Apple is reportedly facing annual losses in the 1 trillion won range due to its online video service (OTT) "Apple TV+".
On the 22nd (local time), IT media outlet The Information reported that "Apple TV+ is the only service in Apple's content portfolio that is not profitable," and noted that "Apple is experiencing losses of $1 billion (about 1.4 trillion won) annually."
According to The Information, Apple TV+ has 45 million subscribers, but this has not translated into revenue. Apple has maintained a closed operating policy since the launch of Apple TV+ in 2019.
Unlike other OTT services that have enriched their libraries with both original content and externally licensed content, Apple Studios has focused on creating original content. Apple TV+'s original content has been recognized for its quality, even receiving nominations for the Academy Awards.
In response, Tim Cook, Apple's Chief Executive Officer (CEO), defended the investment results amid criticisms that it was a "costly hobby" during the earnings call, stating that "Apple TV+ has already proven its purpose to fans worldwide."
However, this policy has not resonated with consumers. Although the quality of the original content was remarkable due to the massive investment of nearly $5 billion annually, the market share was minimal. According to investigations, as of late last year, Netflix had 306.3 million subscribers, while Apple TV+ had only 45 million subscribers.
Ultimately, Apple is also changing its policy to consider the profitability of Apple TV+. The Information analyzed that Apple has reduced its annual investment in Apple TV+ original content from $5 billion to $4.5 billion. Last year, there was a trend of policy change, including adding externally licensed films to its library in some countries.
Additionally, since November last year, Apple TV+ has also supplied its original content to other media and OTT services. The domestic OTT service Tving has been providing some content to premium subscribers through the Apple TV+ brand since December last year. The platform's closed nature has also been abandoned. Until now, Apple TV+ was only available on Apple devices, but on the 12th, it released its first Android application (app) after six years since its launch.