'Severance' may have made $200 million, but Apple doesn't have to care

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A sketchy report claims to have calculated the precise income Apple TV+ has made from key shows like "Severance," but the figure appear to be guesses that ignore how the company's business model is different to all other streamers.

Severance, Apple TV+
"Severance" -- image credit: Apple



"Severance" is unquestionably a much-talked about hit for Apple TV+, but aside from a Blu-ray release, the only income it can provide Apple is from the number of subscribers it attracts to the streamer. Apple has yet to release any subscriber numbers at all, but according to Deadline, one company is saying it has calculated the financial value of Apple TV+ shows.

Research firm Parrot Analytics has not made its full report public, and shares no details of what it calls its Content Valuation methodology. Unlike any other streamer, though, the only revenue stream for Apple TV+ is subscription.

There are a very few physical media releases of Apple TV+ series, but those appear to be driven by licencing agreements that the originating production company negotiates. Apple does not have a distribution arm making Blu-ray deals.

It's possible, too, that Apple could be getting income from where its service is shown in bundles with other streamers and television services, such as Canal+, or on airlines such as Air Canada. If Apple is being paid for those instead of just using them to spread its reach further, then neither Apple nor the bundling companies are reporting the sums.

Consequently, Parrot Analytics' calculation must be based on how subscriber numbers are believed to increase around the launch of specific shows or episodes. While it's not clear how accurate Parrot Analytics' estimates of this can be, but as long as its sourcing is consistent, the company could be expected to determine whether one show drew more subscribers than another.

Jason Sudeikis as Ted Lasso
"Ted Lasso" is claimed to have earned Apple over $600 milliion -- image credit: Apple



The company goes further, though, in ascribing specific dollar values to some of the service's major shows. According to its figures:


  • "Severance" season 1 earned over $200 million

  • "Slow Horses" has earned $184.8 million

  • "The Morning Show" has totalled $299.4 million

  • Ted Lasso generated $609.4 million



Note that even if accurate, none of these figures take into account the production or marketing costs of any of these shows.

According to Deadline, Parrot Analytic also says that it examines how shows generate income in markets across the globe. This is another area, though, where Apple TV+ is unusual, because even if it sometimes fails, it always aims to get global rights to all of its shows and films.

Consequently, it is unlikely to ever emulate other broadcasters and licence local remakes of shows in different languages. As far as Apple is concerned, the shows are already in every territory, and another broadcaster exploiting its series would only be competition.

Retaining viewers



There is one further aspect to streaming that Parrot Analytics claims to report, but it's also problematic. Every streaming service has what's called a churn rate, which is how many people leave compared to how many join.

Again, Apple reports none of this. But Parrot Analytics claims to have calculated that shows such as "Severance" earn Apple income because they keep on attracting new subscribers.

That's certainly true, but despite Apple TV+ tending to space out its major shows, there are still times when it can't be clear what's driving subscriptions. That's especially the case since Apple TV+ started carrying MLS sports games, whose season runs for months.

Parrot Analytics further claims, though, that "Severance" has earned money from what its strategist Brandon Katz describes as "catch-up viewing and rewatches from hungry fans." That's claim must be based on the retention of subscribers, but it's not remotely clear how it could be determined that one series is keeping them watching and rewatching.

Perhaps Parrot Analytics' methodology includes audience questionnaires, as typical ratings companies use. But Parrot Analytics claims that it is this retention plus attraction of new subscribers that is how "Severance" has earned its $200 million figure.

The company also appears to claim that it is because of this retention that "Severance" season two is being released one episode per week, instead of dropping all at once. But season one did the same thing.

Overall, then, until the research methodology is explained and justified, the Parrot Analytics figures are questionable. But, again, whatever their foundation, if the sources are consistent, it is possible to make comparisons.

In which case it's fair to say that the figures show that "Severance" is a hit. It's also fair, though, to say we all already knew that -- and that it's likely Apple does not care about the potential revenue from shows.

It's not that Apple is profligate -- it is reportedly working to cut costs -- but Apple makes its money from selling iPhones, not from Lumon Industries.



Read on AppleInsider

Comments

  • Reply 1 of 10
    charlesncharlesn Posts: 1,296member
    It's always the same story with these companies that are in the business of selling their data about what's seemingly unknowable. When asked about methodology and sources, it's always "proprietary," a black box secret as to how they managed to arrive at the numbers they did--probably because people would laugh out loud if they provided the real answer. But suffice to say that "I can't tell you how I did this" would never be accepted as serious research. 

    As William correctly points out in this article, there are WAY too many variables to assign specific subscription revenue to particular shows. 
    watto_cobra
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  • Reply 2 of 10
    nubusnubus Posts: 678member
    Apple spent $10b on Car. The numbers indicate that TV+ is performing even worse.
    $20B already spent and no profit. TV+ has been live for 6 years to gain 0.3% of the audience. 
    It isn't even exclusive to Apple hardware with support for Android phones and TV.

    I could see it serve AVP but now... I would suggest for Apple to sell it and make a deal with a streaming service instead.

