4 ms·

Apple losing over $1B a year on streaming service

36 points by mgh2 2y ago

beejiu 2y ago
People don't want to pay a monthly subscription to watch 5 good shows (all drama, btw). Apple TV lacks breadth for the average consumer, at least relative to the competition.
- tra3 2y ago
  It’s so funny, when Netflix got going streaming it was a revolution. Getting away from paying tons of cash to cable providers. Now we are right back to where we are started. I signed up to sportsnet to watch nhl games, but guess what? Amazon prime has exclusive rights to some games! So I gotta have two subscriptions. Truly piracy is easier. Enshitification intensifies.
  - dogma1138 2y ago
    Netflix was unique it basically was a repeat of the early days of cable. When cable came about it had access to a massive library of content that people didn’t know how or well couldn’t effectively monetize due to the fact that you had only limited number of channels and thus didn’t knew what it was actually worth. You used to have 100’s of channels on basic cable that all now could broadcast 50+ years of TV and film content. Cable broke through the bandwidth limit which at the time was basically the number of channels available. Instead of the 20 or so channels that were possible on broadcast TV you had 100’s. Once people realized what their library was worth and how relatively cheap it was to setup your own cable channel things turned and we got premium cable. Streaming was the same it basically took out the time multiplexing out of the equation completely. However as just like cable it was an unproven business model especially when Netflix came to the scene people weren’t sure if it was worth the investment so Netflix had effectively a monopoly on a vast library of content which it licensed for pennies on the dollar. Once it proved that the model is viable all the content holders jumped on the bandwagon. We will never have another Netflix moment as the most likely next big jump in entertainment is most likely bespoke or at least viewer tailored AI generated content.
- kristianp 2y ago
  Don't forget about binging. You can subscribe for a month and watch all the episodes of a show in a few weeks/days. If it's one show I might be tempted to torrent it, but being able to watch on whatever device I have near me is very useful.
- frizlab 2y ago
  Non-drama good shows (IMHO) from Apple TV+ include but are not limited to Shrinking, Ted Lasso, Mythic Quest, Trying, Schmigadoon (this one is weird though). Anyways YMMV as usual.
alephnerd 2y ago
Unlike other streaming networks, Apple TV has a lot of backing from leadership to remain prestige and passion driven, as it's a good loss leader and brand maker for Apple. For example, look at the zeitgeist Ted Lasso, Severance, Tehran, and Pachinko have all been able to leverage.
- mpalmer 2y ago
  And Apple could lose a billion a year for decades if it wanted to.
  - alephnerd 2y ago
    Yep! They probably don't want to and most likely have a plan on better monetizing Apple TV, in the short term the brand making aspect is well worth it for a brand like Apple. I wouldn't be surprised if Apple TV ends up acquiring a prestige production house at some point, or uses Apple TV to enhance other marketing partnerships with adjacent brands. Their foray into sports with MLS is a good example
    - nxobject 2y ago
      > I wouldn't be surprised if Apple TV ends up acquiring a prestige production house at some point I agree, AND I’m similarly asking why I agree myself: there were always persistent rumors under Steve that Apple would one day acquire Disney, they were always fun to think about in a “what if” way, _and_ it seems hilariously impractical in retrospect.
      - alephnerd 2y ago
        Alternatively - and now that I'm thinking about it - I think Apple TV might adopt the A/24 model of purchasing individual movies and shows that they like, and marketing it like crazy. In fact, that does seem to be Apple TV's model already. For example, Ted Lasso, Mythic Quest, Pachinko, Foundation, Silo, Severance, The Studio, and For All Mankind are all produced by entirely different production houses but licensing for them was acquired by Apple.
detourdog 2y ago
Apple famously does not track profits by division but profits overall-
nxobject 2y ago
Steve Jobs had Pixar and iTunes; Tim Cook had Apple TV+, I guess. Apple couldn’t possibly be Apple without some play at cultural significance. I know old Stevenotes in the heyday of iTunes would make a habit of bringing in musicians to show they could - John Mayer etc. - and I guess Ben Stiller and Adam Scott may be up next.
thrill 2y ago
Worth it.
t-writescode 2y ago
Maybe leadership at Apple want to make good TV and they’re using some of Apple’s incredible wealth to bootstrap it or passion project it?
- nxobject 2y ago
  Consistent with that - Steve calling the original Apple TV a “hobby”. This was during the days of Front Row, when Apple bundled remotes with iMacs and they had their own “media console” like software.
- mgh2 2y ago
  Another source: spend 4.5B, lose 1, 45M subscribers, engage 3.5hrs/day - invest if AI is overhyped https://www.youtube.com/watch?v=Ht5GlAaoOzM https://www.youtube.com/watch?v=Ht5GlAaoOzM
  - ksec 2y ago
    I keep thinking that number would means Apple get $3.5B back. At $120 per year, that is 30 million paid subscribers. But we also know a lot of Apple TV+ subscribers are from gift, Mobile network give away etc. I would assume a lot of those are coming from Apple's Marketing Budget, which is basically shifting it within Apple. I would not be surprised if it was closer to $2B if not more on lost.
- mvdtnz 2y ago
  Then explain the second season of Severance.
  - deleted 2y ago
    [deleted]
glass1122 2y ago
[dead]
ein0p 2y ago
Currently Apple has 54 billion in cash and cash equivalents (down $100B since 2023 in dividends, stock buybacks, and capex). They can keep this going for a while.
tiffanyh 2y ago
Netflix lost money its first 13-years (in aggregate). And wasn’t really until year 18-year, that the money it made became meaningful. When you don’t have a catalog, creating content is expensive. https://www.statista.com/statistics/272561/netflix-net-income/ https://www.statista.com/statistics/272561/netflix-net-incom...
TeckPerspecc 2y ago
[flagged]
jauntywundrkind 2y ago
Honestly it might be a bargain, simply for maintaining a certain brand image. Apple has a huge pile of cash, and with respect this is content very very very few other companies are willing to or can afford to make. It buys Apple a kind of mind share that will last & endure & keep paying our, will maintain the Apple name, in a way that nothing else Apple could possibly do would.
MagicMoonlight 2y ago
How can you spend so much when it only has 10 shows and 10 movies? They struggle to even fill the top 10 list because they often don’t have enough shows or movies.
- frizlab 2y ago
  That’s… not true? “As of June 2023, Apple TV+ has nearly 200 movies and TV shows in its catalog.” Not a lot, but still not 10…

