Apple Faces Annual Loss of $1 Billion on Streaming Service Competition Intensifies

Apple is reportedly losing £1 billion annually on its streaming service, Apple TV+, as it struggles to compete with industry giants like Netflix, Amazon Prime Video, and Disney+. Despite significant investment in original content, the platform is failing to attract enough subscribers to rival its competitors’ dominance.

Apple TV+ was launched in 2019 with ambitious goals, including a reported £5 billion annual budget for content creation. However, spending was reduced by around £400 million last year. As of 2024, the platform had only 45 million subscribers, a figure dwarfed by Netflix’s 302 million. Market data indicates that Apple TV+ holds a 7.8 per cent market share compared to Netflix’s 33.1 per cent and Amazon Prime’s 11.6 per cent.

Key original productions such as Ted Lasso, The Morning Show, Shrinking, and Severance have earned Apple TV+ over 2,500 nominations and 538 wins, according to CEO Tim Cook. Despite this recognition, the platform lags significantly in subscriber growth compared to its rivals, highlighting the challenge Apple faces in the highly competitive streaming market.

Apple TV+ has sought to boost its appeal through bundled offers with other services. For example, a Comcast bundle combines Apple TV+, Netflix, and Peacock for $15 per month. Standalone, Apple TV+ costs £9.99 per month in the UK. Despite creative packages and award-winning programming, market conditions and subscriber numbers suggest Apple is unlikely to recoup its streaming investments soon.

Adding to its challenges, Apple’s core business areas, including iPhone sales, have been affected by weak demand in key markets like China. For the first quarter, smartphone revenue dropped by 0.8 per cent to £69.1 billion, though overall revenue rose by 3.9 per cent to £124.3 billion. Despite these financial pressures, Apple maintains its position as one of the most valuable companies globally, with a market valuation of £3.25 trillion.

The company initially gained momentum under the leadership of Steve Jobs, who rescued it from near collapse in the 1990s. While Apple has since achieved unparalleled success, its foray into streaming proves that even tech giants face hurdles in expanding into new markets. Investors may now question whether the strategy to compete with established players like Netflix and Amazon will pay off.