Report: Apple Loses $1 Billion a Year to Boost Streaming Service

Apple is reportedly losing over $1 billion a year on its streaming service, Apple TV+. The iPhone maker spends around $5 billion annually on new content, despite scaling back to $4.5 billion last year. Apple continues investing in its push for a greater foothold in the entertainment industry.

Apple TV+ launched in 2019 and currently has around 45 million subscribers – far from Netflix’s 300+ million. However, some experts argue Apple TV+ was never meant to have such a wide appeal as some popular alternatives.

Unlike its competitors, Apple TV+ doesn’t offer a reduced-price ad-supported tier or a vast catalog of licensed content. Instead, it streams exclusive content produced by the Cupertino computer company. But its unique strategy has yet to prove profitable.

“They want to be the creative storytellers. They’re more focused,” head of research at Manhattan Venture Partners, Santosh Rao says about Apple’s strategy.

Apple has also made efforts to attract a wider audience through strategic bundles. For example, Comcast sells the StreamSaver bundle, which packs Apple TV+, Peacock, and Netflix. Furthermore, T-Mobile includes Apple TV+ for free on its top-tier unlimited wireless plans. Apple also offers a three-month free trial of the service to new iPhone, iPad, Apple TV, or Mac buyers.

For now, Apple TV+ is still expanding despite its financial losses. If anything, an X post confirms CEO Tim Cook is willing to fund another season of the most-watched show on Apple TV+, Severance.

The streaming service recorded a 14% year-over-year growth, with revenue reaching $26.34 billion in the first quarter of the year, up from $23.12 billion at the beginning of 2024.

Apple’s aggressive investment in different markets is part of a broader push to diversify revenue streams beyond its core smartphone business. However, critics argue the company should allocate more resources to artificial intelligence.