Apple losing a cool billion per year on Apple TV Plus

Apple’s streaming service, Apple TV Plus, is reportedly incurring annual losses exceeding $1 billion despite amassing approximately 45 million subscribers by 2024. According to The Information, this makes Apple TV Plus the only subscription service offered by the company that fails to generate any profit. Apple has already reduced its content budget from $5 billion annually to $4.5 billion as part of a broader effort to curtail spending, but it still represents quite an expensive investment as – having entered its fifth year – it’s probably nowhere near to where the company hoped it would be in terms of market share.

Despite featuring several popular examples of critically acclaimed original programming, Apple TV Plus accounts for less than 1% of the total US monthly streaming viewership, significantly trailing Netflix which commands 8.2% of that market. Analysts often point out that Apple TV Plus is meant to work as a strategic tool to retain users within the Apple ecosystem – rather than being a profit driver in and of itself – but whether the service is actually successful in that regard too is highly debatable.

Apple TV Plus operates within the company’s Services division, which also includes Apple Music, iCloud Plus and the App Store. While this division generated $26.3 billion in revenue during Q4 2024 (a year-over-year increase of 14%) several other services within it are reportedly also struggling with low usage and profitability. Apple News Plus, Fitness Plus and Apple Arcade, for instance, face similar challenges – it’s even fair to say that they might not have made a lot of business sense in the first place if they were not bundled with more attractive services as part of the Apple One subscription package.

While Apple TV Plus continues to lose money – contrary to where e.g. Netflix and Disney Plus currently stand in terms of profitability – the truth is that these losses are rather minor in the context of Apple’s financials overall. The company reported $391 billion in revenue and $93.7 billion in net profit for fiscal year 2024 (largely driven by iPhone sales), so it can easily afford to lose one billion per year in order to have a seat at the table of the most noteworthy entertainment streaming platforms globally.

Us? We are just glad that Tim Cook and friends deem Apple TV Plus worth the investment, as the service has offered some of our favorite TV shows of the last three years. People usually talk about Ted Lasso and The Morning Show and Severance and For All Mankind, sure, but Silo, Slow Horses, Dark Matter and Presumed Innocent have all been very good productions the likes of which other streaming services just can’t seem to nail very often.

Yes, Apple will have to figure out how to make a few more Oscar-worthy movies at some point – it made history with CODA in 2022 but has had no such success since – assuming the company is interested in that. Admittedly Wolfwalkers, Tetris, Wolfs, Fly me to the Moon and last month’s The Gorge were all steps in the right direction, though, and we do have high hopes for the upcoming F1, so it’s only a matter of time before an original Apple TV Plus film becomes a breakout hit. They don’t all have to be Scorcese-directed, star-studded, 3.5 hour-lasting and 200 million-costing epics to stand out, do they?