Apple TV+ cuts costs after expensive projects fail to attract viewers

Apple cuts spending in Hollywood after investing more than $20 billion in original programming with limited success, Bloomberg reports.

The move comes after the streaming service, which launched in 2019, has struggled to capture a significant share of the market, accounting for just 0.2% of the U.S. TV audience, compared to Netflix’s 8%. Despite significant investment, critical acclaim and numerous award nominations, Apple TV+ reportedly generates fewer viewers in a month than Netflix does in a single day.

Over the past five years, only four Apple TV+ series have ranked in Nielsen’s weekly list of the top ten most popular original streaming shows. Ted Lasso was the most-watched streaming show of 2023, ‌Apple TV+‌ still accounts for a smaller share of the top ten hits than any streaming service except Paramount+.

Apple’s early days in streaming were marked by lavish spending on high-profile projects and talent, including deals with big names like Oprah Winfrey, Steven Spielberg and Jennifer Aniston. The company’s Hollywood arm, led by studio executives Zack Van Amburg and Jamie Erlicht, positioned itself as a talent-friendly destination, reminiscent of HBO, offering creators seemingly limitless financial resources.

Apple has spent more than $500 million in total on the films from directors Martin Scorsese, Ridley Scott and Matthew Vaughn, and more than $250 million on the World War II miniseries. The Masters of the AirDespite good reviews and award nominations, these projects failed to generate the audience Apple apparently hoped for.

The company’s new strategy would involve tighter budget control and a more prudent approach to spending. This includes paying less up front for shows, canceling underperforming series more quickly and delaying productions to better manage costs. For example, the production of the science fiction series Foundation has been postponed to avoid budget overruns caused by delays related to the 2023 actors’ and writers’ strikes.

The cost of the second season of Breakup has climbed to over $20 million per episode due to pandemic-related delays, internal conflicts and additional expenses such as hiring Card castle creator Beau Willimon for his contributions to the script. Management asked the producers to Breakup to reduce the budget for future seasons, emphasizing the need for financial sustainability.

Apple has also become more selective in acquiring new projects, declining to buy some shows that vendors say the company would have accepted just a few years ago. The company is reportedly looking to shed its image as Hollywood’s biggest spender and bring more discipline and strategy to its content investments.

While still being willing to invest massively in certain large-scale projects, such as The Morning ShowWith cast salaries alone topping $50 million for the upcoming season, ‌Apple TV+‌ is becoming more budget-conservative. The Morning Show Stars Jennifer Aniston and Reese Witherspoon will each earn more than $2 million per episode. The adjustment comes at a time when other major studios like Disney, Warner Bros. and Paramount are also cutting their streaming budgets due to mounting losses.