“Apple CEO Tim Cook introducing Apple TV Plus. / Provided by Apple”
Apple is reportedly facing an annual loss in the range of 1 trillion won due to its online video service (OTT), Apple TV+. On the 22nd (local time), IT media outlet The Information reported, “Among Apple’s content portfolio, Apple TV+ is the only service that is not profitable,” and “Apple is incurring a loss of 1 billion USD (approximately 1.4 trillion won) annually.”
According to The Information, Apple TV+ has 45 million subscribers, but this has not translated into profitability. Since the launch of Apple TV+ in 2019, Apple has maintained a closed operational policy.
Unlike other OTT platforms that have enriched their libraries with both original and licensed content, Apple has focused on creating original content produced by Apple Studios. Some of this original content has been recognized for its artistic merit, earning nominations at the Academy Awards.
In response to criticism about the investment results being a “costly hobby” during an earnings conference call, Apple CEO Tim Cook argued, “Apple TV+ has already proven its reason for existence to fans worldwide.”
However, this policy did not resonate with consumers. Despite investing an enormous amount of nearly 5 billion USD annually in original content, which highlighted its quality, its market share remained minimal. Industry surveys at the end of last year suggested that while Netflix had 301.63 million subscribers, Apple TV+ had only 45 million.
Ultimately, Apple is shifting its policy to consider the profitability of Apple TV+. The Information analyzed that Apple reduced its investment in Apple TV+ original content from 5 billion USD to 4.5 billion USD annually. Last year, Apple also showed signs of policy change by adding licensed films to its library in some countries.
Since November last year, Apple began supplying Apple TV+ original content to other platforms and OTT services. In December, domestic OTT service Tving started providing some content to premium subscribers via the Apple TV+ brand channel, marking a departure from platform exclusivity. Previously, Apple TV+ was only accessible on Apple devices. However, on the 12th of this month, for the first time since its launch six years ago, an Android application was released.