Even Apple is Getting Tired of the Streaming Industry Treadmill

Apple may have just raised a white flag in a de-escalating Streaming War.

After years of spending big with little to show for it, the Big Tech giant is attempting to rein in costs at Apple TV+, per a Bloomberg report. Which once again begs the question: What is Apple doing in the streaming business in the first place?

Severance Package

Since launching Apple TV+ in late 2019, the Cupertino giant has spent more than $20 billion creating original movies and TV shows like “Severance” and “Ted Lasso,” often luring big-name Hollywood creatives in the process. But just because it can make this stuff doesn’t mean it should. The company doesn’t report subscriber figures or financials for the streamer, though its share of total TV viewership is so small it doesn’t even track on Nielsen’s Gauge metric — meaning it’s highly unlikely to be anywhere near profitable. Still, the company insists Apple TV+, like its other services, helps sell more devices, where the real money is made. It’s also possible the company is simply making industry inroads now in hopes of emerging as a dominant force if or when the legacy media companies all finally do collapse.

Netflix, on the other hand, is already on strong footing. Last week, the company reported its second-quarter earnings, in which it continued to find additional profitability, showing just exactly what it means to be a Streaming War victor — and how very different it is from Apple:

• Netflix reported almost 278 million global subscribers, up more than 16% year-over-year; meanwhile, some third-party estimates peg Apple TV+’s total subscriber base at just 25 million. Per a Bloomberg analysis, Netflix has more viewership in a single day than Apple TV+ has in an entire month.
• Netflix’s industry-best subscriber base fueled profits of $2.1 billion in the most recent quarter. That’s exceptional for a streamer, but less than one-tenth of Apple’s overall net income in its most recent quarter — making it no wonder streaming is such an afterthought.

But like Apple, and every other media company in the streaming biz, Netflix too is now trimming costs. Unlike the other firms, Netflix’s spending blitz helped it achieve the scale necessary to become highly profitable. 

Downstream: Amazon, the other Big Tech giant with a streaming service side-hustle, has similarly trimmed costs. However, on Monday, the e-commerce giant announced it had acquired the UK-based Bray Film Studios, scooping up valuable production space in the process. It’s part of another trend: In the second quarter, filming in Los Angeles decreased 12% year-over-year, according to an industry group, as the sun sets on Sunset Boulevard, too.