the service free for several months. There are also regular promotional offers or bundles that include Apple TV+.

Apple TV+: A long-term investment for Apple

Even after five years, Apple TV+ isn't profitable, but Apple can afford these losses. Unlike pure-play streaming providers, Apple has many other revenue streams that offset the loss. For Apple, the streaming service isn't just a platform for series and films, but also a means of making the entire Apple ecosystem more attractive. Whether and when Apple TV+ will break even remains to be seen. But one thing is clear: Apple will remain in the streaming business and will continue to invest, even if it remains expensive for the time being. (Photo by Unsplash / James Yarema)