Apple cuts TV+ spending following $20B content investment

Apple is making strategic shifts in its approach to content spending for its TV+ streaming service, as reported by Bloomberg. The tech giant has reportedly invested over $20 billion in producing original TV shows and movies, despite facing challenges in attracting a significant viewership.

Eddy Cue, Apple’s services chief, has initiated discussions with TV+ executives Zack Van Amburg and Jamie Erlicht to adopt a more controlled expenditure strategy. Amburg and Erlicht have been working to dispel the perception that Apple is the top spender in the industry, highlighting that while Netflix leads in overall content spending, Apple focuses on investing heavily in select titles.

One example of Apple’s substantial investment is the approximately $700 million spent on three theatrical films in 2023, including “Killers of the Flower Moon,” “Napoleon,” and “Argylle.” While “Killers of the Flower Moon” achieved critical acclaim and success, the other two films received mixed reviews and limited box office success, reflecting the challenges Apple faces in content selection.

Despite pouring billions into original programming with critical acclaim and award nominations, Apple TV+ accounts for only 0.2% of TV viewing in the U.S., according to Nielsen data. In comparison, Netflix reportedly garners more daily viewership than Apple TV+ accumulates in a month, underscoring the competitive landscape in the streaming industry.

Apple’s reluctance to disclose TV+ subscriber data makes it challenging to gauge the service’s performance accurately. In contrast, Netflix recently announced surpassing 277 million paying subscribers, surpassing market expectations. While Netflix’s innovative subscription models have fueled growth, Apple TV+ has faced slower subscriber growth rates.

Looking ahead, Apple plans to revamp its TV+ strategy by collaborating with partner studios to share financial responsibilities and discontinuing underperforming shows. Additionally, Apple is considering licensing content, a departure from its original productions-only approach since TV+’s launch in 2019, signaling a potential shift in content acquisition.

Notably, Apple is eyeing additional seasons of the acclaimed series “Severance,” despite exceeding budget expectations. The series exemplifies Apple TV+’s balancing act between critical success and financial constraints, with each episode reportedly costing over $20 million.

As Apple navigates cost-cutting measures for TV+, the industry awaits the outcomes of its strategic adjustments and their impact on the streaming service’s future direction.