On 7 Nov 2003, at 3:46 pm, Julia Thompson wrote:
On Fri, 7 Nov 2003, William T Goodall wrote:
On 6 Nov 2003, at 2:55 am, Kevin Tarr wrote:
*Someone had a fine critique of iTunes, how apple gets 1/3 of the money for only being a trafficker of the songs,
Stores typically have a markup of 30% or more on CDs.
How much of the store's take goes into overhead? How much of Apple's take
goes into overhead?
the record companies get the rest and only pay a small percentage to the artists, if that.
Apple actually makes a loss running the iTunes store. It makes sense because it promotes sales of the profitable iPod player, and strengthens the brand.
Tells me the overhead is significant in relation to the cost of the songs.
Thanks. :)
eTunes and Napster would appear to have a problem with their business plan :)
:)
http://www.time.com/time/2003/inventions/invmusic.html
"Jobs has one more reason not to be concerned about the competition. "The dirty little secret of all this is there's no way to make money on these stores," he says. For every 99¢ Apple gets from your credit card, 65¢ goes straight to the music label. Another quarter or so gets eaten up by distribution costs. At most, Jobs is left with a dime per track, so even $500 million in annual sales would add up to a paltry $50 million profit. Why even bother? "Because we're selling iPods," Jobs says, grinning.
That may make iTunes the most benign-looking Trojan Horse in software history. The Windows crowd can get iTunes free, and it offers almost all the same functionality as the paid versions of MusicMatch and Real One, two PC-based rivals. But iTunes is the only music application that will work with the enormously popular iPod, and it has features—like its powerful search function—that are unrivaled. "Once people are locked into using iTunes, the game's over," says Charles Wolf, an analyst at the New York City-based Needham & Co. investment bank. "They could sell an extra 2 million iPods because of this." And the margins on these devices make the Music Store's arithmetic look like child's play. Each $499 iPod returns as much as $175 in profit, Wolf says."
-- William T Goodall Mail : [EMAIL PROTECTED] Web : http://www.wtgab.demon.co.uk Blog : http://radio.weblogs.com/0111221/
"The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible."
- Bertrand Russell
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