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Comment by cbsmith | Hacker News Reader

This seems like an odd spin/reeks of PR and politics more than the reality. $20B spend is just fine if you have the revenue to justify it. They've just struggled with the revenue. Killers of the Flower Moon brought in $157 million at the box office --that's without streaming revenue, but I think even that would still be considered a failure... and some of the others have been huge stinkers.

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> Killers of the Flower Moon brought in $157 million at the box office

And how much did it cost to make that movie[0]?

"Budget $200–215 million

Box office $157 million "

[0]https://en.wikipedia.org/wiki/Killers_of_the_Flower_Moon_(fi...

Take with a pinch of salt because people like to pretend they don't make profit in order to not give some proportion of that profit to others.

Budget doesn't typically include marketing and associated overheads.

You typically would double it i.e. about $400 million needed to break even.

It would be considered a flop if it was just a theatrical release.

There are plenty of movies that were considered a flop at the box office, yet becomes a cult fave once it reached home video. I don't know how much money they are licensing to the streamers for, but I'm sure they're losing a lot of revenue as sales from physical media continues to plummet

AppleTV+ is a tiny business. It's nowhere near of generating enough revenue to cover a $20B hole in content production costs.

Yes, Apple generates LOTS of revenue overall, but that doesn't justify bleeding cash on a business line that hasn't produced material returns and has no significant positive trajectory in sight.

It's clear that Apple saw this as their Prime Video bet on their services strategy, but that hasn't worked out. Just look at AppleTV+ market share. It's hilariously miniscule.

Apple can afford to play the long game here though.

TV+ is nice value add on their bundled subscription package so may be driving more people to opt for that. I know it was a major factor in my decision and now I am playing Apple Arcade games and use Apple Music as my primary music service.

Operating TV+ as a halo or loss leader product to get people to try other services within the ecosystem could be a winning strategy for them. Also likely drives some hardware sales.

In what world does Apple need a “loss leader” to “drive hardware sales”.

They have some of the highest sales for high value products in the world.

What the goal of this was obviously to scoop $10 more cream a month from a % of those huge sales numbers.

“Loss Leader” theory makes no sense next to Apples financial and sales reality.

The hardware sales I was talking about is their streaming box which is in no way dominant but is really nice. Also we have pretty much reached peak iPhone or close to it. These subscription services help keep people in the ecosystem as it raises switching costs a bit.

The article is implying that TV+ is losing money. I don’t know that it is but my point is that for Apple it is likely still worth keeping and growing the service even if they are losing money on it at the moment.

Apple TV doesn’t matter, I’m sure iPad watching dwarfs ATV many hundreds if not thousands of times over.

AppleTV exists to make existing mega fans happy the ecosystem extends to their TV not to sell things.

It's a "tiny" part of a services business with a billion subscribers, that generates $20B of revenue in a quarter. $20B in production costs over 4.5 years works out to less than $5B/year in costs, against competitors like Netflix and Disney+ that are spending $20B a year.

I actually haven't seen any numbers on their current marketshare, but I'll give you that they aren't anywhere near their competitors. I don't think the problem is that they're spending too much money.

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