Apple's F1 Movie Burns $300 Million—Still Waiting On A Profit

Core Insights - Apple, Inc. is re-entering high-budget theatrical releases with the launch of its racing drama "F1," which has a reported budget of $300 million, indicating the company's ambition in Hollywood despite ongoing financial challenges in this sector [1][3] - Despite Apple's substantial resources, including a $3 trillion market cap and nearly $100 billion in annual profits, its video production unit has not turned a profit since its inception in 2017 [2][5] - The company has invested over $20 billion in original content, but this has not resulted in significant box office success or subscriber growth to offset costs [3][4] Financial Performance - Apple's last three major films—"Killers of the Flower Moon," "Napoleon," and "Argylle"—cost over $700 million to produce and market but only generated $466 million in global box office revenue, leading to a loss exceeding $200 million from these theatrical releases [4] - Apple TV+ has approximately 45 million subscribers but captures less than 1% of total U.S. streaming viewership, incurring annual losses of over $1 billion [5] - The company has reduced its annual content spending from $5 billion to $4.5 billion in response to ongoing losses, yet its video production division remains unprofitable [5] Strategic Positioning - The video production unit is primarily a prestige driver and a tool to promote Apple's broader ecosystem rather than a standalone profit center [6] - CEO Tim Cook perceives Apple Original Films as a separate business, although he does not expect the release of "F1" to significantly boost iPhone sales [6] - While high-profile releases like "F1" may enhance Apple's brand and attract new customers, the division has yet to prove it can be financially self-sustaining [6][7]