Apple is exploring the costs of launching a new subscription service for digital content. Fixed development costs are projected at $500 million, with variable content acquisition costs estimated at $100 million annually. Apple expects the subscription service to generate $1 billion in annual revenue.

Requirements:

• Calculate the total development and annual content acquisition costs for the subscription service.
• Determine the ROI and break-even subscription base for the project.
• Analyze the revenue potential and competitive landscape for digital content services.
• Discuss the strategic importance of diversifying revenue streams through subscription models.
• Evaluate the financial impact of the subscription service on Apple's income statement.
• Recommend digital content strategies to enhance user engagement and retention.