February 2013
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Day February 26, 2013

The iTunes Value Structure

The International Federation of the Phonographic Industry (IFPI) reported that global digital revenues were $5.6 billion in 2012. This represented about 9% growth from 2011 and accounted for 34% of total industry revenues[1].

Apple regularly reports iTunes as a separate revenue item and occasionally it also reports payments data for developers and app download rates. By interpolating the data published and combining it with some assumptions it’s possible to estimate the mix of revenues (and costs) associated with iTunes.

My yearly estimates are summarized below.

Screen Shot 2013-02-26 at 2-26-6.04.23 PM

Note that I also included historic digital music industry revenues (as a line). I also included the following summary items:

Panel Discussion with Horace Dediu, Devin Hunt, and Marko Taipale @Tampere Goes Agile 2012

Building the right thing.

Why do some companies seem to be able to build products that fit their customers’ needs exactly while some do not? How to build a company that builds the right thing?