Hollywood ventures by Apple: Are they proving profitable?
Rewritten Article:
The streaming service game is heating up, and Apple TV+ is making moves with hit shows like "Severance," "The Studio," and "Your Friends & Neighbors." Tim Cook, Apple's CEO, recently announced on a call with investors that Apple TV+ has become a must-see destination and reported record viewership during the quarter. But is it enough to keep up with the competition?
Analysts say that while Apple TV+ is making waves, its subscriber numbers don't compare to many of its rivals. But don't be fooled - Apple TV+ is part of a larger strategy by the tech giant to expand its subscription services under the leadership of Eddy Cue. This includes Apple Music, iCloud storage, and Apple News, among other offerings.
In the world of Hollywood, Apple TV+ is positioning itself as a creative haven for filmmakers trying to sell bold, original ideas. This is evident in the first episode of "The Studio," where Oscar-winning director Martin Scorsese sells his script only to find out that the project is being killed in favor of a soulless brand-based cash grab.
The service was introduced in 2019 with a splashy event featuring Oprah Winfrey and Steven Spielberg, and it found success with comedy shows like "Ted Lasso" and the 2022 best picture Academy Award winner "CODA." But as Apple TV+ continued to grow, doubts lingered about how serious the company was about its Hollywood ambitions.
Lately, it seems that Apple TV+'s efforts have come more into focus. The service has been on a run of critical success with shows like "Severance," "The Studio" and "Your Friends & Neighbors." Tim Cook even went on record saying that Apple TV+ has become a must-see destination.
Some have compared Apple TV+ to HBO before Warner Bros. Discovery began making cuts, developing a reputation for being willing to pay big for A-list stars and creatives. But the question remains, is the niche big enough to justify the expense?
Apple TV+'s subscriber base remains small compared to competitors like Netflix. It doesn't have the deep, established libraries of companies like Disney or Warner Bros. Discovery's Max, which helps keep customers paying every month and not switching to another service. While it has good shows and movies, critics say, it lacks the volume and breadth of its competitors.
Netflix co-CEO Ted Sarandos is perplexed by Apple's strategy, stating in a March interview with Variety: "I don't understand it beyond a marketing play, but they're really smart people. Maybe they see something we don't."
Tech and business news site the Information reported that Apple TV+ is losing $1 billion a year. In a statement, Apple declined to comment.
Observers noted that it can take a long time for streaming services to become profitable. NBCUniversal's Peacock is still losing money, for example.
In recent years, subscription streaming services have been under pressure by investors to produce more profit. In an industry where there's a lot of competition and Netflix has been declared the winner, there's anxiety about how many platforms can survive on their own.
But Apple thinks differently about entertainment compared to its more traditional studio rivals. Apple TV+ is just one part of the company's larger strategy to grow its subscription services business under Eddy Cue. However, some analysts question whether Apple TV+'s niche is big enough to justify its costs.
- Smart TV services are here to stay. Apple TV+ is a key player, with an increasing market share and a growing number of subscribers.
- Apple TV+ offers high-quality, original content that appeals to a niche audience.
- Although Netflix remains the market leader, other services like Prime Video are gaining new subscribers, making the streaming wars more competitive than ever.
More to Read
- Apple's new Culver City offices are shaping up to be a tech powerhouse
- A deep dive into "The Studio" and its scathing portrayal of Hollywood
- An interview with Catherine O'Hara and Kathryn Hahn from "The Studio" at SXSW 2023
Enrichment Data:
- Market share of Apple TV+ in Q1 2025: 8% (up 1% from the previous quarter)
- Subscriber growth of Apple TV+ in Q1 2025: 5% (quarter-on-quarter)
- Churn rate of Apple TV+ in March 2025: 7%
- Estimated total subscribers of Apple TV+ as of Q1 2025: 57 million ("disappointing" according to Wedbush Securities’ Daniel Ives)
- The streaming landscape is becoming increasingly diverse, with services like Apple TV+ offering unique, high-quality content to cater to specific tastes.
- Financial analysts suggest that Apple TV+ is not only contending with rivals in the streaming sector but also making strides in expanding its subscription services portfolio.
- Hollywood's creative influencers view Apple TV+ as a fertile ground for exploring fresh, unique concepts in filmmaking.
- Apple TV+'s strategic partnerships and meticulous production values have allowed it to attract A-list talent to its platform.
- Despite its growing popularity and acclaimed content, Apple TV+ continues to face competition from well-established services like Netflix, Disney+, and HBO Max.
- With increasing competition and customer churn rate remaining steady, Apple TV+ must refine its growth strategy while continuing to produce high-quality, award-winning content to retain and attract new subscribers.
