Apple may be paying $1.3 billion a year in running costs for its iTunes Store, according to analysis from mobile industry number-cruncher Asymco. The figures are based on the store running at roughly breakeven – something that Apple has said in the past – and involve calculating how much Apple is making from sales of songs, videos, apps and e-books, then subtracting its estimated payments to rightsholders/developers. That ‘content margin’ ends up as around $113 million per month, based on a total income of $313 million a month. Hence annual running costs of $1.3 billion. “Much of that cost does go into serving the content (traffic and payment processing). Some of it goes to curation and support. But it’s very likely that there is much left over to be invested in capacity increases,” claims Asymco. “I would like to hear alternative opinions, but my guess is that much of the capex that went into the new data centers Apple built came from the iTunes operating margin.”
Like what you’ve read here? This is just a snippet from our subscription service.
Our subscribers get the most important digital music news and analysis delivered to them every morning and full reports every week plus access to a massive archive of data and previous reports.
For a free two week trial of Music Ally, sign up here. No strings attached – we promise!