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Despite hit shows like Ted Lasso and Severance, and even a Best Picture Oscar for CODA in 2022, Apple’s video-streaming service is apparently still bleeding money.
The Information reported Thursday, citing two unnamed sources, that Apple is losing more than $1 billion annually on its streaming platform.
Apple did not immediately respond to a request for comment from Quartz.
Since launching Apple TV+ (AAPL-0.91%) in 2019, the company has spent more than $5 billion a year on content, one of the sources said. But last year, Apple cut that budget by about $500 million as CEO Tim Cook and other executives imposed stricter cost controls.
Even as its subscriber base grew to roughly 45 million last year, Apple TV+ remains one of the least-watched streaming services. By comparison, Netflix (NFLX-0.82%) has more than 300 million subscribers, while Disney+ (DIS-1.55%) boasts 126 million. And in February, Apple TV+ failed to crack Nielsen’s list of the top 10 most-watched streaming platforms in the U.S.
For context, it was only last year when Disney+ and Warner Bros. Discovery’s Max joined Netflix in turning a profit.
It seems like initial losses were always the plan for Apple’s service, as it focused on more expensive and prestige content. A former Apple TV+ employee who reviewed the company’s business plan said it projected losses of $15 billion to $20 billion in its first decade. This follows on reporting from Bloomberg last year that said Apple surpassed $20 billion in content spending during the platform’s first five years.
Still, with an overall net income of $93.7 billion last year, Apple can afford to take a hit for now.