36 points by mgh2 2y ago

People don't want to pay a monthly subscription to watch 5 good shows (all drama, btw). Apple TV lacks breadth for the average consumer, at least relative to the competition.

tra3 2y ago
It’s so funny, when Netflix got going streaming it was a revolution. Getting away from paying tons of cash to cable providers. Now we are right back to where we are started. I signed up to sportsnet to watch nhl games, but guess what? Amazon prime has exclusive rights to some games! So I gotta have two subscriptions. Truly piracy is easier. Enshitification intensifies.
- dogma1138 2y ago
  Netflix was unique it basically was a repeat of the early days of cable. When cable came about it had access to a massive library of content that people didn’t know how or well couldn’t effectively monetize due to the fact that you had only limited number of channels and thus didn’t knew what it was actually worth. You used to have 100’s of channels on basic cable that all now could broadcast 50+ years of TV and film content. Cable broke through the bandwidth limit which at the time was basically the number of channels available. Instead of the 20 or so channels that were possible on broadcast TV you had 100’s. Once people realized what their library was worth and how relatively cheap it was to setup your own cable channel things turned and we got premium cable. Streaming was the same it basically took out the time multiplexing out of the equation completely. However as just like cable it was an unproven business model especially when Netflix came to the scene people weren’t sure if it was worth the investment so Netflix had effectively a monopoly on a vast library of content which it licensed for pennies on the dollar. Once it proved that the model is viable all the content holders jumped on the bandwagon. We will never have another Netflix moment as the most likely next big jump in entertainment is most likely bespoke or at least viewer tailored AI generated content.
kristianp 2y ago
Don't forget about binging. You can subscribe for a month and watch all the episodes of a show in a few weeks/days. If it's one show I might be tempted to torrent it, but being able to watch on whatever device I have near me is very useful.
frizlab 2y ago
Non-drama good shows (IMHO) from Apple TV+ include but are not limited to Shrinking, Ted Lasso, Mythic Quest, Trying, Schmigadoon (this one is weird though). Anyways YMMV as usual.

