How Much Does It Cost To Run iTunes? Hint: It’s Big.

image from Like anyone in the record and music industries, you’ve probably wondered to yourself how much it costs to run iTunes. Well, you’re not alone. According to the app developer and industry analysis site Asymco, iTunes is approaching an overhead of nearly $1 billion a year.

At present, their monthly operating costs are estimated to be around $75 million and if this burn rate is maintained—though it looks to be increasing—iTunes will reach this high mark sooner than later. Austin Carr, a reporter for Fast Company, speculated that, “such high costs for a download store may provide some clues into why Apple has hesitated to switch to the cloud.” To which he argues that a streaming service “might be just too expensive to maintain.”

It’s also been reasoned that if Apple does add streaming capabilities to iTunes they will charge users extra for it. With these exuberant operating costs in mind, it may be some of the reasoning behind why Apple hasn’t hesitated as much as the labels have been claiming that streaming should be counted as an additional use. To be sure, Apple may not need the money, but they could use it.

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  1. 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…..

  2. 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 ( -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?

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