Apple Spent $700 Million on Its Last Three Blockbuster Films

There’s little doubt that Apple has been betting big in Hollywood, with its big-ticket Apple Original Films getting more traditional theatrical releases long before they come anywhere near its Apple TV+ streaming service. However, with its last three films raking in far less at the box office than they cost to produce, some are now debating whether this strategy is truly paying off for the company.

Unlike its rivals in the streaming industry, it’s clear that Apple wants to be a mover and shaker in Hollywood. While Netflix also releases some of its biggest films in theatres, those are often “token” releases to meet the minimum requirement for Academy Award nominations. Of course, there’s also Disney+ at the other end of the spectrum, but the House of Mouse was a Hollywood giant long before it debuted its streaming service.

Apple may be the most valuable company in the world, but it’s still just breaking into Hollywood. By some metrics, its three recent feature films have been bordering on “flop” status, earning far less than their keep.

According to Variety, Apple spent over $700 million to produce and market Killers of the Flower Moon, Napoleon, and Argylle. That’s less than the $1 billion the company has committed to spending annually on theatrical releases, but the year isn’t over yet.

More significantly, its worldwide box office take for all three was only $466 million. That translates to a loss of over $200 million on all three films, but it’s also important to keep in mind that the box office isn’t Apple’s only revenue stream. Sources tell Variety that the first two films have been profitable, thanks to “ancillary revenue streams.”

These other sources of revenue come not only from additional Apple TV+ subscriptions driven by those who sign up to watch the films but probably much more significantly from premium video-on-demand (PVOD) services like Amazon Prime and iTunes, where folks can buy or rent digital versions of the films about 6–8 weeks before they show up on Apple’s streaming service.

That’s likely where the lion’s share of Apple’s extra profits are coming from. Streaming service subscribers are a much more fickle bunch these days — and who can blame them with the constantly rising prices — but a rental or purchase of Killers of the Flower Moon or Napoleon during those early access PVOD periods costs $19.99 or $24.99, respectively — and if it’s rented or bought from iTunes, Apple gets to pocket all of that.

While Killers of the Flower Moon cost Apple $215 million to make, that also included about $40 million in COVID-19-related costs, as it was being filmed at the tail end of the pandemic. By comparison, it took in $157 million at the box office. Napoleon likely fared better, as it’s raked in $221 million; however, Argylle has been what Variety calls an “unmitigated disaster,” with a $200 million price tag and only $88 million in box office revenue.

Nevertheless, it’s probably too early to tell where Argylle will land since it’s only been in theatres for about four weeks and has yet to enjoy any of those other revenue streams. It only arrived on PVOD earlier this week; there’s no official word on when it’s coming to Apple TV+, but it should arrive sometime in April if Apple follows past trends.

Of course, as Variety notes, “no studio is better poised to absorb colossal budgets than Apple,” and the films are about far more than just raw profits. These theatrical releases are an investment in raising Apple’s profile, and that seems to be working, with high US awareness scores for Apple’s newest films indicating people are paying attention. As Apple TV+ becomes the exclusive home for more of these, that translates into more subscribers willing to sign up and stick around.

Then, of course, there’s also the cachet of winning Oscars. Apple already set a high bar two years ago with a historic Best Picture win for CODA, but Killers of the Flower Moon is up for 10 Academy Awards, including Best Picture, Martin Scorsese for Best Director, Lily Gladstone for Best Actress, and Robert De Niro for Best Supporting Actor. Napoleon also has two nominations alongside Killers for Production Design and Costume Design, plus a third for Visual Effects.