Why Is Apple Losing Billions on Streaming? The Answer Might Surprise You.

Benedicta Philemon

26 Mar 2025 — 2 min read

Apple TV+ is projected to lose $1-2 billion annually, yet the tech giant continues to invest $5+ billion per year in premium content. With 45 million subscribers and capturing less than 1% of monthly TV viewership, Apple TV+ appears to be trailing behind streaming titans like Netflix (260M+ subscribers) and Amazon Prime Video (200M+ subscribers). But unlike its competitors, Apple’s strategy isn’t built around dominating the streaming market—it’s about something bigger: locking customers deeper into the Apple ecosystem.

The ecosystem advantage as a strategic play

Apple is not only chasing subscription revenue alone; it is also playing a long-term game where streaming serves as a loss leader to drive its broader business. With $93.7 billion in annual hardware profits, Apple knows that keeping users engaged in its ecosystem translates into sustained loyalty and higher lifetime value. Over the next decade, Apple expects to absorb $15-20 billion in losses, but these losses are not just expenditures; they are strategic investments fueling continued customer retention.

How Apple’s Strategy differs from Netflix & Amazon

Netflix has built a business that relies entirely on content monetization, investing $17 billion annually in content and shifting towards an ad-supported model to boost profitability. Amazon, on the other hand, bundles Prime Video within its 200M+ Prime membership program, ensuring that streaming serves as a value add for its broader e-commerce empire. Apple’s approach, however, is unique. Instead of optimizing for direct content revenue, it integrates Apple TV+ into its premium ecosystem of devices and services. By offering free trials with hardware purchases and keeping its library ad-free, Apple ensures that customers have another reason to stay within its walled garden—leading to continued sales of iPhones, iPads, MacBooks, and services like iCloud and Apple Music.

What CEOs, founders, and tech leaders can learn

Apple’s playbook offers valuable insights for businesses in any industry. Not all products need to be profit centers; some serve as gateways to higher-margin offerings. Apple TV+ is not just a streaming service—it’s an engagement tool for Apple’s hardware empire. Also, instead of chasing immediate returns, Apple is prioritizing customer lifetime value (LTV) over short-term content profitability. Business leaders should consider how loss-leading products can fuel long-term growth. Apple’s success is built on interconnected products and services. Whether you’re in SaaS, retail, or fintech, the key is creating seamless experiences that encourage customer retention and cross-product adoption.

Is streaming the product or the hook?

For Netflix and Amazon, streaming is the product. For Apple, streaming is the hook — a tool to drive engagement across its $3 trillion ecosystem. The question for business leaders is clear: How can you turn your products into retention drivers that fuel a larger business strategy?

Apple TV+ may not be winning the streaming war, but it’s winning something much bigger.

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