Intellectual Property Law

Apple's $110 Mil./Year Movie Business

By Cynthia Brumfield

Underscoring its leadership role in the online distribution of music and entertainment, Apple announced this morning it has sold more than five billion songs via its iTunes store, up by more than a billion since January 2008 when Steve Jobs told MacWorld attendees that the number of songs sold stood at four billion. But Apple also announced a more interesting statistics today: iTunes users are now renting and purchasing over 50,000 movies every day.

At this rate, Apple is selling or renting 18.25 million movies on an annualized basis. Using some reasonable assumptions about the average price per sale or rental, this run-rate translates into about $110 million per year in iTunes movie revenue.

iTunes movie sales are priced at $9.99 (for library titles) and $14.99 (for new releases). Rentals are priced at $2.99 (library) to $3.99 (new releases), with Apple TV HD versions of film rentals priced at $1 above the standard rental prices. Assuming that the average price of a sale/rental combined is around $6, then Apple is raking in around $110 million in movie revenue alone on an annual basis.

Although a tiny amount of revenue in comparison to its music business, and certainly a sliver of the revenue that Hollywood generates from TV, theatrical releases and DVDs, $110 million is nonetheless a big chunk of change in the online video world. Apple surely is the largest online video retailer in the business.

Moreover, this revenue doesn't include anything from the sale of TV shows via iTunes. At MacWorld, Apple said it had sold 125 million TV shows via iTunes in just over two years of selling TV shows. Assuming that Apple now sells 100 million TV shows on an annual basis, with each program priced at $1.99, then the online media giant is slated to generate nearly $200 million in TV show revenue, bringing its total video haul to around $310 million per year.

Full post as published by IP Democracy on June 19, 2008 (boomark / email).