Dollar bills

I have a confession to make…

It’s become painfully obvious to me, glancing at my purchase history, that I’ve reached a point in my computing life where I’m now a big iTunes spender. To my astonishment, in the past year or so I’ve been burning money on apps, media and services at a clip of a hundred bucks each month. That’s actually a conservative estimate. Realistically, my iTunes spending is somewhere in the ballpark of $150-$200 per month.

To look at it another way, that’s $1,200-$2,400 in annualized services revenue for Apple from this particular customer, excluding my hardware purchases. When this much cash is getting sucked out of my pocket by Apple, I can’t help but admit the company must be doing something right when it comes to digital media and services.

I realize $100 per month is a lot of money to burn on digital entertainment. I’m not going to preach on issues of morality here nor will I suggest that everyone should spend that much, or spend anything at all in the iTunes and App Stores.

What I’m getting at is this: despite dropping significant cash on apps, media and services, I’ve never felt buyer’s remorse. Why? Because I’m getting value for my money and, after all, Apple is just a middleman. To put it bluntly, I’d rather spend my hard earned cash to support those who create content for a living than blatantly steal their hard work.

Here’s what a $100 spent in Apple’s content stores buys me, why I don’t think I’m being ripped off and how the sense of satisfaction I get in return makes it all worthwhile for me.

Apple has had my credit card on file for more than a decade now.

A rundown of my iTunes purchase history

Excluding subscriptions, most of my money is spent toward iPhone, iPad and Mac apps, and  movie, television show, book and audiobook purchases.

As you might have guessed, I love apps so the App Store and Mac App Store bite a large chunk out of my monthly iTunes budget. In addition to buying apps and media, I also subscribe to a few popular video services that support iTunes billing.

Plus, I pay for iCloud storage and buy apps for my iPhone and iPad and games for my Apple TV regularly. Add all that up and you’ll quickly realize how my average monthly budget for iTunes/App Store content exceeds $100.

For instance, I’m subscribed to HBO NOW because it’s the Game of Thrones season.

Netflix has Friends and some other shows that I like so I’m a subscriber there as well. It is no secret that I’ve been a happy Apple Music subscriber since day one. As of recently, I’m subscribed to CBS’ All Access services, too.

Plus, I’ll be subscribing to Amazon’s Instant Video as soon as it lands on the Apple TV.

All those subs quickly add up:

  • Apple Music—$9.99 per month
  • Netflix 4 Screens—$11.99 per month
  • CBS All Access—$5.99 per month
  • HBO NOW—$14.99 per month

Quickly, do the math in your head: that’s about $43 per month.

I think about it as $43 to enjoy the vast majority of the talk shows, documentaries and sitcoms that I really appreciate. That’s a hefty price tag for digital entertainment but still not nearly as much as my former $100 a month cable service.

El Capitan iTunes my Purchases Mac screenshot 007

First and foremost, cutting the cord has let me cancel my overpriced cable service.

Instead of forking out a hundred bucks for an 800+ channel cable package—of which I watch five percent, at most—I’m now paying less than half that much.

Aside from the aforementioned video subscriptions, my fast 100 Mbps broadband Internet service, which used to be really expensive, sets me back just $30 per month because it’s now unbundled from the cable service which I’ve cancelled.

What’s a movie buff’s budget for iTunes Movies?

Being a movie buff, I also regularly rent movies from the iTunes Store through my Apple TV and enjoy them on my big screen plasma TV. I would typically rent at least one per week. Despite the somewhat steep price of HD rentals on iTunes (up to $5.99), that’s still a lot cheaper than the price of a cinema ticket.

El Capitan iBooks my purchases Mac screenshot 001
My iBooks Store purchase history. Many of these books cost $14.99+ each.

Throw in the time wasted standing in the line, gas spent, pricey popcorn/drinks—let’s not forget a hefty tax to upgrade your movie-watching experience to 3D/IMAX—and suddenly you’re spending ten times the price of an iTunes rental.

This is precisely why I rent movies on iTunes and only go to the cinema when major blockbusters arrive that warrant paying extra for the huge screen, powerful surround sound and the social experience of watching a movie with a bunch of other people.

If I really, really like a particular movie, I’ll actually buy the multi-gigabyte download on iTunes, knowing I can keep it forever. The non-discounted price of a big name movie on iTunes is $19.99, but most can be had for $14.99.

