Apple revolutionized the music industry when it first introduced the iTunes Music Store back in 2003. At the time, people were either spending $10-$15 for a CD, or pirating their music from a p2p service like BearShare. And iTunes came in and changed all that.
Since then, Apple has really turned the Store into a media empire. It added TV shows in 2005, movies in 2006, apps in 2008 and then books and magazines shortly after. Today, Apple’s iTunes business ranks among some of the world’s largest media companies…
“By itself, Apple’s iTunes (which was just updated) and App stores, which hawk everything from movies and music to books and newspaper subscriptions, 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.
Apple’s digital storefronts took in more than $8.5 billion for its fiscal 2012, which ended in September. And put together, the revenue of the above-mentioned media companies only adds up to $8.2 billion for the same period — about $300 million less. Wow.
Now, iTunes still pales in comparison to companies like News Corp., who recorded $33.88 billion in sales during Apple’s fiscal year, and Disney, who did something like $42.28 billion. But it’s also growing much faster than them, with an annual growth rate of 35%.
To be fair, a large amount of Apple’s iTunes sales comes from applications. Without app sales, it doesn’t compete against companies like Warner Bros. and Time. But apps are a part of the iTunes media hub, and many serve as entertainment, so why not include them?
Besides, Credit Suisse Group AG analyst Talal Khan says that Apple’s real influence over media markets comes from the more than 435 million individual iTunes accounts it has access to. This, he explains, is what enables it to go to media companies and negotiate terms.
After a bit of a delay, Apple gave its desktop iTunes application a complete makeover last week. The update includes some new playback features, a revamped MiniPlayer, and deeper iCloud integration. If you haven’t yet, click here to find out more about iTunes 11.