When most people think of Apple they think of hardware. Apple’s got the iPhone, iPad, and iMac — and they also make their own software to power those devices — but one of Apple’s secret weapons is its gigantic media division.
iTunes was just updated last week, and you already know that it sells everything from books, Apps, newspapers, music, TV shows, movies and more. But did you know that iTunes would be one of the largest and most profitable media companies in the world if Apple decided to set up iTunes as a separate company?
Edmond Lee at Bloomberg ran the numbers recently to find out just how huge iTunes is in comparison to other successful media companies.
“By itself, Apple’s iTunes and App stores make more money than The New York Times; Simon & Schuster, which publishes the best-selling “Steve Jobs” biography; Warner Bros. film studios, which owns the popular Batman film franchise; and Time Inc., the largest magazine publisher in the U.S.
During the fiscal year ending in September, Apple’s media storefronts made $8.5 billion in revenue, which is about $300 million more than all the above-mentioned media companies combined. Even though CBS is the most-watched TV network in America, Apple’s media division still makes more money.
iTunes’ huge media library started with just $0.99 song downloads, but now Apple’s selling iOS and Mac apps that can cost significantly more than a buck, along with season passes for TV shows, or subscriptions to the New York Times, which runs at $455 a year.
Apple only gets 30% of the revenue generated by the store, but even after Apple pays its transaction fees, it’s still left with a sizable chunk of change. For example: the Steve Jobs biography is sold for $16.99 in the iBookstore and Apple keeps $4.85 of that. Apple also makes $4.25 each time someone buys The Avengers movie from iTunes for $14.99.
To be fair, Apple’s iTunes division is still fairly small compared to companies like News Corp., which generated $33.88 billion in sales for 2012, or Disney, who made $42.28 billion in sales. But still, for a company that is focused so much on creating innovative hardware, Apple has created one of the biggest media empires on the planet as a mere side project, which makes it even harder for companies like Google, Samsung and Microsoft to compete with them.