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Why Apple TV Plus Is a Hobby, Not a Serious Video Business

Ted Lasso on Apple TV Plus
(Image credit: Apple TV+)

Apple will kick off its annual Worldwide Developers Conference Monday with what’s expected to be a fast-moving, fact-stuffed opening session showcasing the company’s latest operating systems, new or newly cross-platformed apps, home-brewed CPUs, augmented-reality projects, and maybe a sneak peek at beefy new high-end laptops. 

The opening WWDC session, virtual again after more than a year of pandemic workarounds, will be followed with a “State of the Union” presentation later in the day, and then more than 200 more-detailed sessions throughout the week, along with one-on-one “lab” meetings, coding challenges, online Q&As, developer events and more. 

That’s a lot of talking, even if it is about the many, many products off the world’s most valuable tech company.

But what almost certainly won’t get talked about: Apple’s multi-billion-dollar investment in Apple TV Plus, the streaming service it launched 19 months ago, the first in a wave of high-profile subscription streaming services debuting ever since. 

Oh, there most likely will be another quick peek at some upcoming show, maybe TV Plus’ biggest hit, Golden Globe and SAG Award winner Ted Lasso, which has wrapped Season 2 production and is headed to a July debut. That would be nice.

But as for the service itself, if Apple’s half a dozen previous pandemic-era presentations are any guide, we likely won’t hear much of anything about TV Plus itself. And isn’t that kind of weird? 

Apple has lavished cash on TV Plus, especially for high-profile programming with high production values, including series such as The Morning Show, See, Lisey’s Story, Servant, The Mosquito Coast, Defending Jacob, and For All Mankind, and features such as Greyhound, Cherry and Palmer

The talent involved has included lots of big names, like Tom Hanks, Oprah Winfrey, Tom Holland, Jennifer Aniston, Steve Carrell, Jason Sudeikis, Jason Mamoa, Julianne Moore, Jason Theroux, Chris Evans, M. Night Shyamalan, Ron Moore and Oprah Winfrey. 

Names like those don’t come cheap. 

And you don’t have to be a big name to score in Cupertino. Apple dropped a record $26 million in January to snag Sundance Film Festival opener CODA. It’s a fine film, and its loving depiction of a deaf family and its only hearing member will play well within Apple TV Plus’ emerging family-friendly sensibility. But Apple’s payout dwarfed the festival’s previous record holder, the comedy Palm Springs, which Hulu bought just last year for a few cents over $17 million. 

At the same time, Apple has spent lavishly for shows and talent, it has avoided doing the one thing that can make Apple TV Plus sustainably competitive: spend lavishly for a library that both fill out the Apple TV Plus programming, and fuel remakes, spinoffs and even games and music. 

It did, of course, passed on the opportunity to buy MGM, which Amazon will buy for $8.45 billion. Apple could still scoop up Lionsgate or one of the other few nuggets on the market, but CEO Tim Cook reportedly is concerned that shareholders would “freak out” if he actually bought a Hollywood studio with some of the spare billions the company throws off each quarter. 

Over the past couple of years, Apple has built a reputation around Hollywood for its willingness to write some of the biggest checks out there to grab hot projects or talent. You can quibble with the artistic results of any particular show (except Ted Lasso, one of the pandemic’s shining lights), but that’s not the point.

The actual point: Apple is spending billions of dollars, though how many billions we don’t know. And it’s only spending those billions on pricey new shows, instead of building a more fully formed service that can compete against streaming’s emerging Big Four: Amazon, Disney, Netflix, and what’s now been christened Warner Bros. Discovery. 

And content spending is just one of many things about Apple TV Plus that the famously secretive company has yet to disclose. 

Apple has just about perfected the pandemic-era online event since going virtual for last year’s WWDC. During those slick pre-recorded presentations, Apple zips through product after product, tossing out major announcements, minor facts, deep specs, and other random details at high speed. But you really have to watch closely to see anything about Apple TV Plus. The mentions of the service are few and brief. 

Earnings calls haven’t been much better. Results for Apple TV Plus get folded into the catch-all “Services” category in Apple financial reporting. 

The solid performance of the Services business has been one of Apple’s big success stories the past five years, as the company focused on generating more revenue from a batch of new and expanded subscription offerings including Apple Care, Music and iCloud. 

The results overall have been eye-popping, with Services now generating more than $16 billion in revenues per quarter. That’s a big business, but we have no idea if Apple TV Plus is even generating any revenue directly to that total. 

As it is, Apple has given away millions of subscriptions to buyers of its iPhones and other devices. It continues to rebate monthly charges for existing subscribers through at least this month. That means, despite the billions spent on all those shows, Apple certainly is spending far more on Apple TV Plus than it brings in. 

So, what do we call a creative pursuit that costs us way more money than it brings in? A hobby. 

So far, Apple TV Plus is a hobby, not a business. 

It’s like Mark Cuban or Steve Balmer's NBA teams, or maybe Jeff Bezos’ media side hustle, the Washington Post. So far, Apple TV Plus has been like that thing a tech billionaire (or trillionaire) indulges in that’s fun and accessible and entertaining to a non-tech audience, and also has better parties than CES or, for that matter, WWDC. 

Of course, Apple executives actually used to call its video-streaming device the Apple TV a “hobby,” because the company really hadn’t figured out a sustainable, competitive business model for its high-priced but capable streaming box. 

That’s less of an issue for what’s now called the Apple TV 4K as the company builds more business models around the device, with an excellent interface that seamlessly blends programming from all the big streaming services, and also runs other Apple services such as Music, Arcade and the recently launched Fitness+. 

A few weeks ago, the company upgraded the Apple TV 4K, adding a beefier A12 Bionic CPU, and more high-end audio and video capabilities. Apple also fixed the TV 4K’s biggest problem, replacing a sculptural but inscrutable remote control with a far more usable successor. In fine Apple tradition, it’s even available separately for a typically extortionate $60. 

During WWDC, Apple likely will showcase some of the ways creators can take better advantage of Apple TV 4K’s beefier CPU and other new capabilities, possibly with augmented reality, Arcade, and Fitness+. Maybe they’ll even mention TV Plus. 

But maybe not. Lots of people prefer to keep their hobbies to themselves.