Report: Executives Scrutinize Apple TV+ Costs Amid $1 Billion Annual Losses
Apple executives are reportedly taking a closer look at the costs of the company’s streaming service, Apple TV+, because it is the only part of Apple’s services business that is not profitable.
Apple TV+ has about 45 million subscribers but is losing more than $1 billion a year, The Information reported Thursday (March 20), citing unnamed sources.
Apple did not immediately reply to PYMNTS’ request for comment.
Losses are not unusual in the early years of a streaming business, and Apple’s business plan for Apple TV+ foresaw losses of $15 billion to $20 billion in its first decade, according to the report.
However, amid executives’ scrutiny of spending, Apple trimmed about $500 million last year from the $5 billion annual Apple TV+ had for content, per the report.
Apple’s services sector is a major growth driver. This business — which includes subscriptions, warranties and licensing deals — achieved record revenue and a 14% year-over-year increase in the fourth quarter, PYMNTS reported Jan. 30.
The company reported at the time that it had over 1 billion subscriptions, including direct subscriptions for services like Apple TV+ and iCloud and subscriptions to third-party apps through the company’s App Store.
The services business has seen nearly $100 billion in revenue in the past year, with paid subscriptions growing at a double-digit pace and customer engagement with service offerings increasing.
In February, Apple made the Apple TV app available on Android, allowing users of Android mobile devices to download the app to subscribe to Apple TV+ and MLS Season Pass, the home of Major League Soccer.
“Following its launch on November 1, 2019, Apple TV+ became the first all-original streaming service to launch around the world, and has premiered more original hits and received more award recognitions faster than any other streaming service in its debut,” the company said at the time in a press release.
The company’s February announcement about this change marked the first time the Apple TV+ app was made available for Android devices, though it already worked on Roku devices, game consoles and most other smart TVs, in addition to Apple’s own devices.
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