Apple In The Red
Could AppleTV+ be the next CTV platform to turn to ads in order to turn a profit?
Apple is losing $1 billion a year on its ad-free subscription streaming service, The Information reports.
AppleTV+ reached 45 million subscribers last year, according to two anonymous sources. However, subscription revenue isn’t offsetting content and marketing costs.
From 2019 through 2024, AppleTV+ spent $5 billion a year on content. But Apple CEO Tim Cook slashed that budget by $500 million last year.
To put AppleTV+’s numbers in perspective: Netflix has about 302 million subscribers and will spend $18 billion on content this year.
To be fair, Apple is worth a reported $4 trillion. It can absorb an annual $1 billion hit. And the company expected AppleTV+ to lose between $15 billion and $20 billion in its first 10 years.
Meanwhile, another streaming rival, Disney+, saw $11.4 billion in losses between 2020 and 2024. Disney+ reached profitability for the first time last year, in part from introducing an ad-supported subscription tier and by hiking subscription prices – a strategy Netflix and others have also followed.
Thus far, AppleTV+ has shunned third-party ads, and it hasn’t raised its prices since 2023. Let’s see how long that lasts.
DTC Is DOA Without B&M
The bubble may have already burst on creators launching direct-to-consumer brands.
As it turns out, social-media-native consumers are getting sick of the deluge of influencers shilling DTC products, Select Management Group’s Scott Fisher tells Mike Shields on his Next In Media podcast. And the waves of investor cash flooding the creator marketing channel have only made the problem worse.
The DTC heyday for creators was 2021 to 2023, Fisher says, when social media ad prices were low and mobile attribution was strong. But Apple’s AppTrackingTransparency changed the game.
Nowadays, it only makes economic sense to launch an influencer brand if major brick-and-mortar retailers are willing to sell it, according to Fisher.
Case in point: Select Management Group manages beauty influencer Sarah Cheung’s makeup brand Sacheu Beauty. The brand recently raised $15 million in Series A funding. But, Fisher says, that wouldn’t have been possible if the products weren’t available in 5,000 retail stores.
But what of Unilever’s plan to spend 50% of its global marketing budget on social media and influencers?
Rather than launching new creator brands, Fisher says, don’t be surprised if the Unilevers of the world look to acquire established creator brands with existing retail deals instead.
Ack! Censured?
Not surprisingly, advertising agencies aren’t the only accidental corporate casualties in DOGE’s war against government spending.
Consulting firm Accenture is already getting hit by DOGE cuts, too, Business Insider reports.
In a call with analysts on Thursday, CEO Julie Sweet noted that Accenture Federal Services (AFS) represented 8% of the company’s global revenue and 16% of its Americas revenue in 2024.
While Sweet stressed that “the fundamentals of our industry remain strong,” she acknowledged that the current review of government consulting firms and subsequent slowdown of “new procurement items” has already negatively impacted Accenture’s sales and revenue.
Sources also told Business Insider that fear and uncertainty is rampant within the company, which has started laying off employees who are associated with the federal arm of the business or who don’t currently have projects lined up.
No telling how this will affect Accenture Song, the marketing and creative group within Accenture, but odds are that losing out on parent company funds – not to mention any federal advertising efforts they might have been working on – can’t be good.
But Wait! There’s More
Yahoo sells TechCrunch to media investment firm Regent. [Axios]
NBC Sports is considering a bid on the newly available MLB rights for 2026-2028. [Awful Announcing]
Meta is now testing AI-generated comment suggestions on Instagram. [TechCrunch]
Why are so many advertising professionals becoming content creators? [Digiday]
