Apple reportedly wants to reduce the amount of money it pours into its Apple TV+ streaming service. And the company also wants to get more bang for its buck.
The result likely will be fewer Apple TV+ shows, and decreased spending on marquee projects. Plus, underperforming series can expect to get canceled more quickly.
Apple TV+ costs too much to produce
Apple TV+ launched almost five years ago, and there’ve been questions from the start over whether it makes financial sense for a computer-maker to produce films and TV series. By one measure, Apple TV+ is doing well: The streaming service recently earned 72 Emmy nominations, its most ever. Only three of its rivals earned more.
But Apple is supposedly starting the question whether it’s paying too much for what it’s getting.
“Apple services boss Eddy Cue has been having regular meetings with studio chiefs Zack Van Amburg and Jamie Erlicht to go over budgets, pushing them to exert more control over spending on projects,” reports Bloomberg.
Total spending so far on Apple TV+ is more than $20 billion. It sank $500 million into Killers of the Flower Moon, Napoleon and Argylle alone, and only one of those recent films became even a modest success, according to Bloomberg.
Even shows that become actual hits don’t necessarily prove financially successful. Severance is a beloved sci-fi series, but problems behind the scenes mean that it allegedly cost $20 million per episode. Apple is paying the cast of Emmy-nominated The Morning Show $50 million to do the upcoming season four.
Cutting the budget at Apple TV+
But the deluge of cash is reportedly slowing. “Management is trying to pay less up front for shows,” said Bloomberg. “It’s forcing third-party studios to shoulder more of the burden when productions go over budget.” Apple execs also supposedly passed on series it might have picked up in the past.
Apple TV+ temporarily halted filming of sci-fi epic Foundation‘s third season earlier this year as the studio looked for ways to cut costs. And series that aren’t finding audiences are getting nixed. In the early days of Apple TV+, every series got to at least season three. Now, less than a quarter of its series do. In recent months, the service canceled Constellation (one season), The Big Door Prize (two seasons), Schmigadoon! (two seasons), Still Up (one season) and Make or Break (two seasons).
What’s a ‘success’?
Whether Apple TV+ is a success depends a lot on who you ask. Analysts at JustWatch say the streaming service has grown to capture 9% of the U.S. market. On the other hand, Nielsen says Apple owns only a tiny share of the streaming market. But that ratings service completely ignores all viewers on Mac, iPhone and iPad (or any PC, phone or tablet), which means it’s likely missing a significant chunk of Apple’s audience.
Apple employees told Bloomberg that their company considers more than ratings.
“Outside criticism and analysis fail to capture the metrics that matter to Apple,” said Bloomberg. “Apple invests in entertainment to sell more consumer devices – not to make money in Hollywood.”
In other words, if your love of Severance and Silo makes you more likely to buy an iPhone, then Apple TV+ is a success.
