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Piper Jaffray: iTunes Match likely breaking even for Apple

Gene Munster of Piper Jaffray believes that for all of Apple's success with iTunes Match so far, the company is probably still only breaking even on the service. Sure, $24.99 a year from all of the service's users is a lot of money flowing in, but there's a lot going the other way as well, from server costs to music royalties and all of the other charges with running such a complicated service.

Munster believes there are 135 million active iTunes users in America, so if only a small fraction of those subscribe to the service, there's a nice chunk of change coming in to Apple. But at the same time, Apple isn't expecting huge earnings from Match; it's essentially a promotion to help get people into the iTunes system and a solid mechanism for keeping them there. Apple would much rather sell you devices to listen to your iTunes library, therefore it's not quite so concerned about how you get that music in the first place. As a result, Munster's guess that Match isn't a huge moneymaker for Apple is probably correct.



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iTunes Music

Gene Munster of Piper Jaffray believes that for all of Apple's success with iTunes Match so far, the company is probably still only...