Apple is losing over $1B on streaming every year: Report
What's the story
Apple's streaming service, Apple TV+, is running at a huge loss of more than $1 billion a year, according to The Information.
The loss comes even as the platform managed to gain a whopping 45 million subscribers in 2024.
Notably, Apple TV+ is the only subscription service from the Cupertino tech giant that has not turned a profit yet.
Budget cuts
Apple tightens budget amid streaming challenges
In light of these financial woes, Apple has reportedly slashed its initial $5 billion budget for Apple TV+ content by around $500 million. The move is part of a larger strategy to take "a harder line on spending."
Even with popular original series like Severance, the platform garners less than 1% of total monthly streaming services viewership.
For comparison, Netflix holds an 8.2% share according to Nielsen data cited by The Information.
Ecosystem
A strategic move to retain users
Apple TV+ was mainly conceived to keep users within the Apple ecosystem. Netflix co-CEO Ted Sarandos addressed this strategy in a recent interview with Variety.
"I don't understand it beyond a marketing play, but they're really smart people. Maybe they see something we don't," he said.
This indicates Apple TV+ could be part of Apple's larger plan to boost user retention, engagement within its ecosystem.
Service performance
Apple Music growth slows, other services struggle
Apple's wider services business, including iCloud+ and App Store purchases, still brings billions for the company every year.
However, the sources told The Information that growth has slowed for Apple Music, which hit 100 million users last year via subscriptions and free trials.
Other services like Apple News+, Fitness+, and Apple Arcade are reportedly "struggling with low usage and profits."
Digital book sales have also declined.
Bundle impact
Apple One bundle: A lifeline for struggling services?
The Information further states that if these struggling services weren't included in the Apple One bundle (which is mainly purchased for iCloud Plus), they "likely wouldn't be profitable."
This indicates that the bundle could be giving these underperforming services a financial cushion.
Last year, Apple reportedly laid off around 100 employees in its News and Books division.