Report: iTunes costs $1.3 billon per year to run
An interesting report from Asymco estimates that it costs Apple US$1.3 billion per year to run the iTunes store. That sum was reached by examining known numbers, like the total number of songs, movies, TV shows and apps that have been downloaded, plus the number of iTunes accounts and how much Apple has paid out to developers. Those figures were cross-referenced with the average price of songs and apps to get a monthly "content margin."
Asymco estimates Apple's monthly content margin cost for iTunes at $113 million, which is more than $1.3 billion per year. Based on past statements by Apple executives, Asymco assumes that the iTunes store is a break even business, and any profits it realizes go right back into its maintenance and expansion. Specifically, Asymco's researchers believe that most of the profit goes into serving content (traffic and payment processing), while some goes to "curation and support," and anything left over goes towards increasing storage capacity and other services.
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