How Much Does It Cost To Run iTunes? Hint: It's Big. - hypebot

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Old Record Guy

Wow, so I guess the pundits at those digital music conferences who told everyone that digital distribution had almost no inherent costs were WRONG? Can I get a refund for my registration fees?

To distribute digitally, if you have the burden of actually paying rights holders, plus tracking, reporting, content management, data hosting, etc etc etc is expensive. Even giving content away is expensive.

Very interesting article. The math is probably off but still.....

ovey

This is so wildly bogus.

They just estimated revenues, and then, because Apple SAYS they only break even, it is assumed that this is the resulting operating cost.

Since Apple is a public company I decided to check out their statement. I just grabbed Jan 2010 (http://www.apple.com/pr/library/2010/01/25results.html -thanks Google) and learned that, for the quarter, their total operating cost was 1.68 billion, yeilding 6.72 billion for the year.

So you expect us to believe that Apple, who runs and pays rent on hundreds, if not thousands, of retail outlets, has a global manufacturing scheme, and markets their products everywhere, spends almost 15% of their operating costs on iTunes bandwidth?

Right.

G

It's a big leap from $75 million to $1 Billion. I would think that the nest step is $100 million...

J

75 mill a MONTH. 1 bill a YEAR.

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