Look at this story at BBC news.. iTunes store to close maybe!!!

spooney

Well-known Member
Another story about greedy companies. :D
 
Apple make me sick. And people think Microsoft is evil, this is just another example of Apple money grabbing tactics.
 
What no free itunes songs from coke a cola any more :eek:

Oh well add the list to the many others and look at why they all have failed. :D
 

Jonstone

Well-known Member
Apple need to take a look at their bargaining position.

'If you don't do things the way we want to then we will close the iTunes store that makes us a lot of money and also helps us sell our ipods which also make us a lot of money'

It is not the strongest bargaining position I have ever seen :)
 

James.1

Active Member
Apple are currently the number one music seller in the U.S. and while I see this as just an idle threat, they're (Apple) not the only one's who will loose a great deal of income from the closure of the iTunes store.
 

jont

Well-known Member
Apple make me sick. And people think Microsoft is evil, this is just another example of Apple money grabbing tactics.

Not quite sure what point you are trying to make rovex ... the story doesn't really cover the financial aspects ...

Apple typically collects 99 cents each time a customer downloads a song, of which 70 cents is turned over to the record labels. The record labels, in turn, then typically pay 9.1 cents to the music artists who own the copyrights to the songs. Most of Apple's remaining 29 cents is used for maintenance rather than profit.

Why should Apple be forced to pay 4 cent royalty increase out of it's remaining 29 cents when the record companies are taking the 70 cents and only giving 9 cents to the artist ? ... especially in a digital environment when there are no costs for the production of discs, distribution, etc !!

Jon
 

spooney

Well-known Member
Why should Apple be forced to pay 4 cent royalty increase out of it's remaining 29 cents when the record companies are taking the 70 cents and only giving 9 cents to the artist ? ... especially in a digital environment when there are no costs for the production of discs, distribution, etc !!

Jon

Because the labels need compensation for years of mistakes and wrong strategies. The latest singer contest - sorry, of course American/British Idol - are apparently not the same as the super stars of the past and the stupid kids of these days take advantage to buy a single song instead of being forced to buy the whole crappy CD for one good single song :D
 

jont

Well-known Member
And that's Apple's fault how exactly ? ...

and these are the same companies complaining that Apple has a stranglehold on the downloadable music industry because iTunes uses DRM - yes the very DRM that the record labels insisted was applied to the music before they would license it to be made available through the store ...

Jon
 

Tenex

Distinguished Member
Apple make me sick. And people think Microsoft is evil, this is just another example of Apple money grabbing tactics.

Haven't read the detail but its like any business and especially one that is a near monopoly.


Apple need to take a look at their bargaining position.

'If you don't do things the way we want to then we will close the iTunes store that makes us a lot of money and also helps us sell our ipods which also make us a lot of money'

It is not the strongest bargaining position I have ever seen

iTunes per se isn't hugely profitable. The volume and cash generation and the spin offs in iPod sales etc is however very desirable.
 
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duke748

Active Member
iTunes per se isn't hugely profitable. The volume and cash generation and the spin offs in iPod sales etc is however very desirable.

Again not strictly true. Estimates for 2007 profits from Itunes range from 500 - 750 Million Dollars. The app store will make it harder to determine the true profits in the future.

Amazon only works on a margin of around 22%. Itunes is 30%

Steve Jobs may claim it's not profitable, but I'm sure any company would like a slice of that
 

spooney

Well-known Member
And that's Apple's fault how exactly ? ...

Sorry, Jon, this was meant to be ironic from the marrow-minded point of the labels. In the past you put one great song onto a CD and people needed to by the whole album. This was very profitable. These days people hardly buy albums but buy the songs they really like.
Some artist figured that already and instead of filling an album with let's say 12 songs to have 12 songs they put songs on myspace or whatever for download.

I appreciate this is a huge change in paradigm but all the labels come to with is to squeeze the lemon instead of thinking beyond their comfort zone and adapt to the market.

Just my 2 cents of course
 

Chester

Well-known Member
The key to the idea of raising royalty rates is in the drop in CD sales. The RIAA, supposedly representing the music industry, is interested in countering the loss by other revenue streams. Being Apple has 85% market share (and I don't see this dwindling tomorrow, you all saw the Apple iPod share of the market!), I'm sure the RIAA feel it's easy pickings to raise their take on digital sales.

Despite what gross sales figures people have seen, in order to make iTunes Store a reality requires an enormous infrastructure. That's servers, networking, development/programming, and analysts and support crew to make the whole thing tick over. Factor in that, the actual net profit that Apple make on a per track basis is negligible. What Apple are saying is that, with respect to the amount of sales they have to make, it doesn't contribute substantially to the bottom line, and therefore levying a greater royalty will make it a non-profit affair. Apple are a business, like it or not, and they're here to make money, like all businesses. So the threat to shut it down, or at least the music and movies part of it, is real.

Why music and movies... Movies don't make a profit at all! It just adds to the portfolio.

That would be a bad blow to the iPod owning community, but also the 85% market share they currently have would vanish over night, and the resulting revenue to artists with it. Now I believe something is going to have to change, but I think it's going to take an overriding institution over the RIAA to figure this out, and in the end it's inevitable that everyone will need to take a revenue hit.
 

spooney

Well-known Member
I've enjoyed using iTunes but I won't mind if iTunes closes. I hate the idea of downloads taking over.

Didn't we have this discussion a while ago on movies? I think it will be inevitable but for sure take some time.
 

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