It’s way too early to assess Apple’s new iTunes movie rentals, but we can make one call: The move could be a nice bump for Akamai Technologies (AKAM), the content delivery network (CDN) that Apple uses to send movie files to your computer.
CDN industry experts estimate that Apple likely pays Akamai between 10 cents and 15 cents per gigabyte of data it transfers. That means a 2-hour, 1.3-gigabyte movie costs Apple between 13 cents and 20 cents to deliver.
So far that hasn’t meant much for Akamai. Jobs says Apple has sold 7 million movies since Sept. 2006, when they first went on sale — about 437,500 per month. Assuming a 2-hour average movie, Apple’s estimated monthly hosting bill for movie downloads could be between $57,000 and $87,000 — a rounding error for Akamai, which recorded $161 million in sales during the third quarter of 2007.
So what if rentals take off? If sales doubled overnight, Akamai would be transferring nearly 900,000 movies a month, for an estimated bill between $117,000 and $180,000 — an annual run rate between $1.4 million and $2.2 million. Still not much for Akamai.
But let’s say Apple (AAPL) could someday rent as many movies online as Netflix does in the mail: 1.6 million per day. That could make Akamai an estimated $208,000 to $320,000 per day, or between $76 million and $117 million per year. We’re assuming it’d be on the lower end of that scale, since Apple would be able to negotiate even better volume discounts. But it’d be real money.