    ForumPostsconosciutoWesley Hilliard
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  • Reply 3 of 10
    charlesncharlesn Posts: 1,296member
    nubus said:
    Apple spent $10b on Car. The numbers indicate that TV+ is performing even worse.
    $20B already spent and no profit. TV+ has been live for 6 years to gain 0.3% of the audience. 
    It isn't even exclusive to Apple hardware with support for Android phones and TV.

    I could see it serve AVP but now... I would suggest for Apple to sell it and make a deal with a streaming service instead.

    A streaming platform isn't an overnight success. Netflix started streaming in 2007. It dropped House of Cards 12 years ago. And do you know when Netflix turned its first profit on streaming original content? 2024. And you're upset that Apple TV+ hasn't turned a profit in only five years--it debuted in Nov, 2019. You're upset that Apple spent $20 billion on shows in 5 years? Netflix has spent that much in a year more than once. Apple TV+ is a halo extension of the Apple brand with programming that showcases the high quality and creativity for which Apple products are famous. It's also a showcase for the visual arts creative community, in general, who form an important core part of the Apple customer base. And it has done fantastically well at that. It's the only streamer to win an Oscar for Best Picture with a movie that debuted less than two years after Apple TV+ started streaming. Do you have any idea how hard that is to pull off? Last year it had a record 72 Emmy nominations, spread across 16 different Apple series, including a sweep of nominees across all of the top Emmy show categories. And again, this is from a streaming platform that had only been in the game for four years at that point. 

    Apple MUST be in the streaming space that keeps it at the crossroads of movies, television shows, live sports and concerts because those are essential elements of American culture and they help to keep the Apple name culturally relevant and in the cultural zeitgeist. Does Apple TV+ need more subscribers than it currently has? Sure. But it has done the harder part of making that happen already by creating so many great shows. 
    JanNLwatto_cobraForumPostmuthuk_vanalingambestkeptsecret
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  • Reply 4 of 10
    blastdoorblastdoor Posts: 3,669member
    I bet their methodology isn’t especially sophisticated and involves strong assumptions.

    I wonder if maybe what they are really doing is estimating the value of the show if it were to receive advertising revenue. That would be incredibly misleading on their part, but I bet that would be way easier to do.
     0Likes 0Dislikes 0Informatives
  • Reply 5 of 10
    nubusnubus Posts: 678member
    charlesn said:
    Apple MUST be in the streaming space that keeps it at the crossroads of movies, television shows, live sports and concerts because those are essential elements of American culture and they help to keep the Apple name culturally relevant and in the cultural zeitgeist. Does Apple TV+ need more subscribers than it currently has? Sure. But it has done the harder part of making that happen already by creating so many great shows. 
    Would you say Google and Microsoft are only relevant if they enter streaming? Apple would IMHO be better of by shopping gaming studios instead of running a 3rd tier streaming service focused on art cinema.
    sconosciutoWesley Hilliard
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  • Reply 6 of 10
    charlesncharlesn Posts: 1,296member
    nubus said:
    charlesn said:
    Apple MUST be in the streaming space that keeps it at the crossroads of movies, television shows, live sports and concerts because those are essential elements of American culture and they help to keep the Apple name culturally relevant and in the cultural zeitgeist. Does Apple TV+ need more subscribers than it currently has? Sure. But it has done the harder part of making that happen already by creating so many great shows. 
    Would you say Google and Microsoft are only relevant if they enter streaming? Apple would IMHO be better of by shopping gaming studios instead of running a 3rd tier streaming service focused on art cinema.
    Ummm... hello? Google owns THE most popular streaming platform on the planet: YouTube. How's that for cultural relevance? Microsoft has always had a different business that is much more corporate focused than Apple. It has never been one of the cool kids in tech, perhaps best typified by its release of the infamous brown Zune. I shudder to think what the programming on a Microsoft streaming platform might be like. But honestly, this isn't meant to throw shade at Microsoft, which is a hugely successful company, but a very different one from Apple. It doesn't have any of the spotlight that Apple gets constantly on its consumer products and doesn't have legions of fans talking endlessly about what incredibly incremental change it might make in its next product release. I actually think about Apple and the Kardashians is a similar way: both have remained culturally relevant and top of mind for MANY years, at a time when people have a nanosecond attention span before they're on to the next thing. That kind of staying power in remaining relevant for so long is a rare and very difficult thing to achieve. The day Apple products stop being the "IT" tech products to own, Apple is in a whole lotta trouble. 
    muthuk_vanalingam
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  • Reply 7 of 10
    The day Apple products stop being the "IT" tech products to own, Apple is in a whole lotta trouble.

    IDK if you realize this but you’re regurgitating a(nother) tired, outdated trope about Apple regularly peddled by those suffering from chronic ADS; namely that people buy its products because they are trendy and cool. As if they are merely designer goods. This is woefully misinformed.

