Despite huge investment and award-winning shows, Apple TV+ is still struggling to make a mark and reportedly losing up to a billion euros a year.
Apple is reportedly losing $1 billion (€923 million) a year on its streaming service. As the last episode of the second season of its hit show ‘Severance’ airs this week, it’s a damning indictment of the tech firm’s Netflix competitor.
Two sources close to the company confirmed to The Information that the tech firm has spent $5 billion (€4.62 billion) a year on Apple TV+ since it launched in 2019.
Apple’s huge investment into the video streaming market hasn’t reaped a similarly sized subscriber base. Despite shows like ‘Severance’ and ‘Ted Lasso’, it lags significantly behind competitors Netflix, Amazon Prime Video, and Disney+.
Netflix has the largest number of subscribers at just over 300 million. While Amazon Prime Video operates on a slightly different model, allowing non-subscribers access to individual titles to rent and buy, it’s estimated to have around 200 million subscribers. Disney+ also is estimated to have around 125 million subscribers.
Although Apple hasn’t officially revealed its subscriber count, as it doesn’t release it as an individual statistic separate from other services like Apple Pay, The Information reports it at a lowly 45 million subscribers.
Given Apple is one of the biggest companies on the planet, something is going disastrously wrong for the tech firm’s foray into video streaming content.
It’s not like they haven’t heaped piles of cash on impressive shows. Chiefly, there’s ‘Severance’. The dark sci-fi series about office workers with split consciousnesses was nominated for 14 Emmys after its first season in 2022. The Ben Stiller-produced show returned to screens this year and has immediately been in contention for the prestige TV gongs alongside ‘The White Lotus’ and ‘Adolescence’.
Similarly, Apple has had other hits in shows like ‘Ted Lasso’, an upbeat football comedy series, and ‘The Morning Show’, a satire of network broadcasting shows. Across its original programming, Apple TV+ shows have earned more than 2,500 award nominations and 538 wins, Tim Cook, Apple CEO said in January.
On the film front, Apple has also been no slouch. It achieved its first Best Picture win at the Oscars with CODA. It has since supported multiple high-profile directors to produce bold award season-friendly work like Martin Scorsese’s Killers of the Flower Moon, Ridley Scott’s Napoleon, and Steve McQueen’s Blitz.
Yet somehow, all this money isn’t translating into subscribers. Apple is watching its investment pour straight down the drain.
Water cooler television
A major part of the problem is in the lack of social caché Apple TV+ seemingly has. Major stars sign up for expensive projects just for them to be dumped on the service without enough hype for it to drum up the kind of publicity that is innate to an HBO release.
“Water Cooler Television” is a term in the industry to describe the kinds of shows that would leave such a widespread cultural impression, it would inevitably become the topic of conversation in offices around the world the next morning.
Classic examples of water cooler TV are the slick big budget shows that came out of the beginning of the 21st century like ‘The Sopranos’, ‘Breaking Bad’ and most recently ‘Succession’. Through its decades-long reputation and weekly release schedule, HBO has been a master at capturing the ephemerality of a water cooler moment.
‘Severance’ is Apple’s first show that has somewhat replicated that level of cultural significance. Thanks to its deeply mysterious plot and confusing cliffhangers, each week it has become a genuine competitor for people’s attention.
It’s the first time Apple has managed this feat though. There are countless examples of shows that had all the making of cultural impact only to land on entirely deaf ears.
Last year, the platform premiered ‘Disclaimer’, the first TV series from Oscar-winning Mexican director Alfonso Cuarón starring Cate Blanchett. With such an impressive roll-sheet, it’s no surprise that the show debuted at the Venice Film Festival. Alas, even Blanchett couldn’t save ‘Disclaimer’ from the rubbish heap of unexciting Apple shows.
Adaptations of beloved novels like ‘Lessons in Chemistry’, ‘Pachinko’ and ‘Shantaram’ couldn’t move the needle. Nor could ‘Band of Brothers’ spiritual successor ‘Masters of the Air’ make ratings soar. On the flip-side, Apple has angered fans by cancelling shows early, as with the musical comedy series ‘Schmigadoon!’ which lasted a paltry two series – make ‘Into the Schmoods’, you cowards.
Film figures
As with TV where streamers are loath to release viewership figures, it’s hard to gauge the success of its film output even with box office figures. Killers of the Flower Moon, for example, was officially a commercial flop, grossing $158.8 million (€146.7 million) worldwide against a roughly $215 million (€198.6 million) budget.
Napoleon, which also benefited from a theatrical release in late 2023, at least managed to make around $221.4 million (€204.6 million) against its budget of approximately $200 million (€184.5 million. While industry papers estimated it fell way short of breaking even, Apple insisted the film was profitable.
Both films from highly-esteemed directors were given a rare chance for streaming service films. They were given theatrical releases and only appeared on the streaming platforms many months later.
Apple is also clearly not ready to throw in the towel when it comes to investing in big-budget film. Coming up this year alone is the hyped F1 film from Top Gun: Maverick director Joseph Kosinski, as well as the newest films from Guy Ritchie, Spike Lee, and Paul Greengrass.
Concerns over cultural impact of shows dumped on streamers is not a problem solely owned by them. Time and again, Netflix releases a show to huge fanfare the week it airs only for it to fall out of conversation almost immediately. ‘Severance’, which has just been officially renewed for a third season, may see a tide change for the tech company’s nascent streaming venture. But whether Apple’s big financial gambit on streaming success will pay off remains to be seen.
