Apple TV+ struggles to turn a profit, losing over $1 billion annually 

The company has been losing over $1 billion annually on the platform, even after scaling back its content budget by $500 million in 2023 according to Reuters.

While Apple TV+ has seen steady subscriber growth, it remains the only unprofitable Apple subscription service, raising concerns about its future in the competitive streaming industry.

Since its launch in 2019, Apple has spent more than $5 billion per year on content, banking on original films and series to attract subscribers. However, Apple TV+ still accounts for less than 1% of total U.S. streaming service viewership, far behind Netflix and Amazon, which commanded 8.2% and 3.5% of the market, respectively, as of February.

Apple’s CEO, Tim Cook, has reportedly begun questioning the platform’s financial viability, particularly scrutinizing big-budget productions that failed to drive significant subscriber growth. One such project, the spy action-comedy Argylle, which cost $200 million, did not generate the expected traction.

While losses are common in the streaming industry, Apple’s traditional fiscal discipline makes this an unusual departure. The company had initially planned for losses of $15 billion to $20 billion over a decade, but executives like Eddy Cue initially shielded Apple TV+ from financial scrutiny. That changed in 2022, when Cook pushed for tighter oversight, even cracking down on lavish private jet travel for Hollywood stars.

Despite the financial struggles of Apple TV+, Apple’s services division remains highly profitable. The segment, which includes Apple Music, Arcade, News+, and Fitness+, saw 13% revenue growth, hitting $96 billion in the last fiscal year. However, many of these services are also facing stagnation.

Despite its deep pockets, Apple’s continued losses on Apple TV+ raise questions about its long-term streaming strategy. With increasing competition and rising costs, the company must decide whether to double down or rethink its approach to the streaming market.