How much $ does iTunes actually generate

mellomello
Posted:
in iPod + iTunes + AppleTV edited January 2014
I heard that Apple makes $0.35 for every track that they sell on iTunes. I know that they are making most of their money from iPod sales but they've got to be making something from track sales. Does anyone know how much of that $0.35 is actually profit? A nickel, dime, etc.



If they make a dime profit each & get to their 100 million goal, then they would pocket 10 million bucks which is nothing to sneeze at.



Any thoughts?

Comments

  • Reply 1 of 3
    homhom Posts: 1,098member
    The MacObserver quoting a Merrill Lynch analyst said the following:

    Quote:

    "We believe that some (US)65 cents of every (US)99 cent song goes to the music companies," Mr. Milunovich wrote, and said "our guess is that Apple books about a dime of gross profit for every song it sells."



    That is about as accurate a number you're going to find.
  • Reply 2 of 3
    hobbeshobbes Posts: 1,252member
    Apple has stated publicly that the ITMS makes a negligible profit, let alone anything at all.



    It's much more about solving a problem, getting attention, and (most of all) moving iPods.
  • Reply 3 of 3
    amorphamorph Posts: 7,112member
    The dime/song is gross profit, not net profit, and remember that it's lower if someone buys an album with more than 10 songs for $9.99. Whatever's left over after they've paid for hosting, bandwidth, support, etc. is the profit (or loss) they report.



    Right now it's on track to break even. But that's OK: Apple execs have been abundantly clear that they don't see iTMS as a (direct) revenue generator. They don't think there's any money in online music right now. iTMS exists to sell iPods, which incidentally bring in a whole lot more than $10 million.
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