Apple's iTunes pricing to stay at 99 cents
By Marc Perton 
posted Apr 21st 2006 10:14AM
posted Apr 21st 2006 10:14AM
Apple Computer's Steve
Jobs has apparently won his long-running
battle with the record
industry over the pricing of songs in the iTunes Music Store. Jobs has long insisted that the store's
99-cents-per-song price point should stay in place, while record companies had argued for more flexible pricing, with
newer songs going for a higher price, and catalog material selling for less. The record companies had also pushed for a
subscription option similar to that followed by most other online music stores. Now, according to The New York Post, the
record companies have largely thrown in the towel, and will allow Apple to keep pricing flat. The victory is, however,
somewhat Pyrrhic for Apple; the company makes very little money (proportionately) from iTMS, and uses the store largely
as a way to lure customers into buying iPods and lock them into its FairPlay DRM, which we all know works only with one
audio player. (Why do you think the French are
giving them such a hard
time?) Keeping pricing simple is part of Jobs' strategy to avoid losing customers to competing platforms, which have access to music stores that
offer unlimited download subscription packages for as little as $8 per month. Level pricing may help stanch defections
-- but it's not likely to produce any increased revenue for Apple, which is apparently just how they like it.
Maybe the "We dont make money with this" attitude is essential for the Apple versus Beatles/Apple Process ????
This is excellent news. The record companies may finally be understanding that Apple KNOWS what they are doing. Virtually no one is interested in non-Apple downloads or "Plays fer sher!" bollocks.
People have a choice. They can buy Zens and iRivers and Yepps and rip CDs into WMA and use Napster or Rhapsody or whatnot. Or they can go the iPod/iTunes route. Consumers have a choice. And most have chosen the latter.
Now, it is up to Apple to innovate and push iPod development a bit further. It'll be interesting to see where they take it next.
Apple's stupid not to offer a subscription option. I know a lot of people would be upset if that was the only option, but it would be a nice alternative to the flat fee per song structure. I subscribe to Yahoo Music for currently $5/month (although that's about to go up when my renewal comes around) and I love it... well, I dont love the software, but I love the unlimited access. Apple is losing money from me because I dont like their pricing structure. If on the other hand they offered a subscription for $10/month, I would drop Yahoo in a snap. Oh well.. :P
The problem with the subscription model is that you may only download two songs a month, and have to continue paying to keep those songs. With Apple's model, you download the song, and you can keep it forever.
I find that to be far more acceptable, even if it costs more in the end. I don't like to be locked into paying someone $10 a month so I can listen to my music. If I wanted to do that, I'd just get Sirius.
they may lock you into one audio player, i believe that fairplay is still the only drm that works on more than one operating system...no one ever mentions that for some reason.
hahahaha.
>> record companies had argued for more flexible pricing, with newer songs going for a higher price, and catalog material selling for less
exactly the opposite of the way CDs are priced!
Yeah, I agree with the key point that #4 makes:
When I buy something, especially something with high replay value like music, I want to 'own' it as much as possible. A system which forces me to pay a regular subscription, for music I may have bought, say, 3 years ago, cannot be the way forward.
I'm not alone in this, as I believe the non-subscription model is one of the main reasons behind iTMS's success.
Besides, why do you think the record companies are so keen on a sub model (ie: who wants to make the most money)?
Tom - exactly why I said it should be an option. :) Some people just aren't cool with the concept of "renting" music, that's fine... but seriously, once you try it out, it's hard to imagine going back to purchasing individual songs. Yes, you must keep paying to be able to play your songs, however, the fact that at any point you can go and stream any album or one of over a million songs without having to fork over more money, is very rewarding. I have discovered many new artists via Yahoo because of the subscription model, that I would never have discovered with iTunes - I wouldn't have paid to download music that I didn't know if I would like or not, ya know? I just think it's an option they should offer. Like I said, there are some people out there that it is very appealing to, such as myself.
