Apple’s (AAPL) streaming platform is losing a reported $1 billion a year as the company faces stiff competition and a more choosy consumer.
According to a report in the Information, Apple — which just shed around $700 billion as a result of Wall Street’s latest tech rout — has consistently spent over $5 billion annually to beef up its content slate since launching in 2019. That number, though, dramatically decreased to just about $500 million last year, the report said.
Apple did not immediately respond to Yahoo Finance’s request for comment.
At close: March 20 at 4:00:01 PM EDT
The update comes as many media giants have pulled back on spending in favor of profitability. More streaming platforms are cracking down on password sharers and have also bundled their respective offerings to prevent churn, or users abandoning their subscription plans.
Last year, Apple partnered with Netflix (NFLX) and Comcast’s Peacock (CMCSA) to launch a new bundle dubbed StreamSaver, exclusively available to Comcast broadband internet service customers for a cost of $15 a month. The monthly price of a solo Apple TV+ subscription currently sits at $9.99, although users can bundle Apple’s streaming service with other Apple-related products like Apple Arcade and Apple News+.
It’s unclear whether the recent bundles are helping.
According to data compiled by subscription analytics platform Antenna, Apple’s streaming service had the highest churn percentage of all the major streaming platforms, with the exclusion of Starz, with 7% of users churning out of the service during the month of February, compared to just 2% of users for Netflix and 4% of users for Disney+.
Notably, Apple has adopted a strategy different from that of its competitors. For one, its content slate is more limited, although it does boast highly acclaimed titles, including award-winning series like “Severance,” “Shrinking,” and “Ted Lasso.” It was also the first streaming platform to take home an Oscar win for best picture (thanks to “Coda”).
In total, Apple TV+ productions have earned more than 2,500 nominations and 538 wins, CEO Tim Cook said on the company’s January earnings call.
Apple TV+ does not release subscriber figures, although analysts have pegged total users at anywhere from 30 million to 40 million. Compared to Netflix, which boasts over 300 million subscribers thanks to its substantial global presence, Apple TV+ does not have high penetration in emerging markets, which have become increasingly important drivers as streaming hits peak saturation levels in the US and Canada.
