Apple TV+ is almost certainly a money-loser right now

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Apple TV+ could have 26 million paying subs by 2025; 2.6 million currently
Apple TV+ has a lot going for it. But it's probably not raking in a whole lot of cash.
Photo: Apple

Apple hasn’t yet provided details of the subscriber numbers for Apple TV+. However, based on analysis it would be highly surprising if Apple’s not losing a whole lot of money on the service.

Based on a Statista estimate of 40 million subscribers in December 2020, and taking into account a report suggesting that 62% of viewers are accessing the service via a free trial, Apple could be making just under $76 million per month from Apple TV+.

$76 million is, of course, nothing to be sniffed at. It means that, if Apple TV+ was spun off as its own business, it would be pulling in annual revenues of close to $1 billion. That doesn’t sound bad for a business that only launched in November 2019. If 100% of Apple TV+ customers was paying, this would mean monthly revenues of just under $200 million.

A $1 billion a year business… in revenue

But it makes it extremely unlikely that Apple TV+ is anywhere close to making a profit for Apple right now. Apple initially set aside $1 billion for making its shows, only to blow past this number. In August 2019, before Apple TV+ launched, a report claimed its budget was $6 billion.

The spending hasn’t slowed down since then, either. Apple reportedly spends more on The Morning Show than HBO did on the final season of Game of Thrones. The Morning Show has been renewed for multiple seasons, and had to undergo a big rewrite for the upcoming second season.

Then there are acquired movies like Martin Scorsese’s upcoming Killers of the Flower Moon, budgeted at between $180 million and $200 million. Original funder Paramount had originally planned to pay for the movie itself, only to supposedly balk at the high price tag. Apple swooped in to the rescue. And all that A-list talent from Will Smith to Samuel L. Jackson to Chris Evans. And new shows and movies announced seemingly every week.

Data missing?

Without having access to Apple’s books, it’s not clear whether the Apple TV+ budget has extended beyond that initial $6 billion. Even if it hasn’t, however, that money would need to last six years’ worth of programming to break even at current estimated revenues. Even taking into account the reduced programming quantities on Apple TV+ versus, say, Netflix, that sounds like it would be a tall order.

Netflix, by comparison, has a reported content budget of $19 billion for this year alone. It spent $2.4 billion in 2013 at a time when no other tech companies of note were doing original content.

Apple TV+ vs. Disney+

One of the most notable comparisons with Apple TV+ is the similarly plus-signed Disney+. Both services launched at around the same time. However, Disney+ has now officially surpassed 100 million subscribers. Disney+ is rapidly catching up to Amazon Prime, which has 150 million subscribers. It’s approximately halfway to catching up with Netflix and its 203 million+ subscribers.

According to analysis by the website Fandomspot, which also brought the Apple TV+ numbers to Cult of Mac‘s attention, Disney+ is on course to pull in $1 billion in revenue per month by July. It could be the world’s biggest streaming service by 2023 or 2024.

I could be wrong about this, of course. Numbers of Apple TV+ subscribers may be far, far higher than are being reported elsewhere, and there’s a chance that 90% of customers may be paying. It’s also important to note that Apple’s strategy with Apple TV+ might not be the same as Netflix’s or even Disney+’s. Apple wants to sell devices — and, if throwing in a year’s free Apple TV+ makes people marginally more likely to buy a new $1,000 phone in a year, that could be worth it.

Apple’s doing astonishingly well when it comes to its balance sheet, with a diversified business and some seriously big hits under its belt. But Apple TV+ as a profitable powerhouse? That doesn’t look like it’ll happen any time soon. Maybe one to file under the same “hobby” status that Steve Jobs once used to refer to the Apple TV set-top box.

Are you an Apple TV+ subscriber?

Is there additional detail I’m missing here? Are you a paying Apple TV+ subscriber? If so, what do you make of it? Let us know your thoughts in the comments below. Apple TV+ is available for $4.99 per month, or for free for one year if you buy a new iPad, iPhone, Mac or Apple TV. You can also get it as part of Apple’s bundle subscription service Apple One, which includes Apple TV+ as part of a broader collection of services for a knock-down price.