Apple deliberately built the only money-losing service in its entire company, and it might be the smartest line item they have.
Apple TV loses over a billion dollars a year. Music, the App Store, iCloud all print money. TV bleeds. And this was the plan: the projections written before launch budgeted $15 to $20 billion in losses across the first decade.
Here's the math that makes it rational. Apple cleared $93.7 billion in profit last year. A billion-dollar TV loss runs about 1% of that. For that 1%, Apple gets Severance, Ted Lasso, a wall of Emmys, and a legendary game designer telling his millions of followers he couldn't stop watching their new horror show until 2am.
Netflix spends $18 billion a year on content to own that cultural slot. Apple spends $4.5 billion, eats a $1 billion loss, and buys a version of the same prestige for a fraction of the price.
The show is the marketing. Every awards sweep quietly answers the only question that matters to someone choosing between a $1,200 iPhone and a cheaper Android: which company makes things worth your time.
TV has under 1% of US streaming viewership. By streaming math, that's a flop. By Apple math, it's a rounding error that makes a $3 trillion hardware company feel like culture.
Cheapest marketing budget in the building.
With Guillermo del Toro’s recommendation, I started watching Apple TV ‘s “Widow’s Bay.” It’s so incredibly good that I couldn’t stop, so I binged through Episode 9 in one go. This horror-comedy, executive produced by Hiro Murai, is set in a cursed island town 40 miles off the coast of New England. Dense fog, violent storms, and all kinds of supernatural phenomena descend upon the town. It’s packed with horror elements, one after another. Fans of Stephen King and horror in general will love it. The pacing is excellent, and the balance between horror and humor is just right. Ironically, the mayor’s tireless efforts to attract tourists reminded me of Mayor Vaughn from “Jaws.” The townspeople are wonderfully eccentric as well, with personalities straight out of “Twin Peaks.” It’s been a long time since a series pulled me in this completely. I can’t wait for next Wednesday’s final episode.