Apple a surprise media behemoth
App and itunes stores rang up $8.5B last year
Google, Facebook and even Yahoo have been hailed as visionary companies that aren’t just disrupting old media, they’re replacing it. That conjecture hasn’t applied as readily to Apple, which after all deals in high-end hardware, not eyeballs or advertising.
A closer look, however, reveals that Apple not only has a significant media business, it’s bigger than most major media companies — and possibly at their expense.
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 bestselling Steve Jobs biography; Warner Bros. film studios, which owns the popular Batman film franchise; and Time Inc., the largest magazine pub- lisher in the U.S.
Apple’s media storefronts took in more than $8.5 billion for the fiscal year ending in September. Put together, the revenue of the abovementioned media companies only adds up to $8.2 billion for the same period, about $300 million less than Apple. To be sure, a fair amount of those sales include apps unrelated to entertainment or media. The company doesn’t break out those sales versus media or entertainment purchases, but the primary draw for consumers has long been iTunes’s ever-growing media library, which started with 99 cent song downloads and now includes $455 annual subscriptions to the New York Times. The irony here is that the maker of the best-selling iPad and iPhone doesn’t make any content. Instead, it relies on the media industry’s willingness to sell its precious movies, TV shows, newspapers and books through Apple in an arrangement that’s allowed the iTunes and App stores to outpace the very companies supplying them.
The media companies, after a period of hesitation, realized they needed to make their products available on those must-have mobile devices that so dominate consumer culture today.
CBS, for example, while the mostwatched TV network in America, still makes less money than Apple’s media division. Marvel? Universal? 20th Century Fox? Disney’s film studios? All beat. The division is six and a half times larger than Paramount film studios. Newspaper and magazine publishers barely register compared to Apple’s media store on which they now partly rely for new circulation revenue.
Of course, Apple’s content business doesn’t compare to many of the vast holding companies that sit behind these studios and television businesses. News Corp., owner of Fox News and FX and led by Rupert Murdoch, generated $33.88 billion in sales during Apple’s fiscal year, while Disney, owner of ESPN and ABC, took in more than $42.28 billion, which includes its lucrative parks and resorts.