Apple 2.0

Covering the business that Steve Jobs built

iTunes store: 5 billion songs; 50,000 movies per day

June 19, 2008: 10:17 AM ET

Apple issued two nice round numbers on Thursday.

First, it announced that the number of songs purchased and downloaded from the iTunes store since it opened on April 28, 2003 has passed the 5 billion mark. This represents a continued acceleration of music sales. It took Apple (AAPL) nearly three years to sell its first billion songs (Feb 23, 2006), ten months to sell its second billion (Jan. 6, 2007), seven months to sell its third (July 31, 2007) five and a half to sell its fourth (Jan. 15, 2008), and five months to sell its fifth (June 19, 2008).

It's harder to put Apple's second announcement -- that movies are now being purchased or rented from the iTunes store at the rate of more than 50,000 a day -- in perspective. Apple has been selling videos since 2005, but at first those were strictly music videos and TV shows. Movies came later, mostly from Disney. By April 2007, Apple was able to announce that it had sold more than 2 million movies. Movie rentals didn't start until January of this year, when Hollywood finally opened its film vaults, but it's probably fair to assume that rentals represent the larger part of the more than 50,000 titles being downloaded every day. At that rate, Apple is selling or renting 1.5 million movies a month and should have another nice round number for us by Macworld 2009.

Apple now claims that the iTunes store is the No. 1 music retailer in the U.S. and the world's most popular online movie store.

The company has never revealed how much money it makes on each song or video it delivers; it claims to run the iTunes store at "just above break even." Independent estimates put its profit margin on music sales at 10% to 30% percent.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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