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  • Reply 8 of 10
    nubusnubus Posts: 678member
    charlesn said:
    Ummm... hello? Google owns THE most popular streaming platform on the planet: YouTube. How's that for cultural relevance? Microsoft has always had a different business that is much more corporate focused than Apple. It has never been one of the cool kids in tech, perhaps best typified by its release of the infamous brown Zune. 
    Having YouTube only makes Google more relevant to advertisers. It doesn't make you go buy Android devices. Same for Apple and TV+. There is no need for Apple to have TV+. It doesn't require Apple hardware or have significant unique features when used with Apple hardware. Apple could have done games like MS and Sony to connect hardware and services. As for Zune... Apple did the Zune of SoMe with iTunes Ping. At least it didn't come with a $20B bill.

    Wesley Hilliard
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  • Reply 9 of 10
    Wesley Hilliardwesley hilliard Posts: 372member, administrator, moderator, editor
    nubus said:
    charlesn said:
    Ummm... hello? Google owns THE most popular streaming platform on the planet: YouTube. How's that for cultural relevance? Microsoft has always had a different business that is much more corporate focused than Apple. It has never been one of the cool kids in tech, perhaps best typified by its release of the infamous brown Zune. 
    Having YouTube only makes Google more relevant to advertisers. It doesn't make you go buy Android devices. Same for Apple and TV+. There is no need for Apple to have TV+. It doesn't require Apple hardware or have significant unique features when used with Apple hardware. Apple could have done games like MS and Sony to connect hardware and services. As for Zune... Apple did the Zune of SoMe with iTunes Ping. At least it didn't come with a $20B bill.

    I'm not sure why you're so down on Apple TV+. By all metrics it's doing what Apple wants it to do: drive services revenue. The company still has billions in the bank, is still making new products every quarter, and still sells more of any single consumer electronic device than any other company on the planet. Apple TV+, Fitness+, and Apple Music are all add ons that drive users to a paid bundle that more than make up for their cost. I'd be willing to bet Apple's services division is at least flat if not profitable (I mean in terms of the mentioned services, not the quarterly earnings services division that includes payments from Google etc)

    Apple TV+ has also consistently produced some of the best content on television, dollar for dollar. Netflix is charging $25 a month for garbage. Amazon holds no more value for its "free shipping" and five decent TV shows, and the only bundle pulling its weight in value is Disney/Hulu that is only winning through sheer star power and volume.

    Market share isn't everything. Success is measured by the company, not the analyst. Do you think Apple believes TV+ is a waste of time? I don't think so.
    muthuk_vanalingam
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  • Reply 10 of 10
    charlesncharlesn Posts: 1,296member
    nubus said:
    charlesn said:
    Ummm... hello? Google owns THE most popular streaming platform on the planet: YouTube. How's that for cultural relevance? Microsoft has always had a different business that is much more corporate focused than Apple. It has never been one of the cool kids in tech, perhaps best typified by its release of the infamous brown Zune. 
    Having YouTube only makes Google more relevant to advertisers. It doesn't make you go buy Android devices. Same for Apple and TV+. There is no need for Apple to have TV+. It doesn't require Apple hardware or have significant unique features when used with Apple hardware. Apple could have done games like MS and Sony to connect hardware and services. As for Zune... Apple did the Zune of SoMe with iTunes Ping. At least it didn't come with a $20B bill.

    I've spent my career working in advertiser-supported entertainment and, with all due respect, you have no idea how this works. Honestly, what you write suggests an old boomer who is really out of touch. YouTube makes Google relevant to the countless millions of creative class individuals around the world posting videos to the site, from those who've become multi-millionaires by doing it to those who just do it for the pleasure of posting content. It also makes Google relevant to the hundreds of millions of people around the world who watch these videos. And sure, it makes Google relevant to advertisers, too. No, you don't run out and buy an Android product right after you watch, but it would be aging boomer mentality to think it has no value to Google if you don't. This isn't about immediate cause and effect that you seem to think it has to produce to be worthwhile. Apple cut a deal with the NFL in 2022 to pay $50 million a year for five years to sponsor the Super Bowl  halftime show. That's just the fee to the NFL, and all the huge production costs are on top of that. Is the featured talent exclusive to Apple Music? Nope. Can you listen to whomever is performing on all the top music streaming platforms? Yep. Are people rushing out right after the game is over to buy an iPhone, Macbook or some other piece of Apple hardware, or even signing up in droves for Apple Music because Apple sponsored the halftime show? No. It's all about keeping the brand image relevant and top of mind for consumers. 

    The day Apple products stop being the "IT" tech products to own, Apple is in a whole lotta trouble.

    IDK if you realize this but you’re regurgitating a(nother) tired, outdated trope about Apple regularly peddled by those suffering from chronic ADS; namely that people buy its products because they are trendy and cool. As if they are merely designer goods. This is woefully misinformed.

    Really? I suggest you read the Business Insider article from October 2023 titled, "Apple Has a Stunning Stranglehold Over Gen Z," then come back and tell me again how it's not on trend. Or do some reading about green text bubble stigma. Or pay closer attention to which brand's tech products show up in most movies and TV shows where tech products appear on camera. Or understand that it has held the title of "World's Most Admired Company" for 17 years in a row and counting. By the way, being the "IT" product in tech has nothing to do with being "designer goods.". 
    edited January 22
    muthuk_vanalingam
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