According to a report by The Information, Apple has invested over $5 billion to attract approximately 45 million viewers to its Apple TV+ since its launch in 2019. The streaming service, differing from its competitors, focuses primarily on original content such as Severance and Ted Lasso, rather than building a large library of licensed movies and shows.
Severance, a mind-bending series by comedian Ben Stiller, recently celebrated its second season finale on Apple TV+. Apple’s CEO, Tim Cook, has committed to renewing the series after it surpassed Ted Lasso to become the platform’s most-watched series. Despite the popularity of its original content, Apple TV+ reportedly remains a financial loss for the company, dependent on Cook’s continued support.
The report indicates that since launching, Apple has faced annual losses exceeding $1 billion, as it continues to invest heavily in content production in an attempt to compete with industry giants like Netflix. While the service has about 45 million users, it is unclear how many are paying subscribers, and how many access the service through bundles like Comcast’s StreamSaver.
Unique in its approach, Apple TV+ offers a catalog almost solely comprising original productions from Apple itself, distinguishing it from services like Disney+ and Warner Bros. Discovery’s MAX, which include licensed movies and television shows.
The report from The Information underscores that only a few companies have the financial strength to genuinely compete with Netflix in the fiercely competitive streaming industry. Companies find it challenging to match investments like Amazon’s $1 billion spent on the Lord of the Rings series The Rings of Power, which ended up receiving mixed reviews.
For Apple, the financial commitment to Apple TV+ is a relatively minor expenditure in comparison to its nearly $100 billion in annual profits from iPhone sales and transactions through third-party iOS apps. In light of rising production costs and disappointing box-office results from films such as the fourth Captain America installment, Disney has been identified as a potential acquisition target for Apple, which could leverage Disney’s extensive library and franchises.
As economic pressures from the cost-of-living crisis impact consumer behavior, more individuals are reluctant to invest in expensive movie tickets or additional streaming services. Ampere Analysis, based in the UK, anticipates that more viewers will turn to super bundles, which offer a larger selection of TV and movie content at a reduced price. These bundles include StreamSaver, which features Apple TV+, Netflix, and Peacock, and another package that combines Disney+, Hulu, and Max.
This story was originally reported on Fortune.com.
