AfterDawn: News

iTunes now costs $1.3 billion per year to run

The latest report from Asymco says it now costs Apple $1.3 billion to run iTunes on a yearly basis.

Horace Dediu used the numbers from Apple’s latest quarterly earnings and then cross referenced them average prices for music and apps to get a “content margin.”



The numbers used were:

15 Billion iTunes song downloads
130 million book downloads
14 billion app downloads
$2.5 billion paid to developers
225 million accounts
425k apps
90k iPad apps
100k game and entertainment titles
50 million game center accounts

Dediu estimates the monthly content margin now comes in at $113 million, which the editor believes all goes back into running the store and paying for traffic/payment processing and increasing storage capacity.




Written by: Andre Yoskowitz @ 14 Jun 2011 10:37

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• 6 comments

• hearme0

  Ehh........in light of this article........might as well close it down.

  14.6.2011 11:28 #1

• LordRuss

  At first glance I wanted to cry foul, but then I had to remember this little dog grooming business in this small hick town. You wouldn't think much about it driving past it at all. But after several years of this lady working her ass off to build it up, she must have to have $100 a year to run through it make it 'pan out'. You know, pay the rent, keep groceries coming in, get the kids through high school and keep the business running.
  
  However, with Apple, there is this business of the space ship to contend with...
  

  http://onlyinrussellsworld.blogspot.com

  14.6.2011 11:33 #2

• xboxdvl2

  itunes probably makes double what it cost to run.they are getting more popular everyday.even if they lose a bit of money they will make it back (+some) eventually.
  
  as for the above comment^^^.if she is a good dog groomer and has excellent customer service she will make money.
  
  if you go somewhere and the staff are rude to the point of being offensive and unpleasant you won't be recommending that place or going back.go somewhere and the staff are pleasant and helpful you will remember and recommend the place to friends & family.
  

  R.I.P. mr 1990 ford falcon.looking for a new car.computers still going good.

  14.6.2011 21:58 #3

• LordRuss

  Originally posted by xboxdvl2:
  as for the above comment^^^.if she is a good dog groomer and has excellent customer service she will make money.
  My grammar took a bit of a shot & was a tad shoddy, what I was try to say in a short amount of space was that a small dog grooming shop in an area with a very depleted economy kept she & her family alive. Maybe not what most folks would call a living, but not complete poverty either. In doing so I'm pretty sure the business had to do about $100K in order to accomplish it properly; thus the crazy amount of money Apple is claiming for its operating expenditures didn't sound too belligerent. But where the dog groomer wasn't living "high on the hog", Apple is building 3.3 million square foot space ships...
  
  That's all. No soap box or "Russell's off his meds again" speech.
  

  http://onlyinrussellsworld.blogspot.com

  15.6.2011 12:57 #4

• bratcher

  I guess Itunes users aren't buying ebough songs, albums & other stuff from the Itunes store. Myself? I prefer to buy my music from Amazon's mp3 service....

  23.6.2011 10:16 #5

• Mez

  They must be adding in the royalties as an operating expense. I would have a hard time buying an mp3. I buy CDs on the after market on Amazon. I rip them than pack them away. Then I know my mp3 was 'cooked right'.

  23.6.2011 13:17 #6