alephnerd 2y ago

Unlike other streaming networks, Apple TV has a lot of backing from leadership to remain prestige and passion driven, as it's a good loss leader and brand maker for Apple. For example, look at the zeitgeist Ted Lasso, Severance, Tehran, and Pachinko have all been able to leverage.

mpalmer 2y ago
And Apple could lose a billion a year for decades if it wanted to.
- alephnerd 2y ago
  Yep! They probably don't want to and most likely have a plan on better monetizing Apple TV, in the short term the brand making aspect is well worth it for a brand like Apple. I wouldn't be surprised if Apple TV ends up acquiring a prestige production house at some point, or uses Apple TV to enhance other marketing partnerships with adjacent brands. Their foray into sports with MLS is a good example
  - nxobject 2y ago
    > I wouldn't be surprised if Apple TV ends up acquiring a prestige production house at some point I agree, AND I’m similarly asking why I agree myself: there were always persistent rumors under Steve that Apple would one day acquire Disney, they were always fun to think about in a “what if” way, _and_ it seems hilariously impractical in retrospect.
    - alephnerd 2y ago
      Alternatively - and now that I'm thinking about it - I think Apple TV might adopt the A/24 model of purchasing individual movies and shows that they like, and marketing it like crazy. In fact, that does seem to be Apple TV's model already. For example, Ted Lasso, Mythic Quest, Pachinko, Foundation, Silo, Severance, The Studio, and For All Mankind are all produced by entirely different production houses but licensing for them was acquired by Apple.

detourdog 2y ago

Apple famously does not track profits by division but profits overall-

nxobject 2y ago

Steve Jobs had Pixar and iTunes; Tim Cook had Apple TV+, I guess. Apple couldn’t possibly be Apple without some play at cultural significance. I know old Stevenotes in the heyday of iTunes would make a habit of bringing in musicians to show they could - John Mayer etc. - and I guess Ben Stiller and Adam Scott may be up next.

thrill 2y ago

Worth it.

t-writescode 2y ago

Maybe leadership at Apple want to make good TV and they’re using some of Apple’s incredible wealth to bootstrap it or passion project it?

nxobject 2y ago
Consistent with that - Steve calling the original Apple TV a “hobby”. This was during the days of Front Row, when Apple bundled remotes with iMacs and they had their own “media console” like software.
mgh2 2y ago
Another source: spend 4.5B, lose 1, 45M subscribers, engage 3.5hrs/day - invest if AI is overhyped https://www.youtube.com/watch?v=Ht5GlAaoOzM https://www.youtube.com/watch?v=Ht5GlAaoOzM
- ksec 2y ago
  I keep thinking that number would means Apple get $3.5B back. At $120 per year, that is 30 million paid subscribers. But we also know a lot of Apple TV+ subscribers are from gift, Mobile network give away etc. I would assume a lot of those are coming from Apple's Marketing Budget, which is basically shifting it within Apple. I would not be surprised if it was closer to $2B if not more on lost.
mvdtnz 2y ago
Then explain the second season of Severance.
- deleted 2y ago
  [deleted]

glass1122 2y ago

[dead]

ein0p 2y ago

Currently Apple has 54 billion in cash and cash equivalents (down $100B since 2023 in dividends, stock buybacks, and capex). They can keep this going for a while.

tiffanyh 2y ago

Netflix lost money its first 13-years (in aggregate). And wasn’t really until year 18-year, that the money it made became meaningful. When you don’t have a catalog, creating content is expensive. https://www.statista.com/statistics/272561/netflix-net-income/ https://www.statista.com/statistics/272561/netflix-net-incom...

TeckPerspecc 2y ago

[flagged]

jauntywundrkind 2y ago

Honestly it might be a bargain, simply for maintaining a certain brand image. Apple has a huge pile of cash, and with respect this is content very very very few other companies are willing to or can afford to make. It buys Apple a kind of mind share that will last & endure & keep paying our, will maintain the Apple name, in a way that nothing else Apple could possibly do would.

MagicMoonlight 2y ago

How can you spend so much when it only has 10 shows and 10 movies? They struggle to even fill the top 10 list because they often don’t have enough shows or movies.

frizlab 2y ago
That’s… not true? “As of June 2023, Apple TV+ has nearly 200 movies and TV shows in its catalog.” Not a lot, but still not 10…