Apple TV+ is facing a tough time in the streaming world. Reports suggest the service is losing over $1 billion annually despite having hit shows like Ted Lasso and Severance. With a subscriber base of around 45 million, it still lags behind giants like Netflix and Amazon Prime Video.
The losses, while significant, don’t seem to shake Apple too much since the company made a whopping $391 billion in revenue in 2024. But this struggle highlights how tough it is to break into the streaming industry—even for one of the world’s most valuable tech companies.
Apple has invested billions in Apple TV+ since its launch in 2019, with around $5 billion annually going into original content. However, in 2024, for financial reasons, Apple cut back on expenditures by $500 million, bringing down its budget to $4.5 billion. This move reflects pressure from top executives like CEO Tim Cook to make the service financially viable.
Interestingly, Apple never envisioned generating profits in the first decade of Apple TV+ operations. Apple’s projections estimated losses of between $15 and $20 billion for a decade. While it’s normal for streaming platforms to make losses in the initial stages, this is not typical of Apple’s usual careful financial planning. Despite losses, sustained investment shows that Apple plays a long game in streaming.
One of those is whether Apple is getting enough return on investment. Action-comedy film Argylle, reported to have been made for $200 million, failed to generate the hype it was expecting and did nothing to increase subscribers. Despite productions like those big-budget ones, Apple TV+ remains under 1% of U.S. viewing. With Netflix’s 8.2% and Amazon Prime Video’s 3.5% to use for comparison, it is clear that Apple has a long way to go.
Despite this, Apple TV+ has been nominated for more than 2,500 awards for its content. Shows like Ted Lasso, The Morning Show, Severance, Silo, and Shrinking have won audiences and critics alike. The recent victory of Severance even helped Apple gain around 2 million subscribers in a single month. However, awards and accolades do not always translate to revenue, Apple’s biggest challenge.
Apple has a different strategy for streaming than other firms. Apple TV+ only produces original content and doesn’t license existing shows and movies. This is beneficial because it has excellent quality control but limits its ability to compete with firms offering vast content libraries. Netflix, for example, has both original productions and an extensive library of licensed content. It is, therefore, attractive to a larger audience.
Apple’s exclusive, quality-driven approach means it must continually invest in fresh content to keep subscribers interested. Unlike Apple Music or the App Store, which generate steady profits, Apple TV+ demands ongoing spending without an immediate return. This puts added pressure on Apple to ensure each production is worth the investment.
While Apple TV+ is losing over $1 billion a year, it’s a drop in the ocean compared to Apple’s overall financial strength. The company reported $93.7 billion in net profit in 2024, with services like iCloud+, the App Store, and Apple Music performing exceptionally well. The broader Services division brought in $96 billion for the fiscal year, showing strong growth despite the losses from Apple TV+.
Apple isn’t just looking at direct profits from Apple TV+. The service helps strengthen Apple’s ecosystem, keeping users engaged with its devices. By offering exclusive content, Apple keeps customers loyal to its brand, which can indirectly drive sales of iPhones, iPads, and other products. This long-term strategy could justify continued investment in the streaming platform, even if it remains unprofitable.
The streaming market is highly competitive, with major players like Netflix, Amazon Prime Video, and Disney+ dominating the industry. Apple TV+ has made a name for itself with quality programming, but its relatively small content library makes it harder to attract new subscribers.
Even industry leaders face financial challenges. Many streaming services, including Disney+ and Paramount+, have struggled to profit. Apple’s exclusive-content strategy makes its path even trickier, requiring constant investment to sustain momentum.
Apple’s recent budget cut suggests the company is becoming more cautious with its streaming investments. In the future, Apple may focus on fewer but more impactful productions, ensuring that each new show or movie has the potential to drive significant subscriber growth. Additionally, Apple might consider bundling Apple TV+ with other services to make it more attractive to customers.
