Apple’s Streaming Service Is Losing A Ridiculous Amount Of Money

According to a report published today in The InformationApple TV+, the media streaming service created by the tech giant in 2019, is posting an annual $1 billion loss. While streamer start-ups are expected to struggle at first as they build up their subscriber base and original programming library, they should be headed toward something approaching profitability six years in. For instance, Comcast’s Peacock, which launched in 2020, went from losing $2.5 billion in 2022 to $372 million in 2024. That’s still a load of red ink, but at least they’re losing money in the right direction.

So why is Apple TV+ still hemorrhaging so much cash despite being home to such popular and/or celebrated series as “Severance,” “Ted Lasso,” “The Morning Show,” and “Shrinking?” And why isn’t Apple freaking out over it?

It’s a bit of a mystery, actually, and it should be a sad commentary on the state of the entertainment industry that a company can blow through $1 billion for one calendar year and not be shut down immediately. But Apple isn’t a media company. Like Amazon, they play by different rules than the rest of the streaming industry. And while shareholders might be distressed by one of the company’s divisions routinely putting up lousy numbers, as long as it’s not a noticeable drag on Apple’s business overall, there’s no real incentive to do anything drastic.

Originally, Apple wanted Apple TV+ as a generator of original content that would not be beholden to licensing issues via third-party distributors. Given how long it takes to generate enough films and TV series to be deemed of value to subscribers, this approach was doomed from the beginning. Apple TV+ eventually added vintage shows à la their competition, while striking deals with the Jim Henson Company for the rights to “Fraggle Rock” and the “Peanuts” franchise for exclusive distribution of their classic animated titles.

Apple TV+’s subscriber numbers began to improve — though, at present, their subscriber base of 45 million lags far behind nearest competitor Paramount+’s 77.5 million users. Netflix is still top of the heap with 301.6 million subscribers, and no one’s likely to get within striking distance anytime soon.

If you’re curious as to what a hit series like “Severance” can do in terms of wooing new subscribers, independent research firm Antenna estimated that the Ben Stiller-directed show added two million new users. That’s a great number for an individual series, but for Apple TV+ to overtake Paramount+ and start stanching that annual $1 billion loss, they’ll need multiple buzz-producers like “Severance” every year.

Is there anything on the horizon that suggests Apple TV+ could boost those subscription numbers?

Apple TV+ has been aggressive in signing deals with popular actors like Reese Witherspoon, Jennifer Aniston, and Natalie Portman, and they’ve got an untitled Vince Gilligan series starring Rhea Seehorn coming at some point. There’s more sizzle on the film front with the forthcoming releases of Joseph Kosinski’s racing drama “F1” starring Brad Pitt, Spike Lee’s thriller “Highest 2 Lowest” starring Denzel Washington, and Jonathan Goldstein and John Francis Daley’s adventure flick “Mayday” with Ryan Reynolds. The only downside to this approach is that some of these movies will be released theatrically before the stream exclusively on Apple TV+.

In the meantime, until Apple CEO Tim Cook decides his streamer’s money losing ways are untenable, he’ll likely stick to his standard operating procedure, which is to overlook the red ink while celebrating the Emmy and Oscar wins his company keeps racking up (one major feather in his cap: “CODA” was the first film released by a streamer to win the Academy Award for Best Picture). Considering that Apple made $391 billion over the last fiscal year, that $1 billion is a drop in the bucket. As long as the company keeps financing essential (if uncommercial) films from master filmmakers like Martin Scorsese (whose brilliant “Killers of the Flower Moon” desperately needed Apple’s involvement to be made on the director’s exacting terms), I don’t care and you shouldn’t either. It’s not our money.