Asymco is reporting that it costs Apple nearly a billion dollars annually to keep iTunes going.
Apple has made a point of saying that both [the app store] and [iTunes music store] are run at “break even” implying that the gross margin is used up in operating costs . To be sure, the cost of bandwidth and the data center(s) needed must be considerable.But the operating budget for the store is beginning to reach a level that may be beyond what can be spent reasonably. The amount left over for operations has increased from ~$30 million a month in 2009 to $75 million/month today.In fact, if this burn rate is maintained (even though it’s increasing) the operating budget for iTunes is nearing $1 billion/yr.
Yup, that’s a lot of money, but keep in mind that Apple’s still turning a mighty big profit anyway. So, while it takes $75 million per month to keep the service going, they’re certainly not hurting for cash.
[via Fast Company]
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I call B.S. A billion dollars? Right! iTunes is just another bloated database, it’s fully automated, what’s so costly at this point? Asymco also reported that 95% of the iTunes staff make $7.35 an hour with no benefits. LoL I made that up! My bad.