I think that Apple needs to wake up! Services such as Napster and Rhapsody offer far more for the money. I can pay about $14.95 per month and download as many songs as I wish to my computer and my iRiver. If I decide that I want to keep them forever or for burning to a disc, it only costs me less than 90 cents per song. Cheaper than iTunes, more flexible (by far), and I am not "locked" into Apple's marketing strategy like the rest of you! Don't own an iPod and never will!
This appears to be the whole Mac vs. IBM PC thing all over again and I predict the outcome will be much the same. Apple's proprietary ways are not going to loose again in the end.
I find it fascinating that the author of this entry thinks Apple's only reason to offer fixed pricing is to keep people locked into their DRM. While that is unarguably a goal of that process, the real issue is ownership versus rental.
NEWS FLASH: You don't own your music with subscription based services!
That's right. Stop paying and you stop playing. So ask yourself, is $8 per month for the rest of your life better than 99 cents per song once?
Don't get me wrong-- If I could own my music in a subscription service I would consider it, but I'm not keen on a company dictating the price I must pay to continue listening to "my" music. One could argue that the price of buying new iPods *might* outweigh this argument ... and those people would have a good point. But at the end of the day I still own my music and I can still burn it to a CD as Audio or Data.
Yeah, the music lables know what's the right thing to do. So they argue that we thieves, er, customers want subscriptions, and paying higher prices for new stuff.
Of course, there's a tiny little factor that proves the subscription model and price increases are good...
...Apple's market share continues to increase, not decrease, in online music downloads.
Since i can get virtually every cd i want from my local cd store for less then 10$ each, i get to own the music for less then itunes (not many cds have less than 10 songs) or subscription services can offer.
This happened because NY Attorney General was looking at the music industry for online music price fixing.
Apple can price fix but the music industry cannot Apple and others what price to charge accross the board which is what they wanted to do with tiered music pricing.
Refuse to buy DRM'd music.
The big record companies only want to sell you music online if they can control what you do with it via Digital Rights Management. In principal, I don't have any problem with them using technology to prevent piracy, but DRM takes away significant rights and choices from consumers and should, in my opinion, be boycotted. There is no one standard format for DRM'd music. The iTunes store will sell you AAC files wrapped in a proprietary FairPlay DRM wrapper. While AAC is a standard format supported by a semi-reasonable number of players, the FairPlay DRM wrapper around it is owned by Apple. Except for HP who are making iPod players to meet demand, Apple have refused to licence FairPlay to anyone, whether they want to sell DRM'd music compatible with iPods or make competing music players which can play music bought from iTunes. Pretty much the only other popular DRM'd music format is WMA. Many more online stores and music players support DRM'd WMA files, but not all of them do...
Do you really want to pay money for some music that starts making choices for you about which hardware and software you play it back on in the future? What if you buy a DRM'd WMA album today and next month a kickass new iPod comes out that can't play it? Do you skip the iPod, or buy a second copy of the album? If you buy music from the iTunes store you'd better be really, really sure that for the rest of your life you're only going to buy Apple music players because it looks likely right now that nothing else will play them, HP's version of the iPod aside.
Did album prices always vary though? For some reason, I remember that all the album I saw were $9.99. Now prices, for albums, are all over the place.
Unlimited downloads of sh*t music is still sh*t. iTunes is the only store/service that offers a comprehensive selection and functional interface. No one else is even close.
What's the big deal with DRM? I think it's completely fair; I pay $9.99 for an album I can use on 5 computers. Easy to download; good quality audio.
The "flexibility" to use an other crap MP3 player with another crap service is overrated.
2 things:
1- An option for subscription would be nice, especially if I were given, say, a 10% discount on buying the track from iTunes if it was on my subscription playlist. I like the idea of downloading music I'm half-interested in to see if I like it, then being able to buy it to own it/burn it/rip it etc.
2- The RIAA wanted "newer songs going for a higher price, and catalog material selling for less".
