iTunes Pricing Structure
If your business plan includes selling your music, content or apps on iTunes, knowing how Apple structures its pricing is key to understanding your potential profit. What you can charge is dependent on the type of content you’re selling through the service and your own arrangements with Apple or a third party that distributes your digital content to iTunes.
Originally, Apple sold songs on iTunes at a single price of 99 cents. In 2009, Apple transitioned iTunes to a variable pricing structure in which songs are sold for 69 cents, 99 cents or $1.29. While a significant portion of the iTunes music catalog is still sold at the original price, Apple and the music labels can now charge $1.29 for more popular tracks and 69 cents for less popular songs.
When it comes to apps, there is a good deal of flexibility on pricing. The price is set by the app developer, as long as it is 99 cents or more, in $1.00 increments (for example, $1.99, 2.99 and so forth). Developers also have the right to distribute their apps for free. Apple does not control any part of the pricing on third party apps but will control the distribution and billing. It also takes 30 percent of sales revenue.
The process to submit your content to iTunes varies based on its type. For music, you must use a content distributor such as Tunecore or SongCast (links in Resources). These services will take care of submitting your music to iTunes for a fee, which is charged yearly per single or album. In some cases, these services will also take a cut of the revenues, meaning you will make less than the standard iTunes 70 percent royalty payments. In rare circumstances you can do this for yourself, but it requires having at least 20 albums in your catalog, Universal Product Codes for all the content you intend to distribute and an International Standard Recording Code for each item you will be submitting.
Submitting apps to the iTunes App Store does not require the use of a third party. To be eligible to submit apps, you must first join the iOS Developer Program, which costs $99 per year. Once you have joined the program, apps are submitted to Apple for approval. Developers report the approval process can take anywhere from several days to several weeks depending on Apple’s backlog of app submissions. If the app is approved it will be listed in the App Store automatically, if not you will be given a reason for rejection, with an opportunity to appeal the decision.