Is Apple's Product Strategy Severed from Reality?

Apple is no stranger to playing the long game, but recent reports indicate that Apple TV+ is losing over $1 billion annually despite a hefty $5 billion annual content budget. With just 45 million subscribers, Apple TV+ lags far behind streaming giants like Netflix and Disney+, raising questions about whether this is a smart product bet or a costly miscalculation.

But let's take a product lens to this.

1. Is Apple TV+ Really a Failure?

If you judge by revenue alone, Apple TV+ is struggling. However, Apple's strategy might not be about direct profitability at all. Apple rarely competes on price or volume—it competes on experience and ecosystem lock-in.

Apple TV+ is designed to enhance Apple's ecosystem, making its services (Apple One), hardware (Apple TV, iPhones, iPads, Macs), and brand more compelling. The value isn't just in the number of subscribers—it's in customer lifetime value (CLV) across Apple's entire product line.

2. The Cost of Competing in a Saturated Market

The streaming industry is cutthroat—high churn, endless content wars, and razor-thin margins. Even Disney+ has struggled, despite its massive IP library. Apple entered this market knowing it would bleed money before it could gain meaningful traction.

A smart product leader would ask: What is the real metric for success? Are we trying to win subscribers, or build leverage for bundling and hardware sales?

For Apple, success may not be measured by direct revenue but by increasing engagement and retention across its ecosystem.

3. Long-Term Thinking: Apple's Secret Weapon

Apple's history tells us one thing—it doesn't rush. The Apple Watch wasn't a hit on Day 1. The iPad took years to find its core use cases. Apple TV+ is likely playing the same long game.

Instead of churning out mass content like Netflix, Apple focuses on prestige storytelling and exclusive deals (e.g., Severance, Ted Lasso, and Silo). This is more of a "brand moat" strategy rather than a pure subscriber acquisition play.

Key takeaways for Product Leaders:

Revenue ≠ Success – Apple TV+ may be a loss leader, but if it deepens engagement in the Apple ecosystem, it's still a win.

Metrics Matter – Are you optimizing for short-term profits, user engagement, or long-term retention?

Play the Long Game – Not every product needs to be an overnight success. Sometimes, the strategic advantage is patience.

Apple TV+ might not be a streaming giant (yet), but don't count them out. The best product strategies aren't always about winning today—they're about owning the future.

#TalesOfProduct #ProductStrategy #AppleEcosystem #LongTermThinking #StreamingWars

Full story here: https://www.linkedin.com/news/story/apple-tv-is-losing-1b-a-year-7210090/