Uh-huh. Anyone want to bet that right after they did that, 99% of their catalogues would become "newer material" and the only thing you'd be able to find for less than 99 cents would be "William Shatner sings Yanni's Greatest Hits" or the like?
Good for Apple. Someone needs to smack some sense into the RIAA.
Pay for music? Are you serious?
Never
That would be like paying for porn. LOL
NEWS FLASH #9:
Subscription services such as Rhapsody and Yahoo DO let you own music, and for less than 99 cents/song.
(Rhapsody is 89 cents, and yahoo is even cheaper at 79 cents, provided you are a subscriber. Both services charge 99 cents per song to non-subscribers)
But the real advantage to subscription services is the freedom to find new music. Like #8, I just couldn't imagine going back to buying albums before I get to hear them.
Surely I'm not the only one who's bought piles of cds at $10-$20 and never lisened to them again. Taste changes as you explore genres. For me, and for plenty of others, $10(or even $15-$20)per month is a small price to pay to scratch every musical itch.
Those hell-bent on 'ownership' have their option too. I can't help but think that they don't know what they're missing.
#14, you don't know what you're talking about.
Check out Rhapsody's selection, Virgin Digital Red Pass (they had 2 million tracks before iTunes did), or Yahoo's.
They're all comparable.
#12, I understand your hatred of DRM, but in the case of Apple/iTunes, you can burn the music you have purchased off iTunes as either an audio CD or MP3 audio CD. You can also import audio and MP3 format music into iTunes.
Contrary to what you just wrote, you do have a future with your music if you buy it via iTunes. I personally own both WMA and an iPod player and have had no problem moving music around.
iTunes really is not as inflexible as most people make it out to be. You just need to educate yourselves on how to use it. Personally I am really glad to see that all songs are staying at 99 cents. I just don't see the point in spending $10-15 for a whole CD if it only has 1-4 good songs on it. This is why the record companies are pissed. I own countless CD's that have 1-3 good songs on them and the rest are "fillers". So in reality, I paid $10-15 for a CD to listen to a few songs. At least now I feel I pay for what I want...
Long live allofmp3.com
"11. Since i can get virtually every cd i want from my local cd store for less then 10$ each, i get to own the music for less then itunes (not many cds have less than 10 songs) or subscription services can offer."
Yea, but how many of those CDs do you listen to from beginning to the end. If you only wanted to listen to 5 songs from the album, wouldn't it be cheaper to get it from ITms?
I used the Yahoo subscription as part of a 7 day trial. And while I ended up canceling (I was actually able to continue playing the songs I downloaded for 1 more month, not sure if that was glitch or not) it is a very good idea.
The nice thing was it was encoded at 192KB/s so you could actually encode again it (and remove the DRM) and still have pretty good quality music.
There are really two sides to the argument against subscription music. Sure, once you stop paying, you can't listen to the music you like. But also remember that with the $1/song model once you are sick of a song, you still have spent that $1 on it and you can't get your money back.
Lets say you had the subscription thing for a year (that would cost $5/month, or a total of $60). You downloaded and listen to thousands of songs. Some ones you really liked, others were ok, and still others were horrible. Now that your year is up, you decide that you don't want your subscription anymore, so you don't go on for another year. Now lets say that you have about 700 songs that you liked and that you want to keep. So while your subscription is still good, you just buy those songs for 80 cents each and you can keep them forever (with similar restrictions as iTunes).
Your total cost = $60 + (.8*$700) = $620
So not only in the end do you save money (if you actually buy a bunch of songs, the number of songs you need to buy a year to make the Yahoo subscription cheaper is 300) but you also get to keep the songs you like the most and don't end up buying crappy songs. And on top of all that, the subscription model encourages you to try new stuff. So at the end of it all, you have have a wider range of music that you really like for less than you would pay otherwise.
The yahoo music software isn't great, but that isn't the point. The point is that subscription does work and save money for many people.
While obviously subscription isn't for everyone, it should certainly be an option. And don't say it is a stupid idea without trying it out first (yahoo still has 7 day trial, so all you iTunes people out there could try it out tons of music for free for 7 days and then buy it at iTunes if you wanted).
