AppleTV+ loses $1 billion annually despite high subscriptions

AppleTV+ is facing significant financial challenges. The streaming service is reportedly losing about $1 billion a year. Last year, it had around 45 million subscribers, but this number is not enough to cover the high costs of producing content and marketing. Since its launch, AppleTV+ has spent $5 billion annually on content. However, CEO Tim Cook recently cut that budget by $500 million. In comparison, Netflix, which has around 302 million subscribers, plans to spend $18 billion on content this year. Apple can afford this loss, given its substantial worth of $4 trillion. The company anticipated that AppleTV+ might lose between $15 billion and $20 billion over its first decade. In the broader market, Disney+ has also struggled, seeing $11.4 billion in losses from 2020 to 2024. However, it reached profitability last year by introducing an ad-supported subscription model and raising prices. Unlike others, AppleTV+ has not yet used ads or increased its subscription prices since 2023. Meanwhile, the direct-to-consumer (DTC) brand trend among social media influencers may be fading. Influencers are struggling to attract consumers, who are overwhelmed by many products advertised online. Experts note that successful creator brands now often need partnerships with established retail stores to thrive. For example, beauty influencer Sarah Cheung's brand, Sacheu Beauty, raised $15 million in funding due to its presence in 5,000 retail stores. As influencer brands face hurdles, large companies like Unilever might seek to buy successful brands instead of starting new ones. Lastly, consulting firm Accenture is also facing challenges, particularly in government contracting. CEO Julie Sweet mentioned a slowdown in federal procurement that has negatively impacted sales and revenue. The company has begun layoffs within its federal services division as uncertainty grows.