By coinnews 
00:00 Speaker A
Apple is reportedly losing more than $1 billion a year on its streaming service Apple TV Plus. That’s according to the information. Shares right now still holding on to fractional gains, they’re up by about half a percent. I mean, you’re you’re tracking this entertainment landscape. This is a big deal to be losing a billion dollars on something that you’re putting out there to try and make the ecosystem that much more sticky for all of the install base.
00:29 Speaker B
The fact that they even have a billion dollars to lose on this, though, I think is a sign that we see a lot of these tech giants entering the entertainment space, not just Apple, but also Amazon. And they just have the the capital, they have the money, they can try, they can experiment with things in a way that some of those more pure play streaming platforms like your Netflix, for example, they really can’t. But it is coming at a time where Apple stock, you know, it’s been sort of reeling over the past few weeks amid this tech sell-off. It’s shaved nearly $700 billion from its market cap since its record close. And then you have this announcement that it’s bleeding money on the streaming side. And really, that was a big play to keep people within the Apple ecosystem when you think about the services side of the company. But, you know, when they first launched Apple TV Plus in 2019, they spent around $6 billion when it comes to, you know, grabbing some of the top producers, the talent.
01:58 Speaker A
Right.
01:59 Speaker B
They had a very limited library and they continue to have a limited library. Shows like Severance, though, Ted Lasso, people love those shows.
02:14 Speaker A
Mhm.
02:14 Speaker B
But I don’t know if their library is deep enough to really keep users on that platform and to that point, Antenna sent me some data that showed for the month of February, Apple had some of the highest churn levels compared to those other big streaming platforms out there you’re seeing on your screen. 7% of users churned out of the service during February. You compare that to Max and Hulu, the weighted average that compares all of the streaming services was 5%. So above that weighted average and then you look at a Netflix, only 2% churn. And and if if you think about the the number of subscribers Netflix has, you know, over 300 million subs. There’s estimates that Apple TV Plus has around 40 million, they don’t break that out specifically. So it’s sort of apples to oranges in a lot of ways, but as we’re entering this new era of the streaming wars, you could say, there’s a lot of emphasis on maybe potential consolidation in the future. And if you have a service that isn’t profitable and users aren’t committed to staying with that service over the long term,
03:56 Speaker A
Mhm.
03:57 Speaker B
I wonder what that means for the future.
04:01 Speaker A
Well, it’s noteworthy as well because you think about the amount of accounts for Apple TV Plus that are actually subsidized on the first sign up because you’re either buying a device or you’re signing up for some other subscription, say it be a phone provider or something else that gives you the type of access.
04:23 Speaker B
And that was a big issue in the beginning because you a lot of folks got free Apple TV plus memberships for around a year. So it it sort of speaks to this point that maybe at a certain time they’re going to either have to raise the prices or maybe crack down on some of those promos.
04:57 Speaker A
Yeah.
04:58 Speaker B
But you know, you have to have the content to justify that.
05:02 Speaker A
That’s true. All right, Allie, thanks so much for breaking this down with us.
05:08 Speaker B
Of course.