Apple TV+ movies struggling to prevail in theaters still considered 'profitable'

'Killers of the Flower Moon'

Apple TV+ appears to be pulling some accounting magic after its latest $700 million run of films, which captured only $466 million in revenue, but the company still considers two of them profitable.

Streaming services are attempting to fight a war on two fronts with prestige television and theatrical spectacle. However, reasons ranging from COVID to the slow demise of the theater industry are making it hard to compete with anything without a minion or superhero.

Apple's run at the box office has been middle-of-the-road so far, but a new report from Variety suggests Apple isn't worried. From an anonymous studio source, "Killers of the Flower Moon" and "Napoleon" at least are considered profitable thanks to "ancillary revenue streams."

The basic math doesn't suggest that. Apple's three latest movies — "Killers of the Flower Moon," "Napoleon," and "Argylle" — have earned $466 million worldwide. The trio cost about $700 million to make.

The source didn't comment on "Argylle" being profitable, but it may be too soon as it only just became available to rent at home. The other two could be buoyed to profitability due to customers renting them ahead of their release, but it doesn't seem likely.

All anyone can do is speculate, but it seems Apple may be using its Apple TV+ subscription income and other profits to help keep the projects technically "profitable" — at least on paper. Of the three, "Argylle" seems to be doing the worst with its $200 million development price and $88 million box office revenue.

Of course, releasing a movie in theaters isn't just about recouping costs. It is about award season clout and the Oscars Best Picture holy grail.

A movie created by Apple TV+, shown in theaters, then taking home an Oscar is pure marketing for the subscription service. After Apple's Best Picture win with "CODA," it became an advertising tentpole.

Whatever accounting gymnastics Apple is pulling to call any of these films profitable, the investment may pay off. Apple has 13 Oscar nominations between "Killers of the Flower Moon" and "Napoleon," and we'll find out if the company's investments pay off at the award event on March 10.

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4 Comments

CarmB

said about 1 month ago

Even if prestige titles do not generate much of a profit, if you can recoup a lot of your cost and gain the prestige of being associated with a first-rate effort like Killers of the Flower Moon, that’s a big win. It makes sense to recover as much of the cost as possible and it’s crucial to give A List talent like Martin Scorsese access to as broad an audience as possible. I doubt Scorsese would be satisfied if only subscribers to Apple TV+ were accessing his work. Give a film a theatrical run and then make it available either to rent or buy. This way the film is accessible to whomever wants to see it, regardless of if they are Apple TV+ customers. That it also generates revenue, perhaps even enough to cover production costs, is a winning scenario. Fact is, in the long run, it might be less expensive for Apple to back a film that can draw revenue in a variety of ways than to produce something strictly to add content to Apple TV+. You need to do both but making high-profile movies is not a bad way to go, all things considered.