Comment by hylaride
2 months ago
Apple Music’s margins are probably not that great. It does have to pay licensing fees, but everything else? Maybe…
2 months ago
Apple Music’s margins are probably not that great. It does have to pay licensing fees, but everything else? Maybe…
I'd bet it's still well over 50% margins. At Apple's scale, royalties are pennies on each dollar you make.
Aren't the royalties usually revenue share deals with the record labels like Spotify has?
So that makes it really hard to make a lot of profit - as the royalty costs grow linearly with your revenue.
Yeah, royalty payments average ~60-70% for services where we can cleanly see the breakdown, and much higher for certain artists that can command it. Assuming the overhead for Apple and Spotify is 10% (big assumption), the margins are 20%, which is small for most SaaS. However, I assume both mostly use it as a loss (well, less-profit) leader as part of wider bundles.