That’s a lot of money to drop on a movie file, but as I said—I’m a movie buff so there are films I’d watch over and over again without getting bored, so I buy them on iTunes. It’s helping that Apple runs regular promotions bringing popular movies down to $9.99, or even $4.99, for a limited time.

I think I have around 70 purchased movies in my iTunes history.

El Capitan iTunes my Purchases Mac screenshot 001
A glimpse of my iTunes Movies purchase history.

Some of my favorite purchases?

Well, anything Marvel, anything Star Wars, anything Pixar, the Hobbit movies, The Lord of the Rings trilogy, sci-fi and disaster flicks such as Armageddon, the Alien series, Oblivion and Prometheus, as well as legendary movies such as Titanic, Terminator, Back to The Future trilogy, the Godfather films, Scarface and many, many more.

You want to rent music, not own it

As for music, I used to purchase tons of music on iTunes back when the iPod was all the rage. I think I must have burned $1,000+ over the years just on the music files alone. I’ve never spent money on a ringtone on the iTunes Store, and never will, because paying 99 cents for a 30-second snippet seems too silly to me.

I don’t think I’ll ever buy an MP3 file again. When the iTunes Music Store debuted in 2003, Apple’s marketing kept repeating that people want to buy the music, not rent it. Given the poor state of music-streaming services 15 years ago, the statement rang true.

Nowadays, it’s the other way round.

Apple Music all devices teaser 001

I’m no longer interested in wasting cash on tracks because Apple Music gives me all the music that I want for less than the price of a new album release on the iTunes Store. This is why I happily pay Apple ten bucks each month to stream my music.

I ain’t afraid of karma. Or maybe I am?

With a 10+ year history as an iTunes spender, what could my grand total be in terms of my accrued expenses, back from the day I bought my very first 99-cent song and including my most recent purchase (Al Gore’s documentary “An Inconvenient Truth”, which was free on iTunes yesterday).

To be totally honest with you, that’s the rabbit hole I’d rather not go down. Not today, not tomorrow, not ever. See, I don’t think I’d be able to sleep at night knowing I could have bought myself a nice used car had I stolen all that content.

I’ll be the first to admit that I used to get my digital music through Napster before the iTunes Store came along. I didn’t really want to, but felt compelled to steal because buying MP3s legally was a tremendously convoluted, frustrating experience back then.

What sold me on the idea of buying music back when Napster was the cool kid and everyone was downloading MP3s without paying a dime was—aside from the seamless one-click iTunes buying experience—the surgically precise way that Steve Jobs framed it on the day the iTunes Store was announced.

“It’s stealing,” he said, “and it’s best not to mess with karma.”

Indeed, karma is a pretty unforgiving thing and being afraid of karma is the best way I know of not repeating my past mistakes. Therefore, I chose not to steal anymore.

Apple’s new $20 billion business

The funny things is, Apple has only just begun milking its herd of cash cows, really.

And with one billion active devices in the wild and the tremendous stickiness of its platform, small wonder it raked in a massive $6 billion in services revenue in March 2016 quarter alone, representing a notable 20 percent growth over the same quarter in 2015.

Throughout the whole calendar 2015, Apple sold an unbelievable $19.9 billion worth of services to customers, up ten percent from a year earlier.

Apple Services Revenue 2015
An excerpt from Apple’s Supplemental Material revealing Services revenue.

The more Apple’s affluent customers buy apps, media and services, the higher the Services revenue will climb, even more so knowing that services revenue isn’t tied to the ups and downs of quarterly iPhone, iPad and Mac sales.

“This is an unbelievable asset for us,” Cook said on a conference call with investors.

“Because our install base has grown quickly, we have also seen an acceleration in what has become one of the largest service businesses in the world.”

Apple as a services company…

Who knew, eh?

Moral of the story: no buyer’s remorse whatsoever

I’m glad I took Jobs’s advice and that it worked surprisingly well.

I knew back then that I didn’t really want to become a cheapskate who’d steal content left and right and justify himself with a lousy excuse like, “Hey, everyone’s doing it!”

El Capitan iBooks my purchases Mac screenshot 002
On average, I buy one book per month in the iBooks Store.

In the physical world, one doesn’t get to go to the cinema if one cannot afford a ticket so why should the digital world be any different?

I’m interested to hear your thoughts on this topic and want to learn about your habits when it comes to iTunes spending and, more broadly, paying for digital entertainment.

Photo credit: 401kcalculator.org