One Reason Apple Loses $1 Billion Per Year on Apple TV+

Apple TV+ probably creates better Apple customers.

An article in The Information last week reported Apple loses $1 billion per year on the Apple TV+ business. Sure, Apple can afford it, with revenues of close to $400 billion and profits of close to $100 billion per year. But, why would they want to afford it?

Apple is not known for vanity projects like movie production. Apple does have its share of highly speculative projects with significant investment - think automobiles, Vision Pro “spatial computers”, and HomePod, among others. They may generate returns, eventually.

So, what is this business model? It appears Apple TV+ subscribers are more likely to own more Apple products. Based on data for the twelve months ending December 2024, one-third of customers that purchased a new device from Apple in the three months preceding our surveys have Apple TV+. Those Apple TV+ users own more Apple devices. We look at the three principal products, iPhone, iPad, and Mac computers. Half of Apple TV+ users own all three, compared to about one-third of Apple customers that don’t use Apple TV+ (Chart 1).