Apple is tightening the purse strings on its new Apple TV+ projects after seeing only limited success after investing more than $20 billion on its original programming, according to a new report from Bloomberg.
The newfound budgetary restraint on Apple’s part comes after the streaming service has struggled to gain a significant share of the streaming market, grabbing a mere 0.2% of TV viewership since its 2019 debut, failing to compete with other streaming services, such as Netflix, which currently has an 8% share of steaming viewers. This means Apple TV+ has fewer eyes on its content in an entire month than Netflix draws on a single viewing day.
This is despite investing a huge amount of money in original content, while also becoming a critical darling and receiving numerous award nominations.
In its five-year lifetime, Apple TV+ has had only four series land on Nielsen’s weekly top 10 list for original streaming shows. Admittedly, Apple TV+’s Ted Lasso was the most-viewed streaming show of 2023, however, that has done little to help Apple TV+, as it has a smaller share of top ten shows than any streaming service, excepting Paramount+.
Apple initially waded into the streaming, um, stream with an open pocketbook, throwing money at big-name talent and high-profile projects. Apple made deals with several well-known celebrities and actors, including Jennifer Aniston, Oprah Winfrey, and Steven Spielberg. Zack Van Amburg and Jamie Erlicht were installed to run the streaming services operations, and it quickly became known as a talent-friendly streamer that would happily pay whatever it took to create premium streaming content.
Apple spent lavishly on talent and content, spending over $500 million on films from Matthew Vaughn, Ridley Scott, Martin Scorsese, and other top-name talent. While the streaming service’s projects have garnered glowing reviews and several award nominations (Apple TV+ received 72 Emmy Awards nominations last week), the service has yet to see the viewership numbers that Apple was going for.
The company is said to now be following a new strategy, which includes tighter budgetary controls, and taking a more cautious approach to its spending on new projects. Apple is now paying less upfront for new series and movies, has been quick to cancel series that are underperforming, and delaying productions when costs can be managed better.
Apple recently delayed the production of its science fiction series Foundation, which was postponed due to fears of possible budget overruns related to delays connected to the 2023 strikes by actors and writers. The budget for the second season of Severance lept to $20 million per episode, thanks to delays caused by the pandemic, internal production conflicts, and various other expenses. Apple has told Severance producers to cut the budget for future episodes, as it works to gain financial equilibrium.
Apple has also become more picky about new projects, as it is now begging off of projects that just a few years ago it might have been eager to produce. The streaming service is looking to rid itself of its free-spending image, instead looking to bring more discipline to its spending.
While Apple TV+ is still investing heavily in proven high-profile projects, such as For All Mankind and The Morning Show, the streamer is working to tighten the purse strings on other projects. Salaries are a heavy contributor to the cost of the service’s expenses, as The Morning Show will spend more than $50 million on salaries alone. Series stars Reese Witherspoon and Jennifer Aniston will each deposit $2 million per episode for their work on the series this season.
Apple TV+’s budgetary tightening comes as major studios like Disney and Paramount are also cutting back on their streaming budgets, following huge losses.
Last week, we reported that Apple is conducting discussions about licensing more films from major Hollywood studios, in an effort to increase the appeal of its film library.