So that's all I have to say.
#20---that argument is weak. Burning a compressed audio file to a CD then recompressing does not fly for may people (esp. when iTMS files are arugably low quality).
If Fairplay DRM files could be natively played on other DAPs, this would be a non-issue. But I guess people don't care since we are talking about do-no-wrong APPL.
21: I couldn't agree more... allofmp3 is so perfect - great prices, great quality, lots of formats and is semi-legal. Thats good enough for me. I don't to give a lot of money for this infected DRM shit. Music is reaaally overpriced.
>"but it's not likely to produce any increased revenue for Apple, which is apparently just how they like it."
If the record company changed the prices of the songs, it's doubtful that apple would get a larger cut of the song. Most likely the only group getting more money out of the higher prices would be the record company.
Apple is smart in keeping the prices flat, keeping their share and keeping clients.
I'm happy that Apple's not bowing to pressure from the music companies ... these dinosaurs just don't want to evolve.
FYI, Yahoo music offers a blend of subscription music to go as well as downloadable music to buy. Just because you subscribe to music doesn't mean you can't purchase music. Of course- under the subscription model you pay .79 per song. You can also burn to MP3 as well as WMA.
I think there's room for more than one kind of listener. Just as people rent movies, as opposed to buying them, others rent music. I have so many monthly services, the "music-to-go" option is just one more. For a pittance I have access to thousands upon thousands of artists and their songs.
I've heard more music (and different kinds of music) in the last couple years than I've ever heard. Absolute keepers are downloaded. If you've seen most people's music collections spanning more than a decade or so, you'll see the reason why I don't insist on burning everything :).
Choice. It's a good thing.
I think it is so funny that so many Apple iPod hating zealots take the time to bitch and moan about iTunes/iPod everytime Engadget posts an iPod related article.
Honestly, there are alternatives out there, it is not like you are living in a alter communistic music playing society where iPod and iTunes are your only choice.
We get it. You hate iTunes and iPod (even though you have probably never used one, although I bet all of you secretly wish you owned one). Great. So why do you care? If you have your wonderful little Rio WMA player and love to listen to your music from Yahoo/MTV/whatever, why in the world are you guys so obsessed with iPods? Hmmm.. I think it all goes back to your secret desires.. Yepp. You paid anywhere from $100-400 for your crappy little WMA player and are frustrated as hell that you cannot use iTunes directly.. So you take your frustrations out on the message boards here at Engadget..
Here is my advice. Go buy a used iPod, or maybe a cheap iPod shuffle so you can finally make your wildest dreams come true......
Steve: $0.99 is ol korrect!
RIAA: Let the market decide!
Avg Listener: Why am I paying at all?
DJ: iTunes doesn't offer uncompressed files (at any price), and generally doesn't carry the music I want to buy. Neither do the subscription services. Maybe I should go to beatport.com and get uncompressed tracks, including public performance royalty, for less than half the cost of import vinyl.
The market's already spoken on this one. People want simplicity, not necessarily variety. An elaborate subscription/rent-to-own model is only going to confuse most people. Do I own this song now? Can I transfer this song to my new WMA DAP? What exactly does 'PlaysForSure' mean? I understand most of the people reading here can handle these concepts, but most ordinary people would really rather not think about all that garbage. One song. One dollar. Ownership in perpetuity. Steve Jobs understand the importance of KISS, that's why he's been fighting so hard to keep it at 0.99, even tho it's probably losing him money at that point.
#24 "that argument is weak. Burning a compressed audio file to a CD then recompressing does not fly for may people (esp. when iTMS files are arugably low quality)."
Errmm... that's your opinion, you can't tell the difference once something has been digitized. You're splitting hair at this point
If you burn Fairplay songs to CD and re-rip that CD, why would you care about quality at this point? But it's YOUR SONG so you can do whatever you want to do with it.
"If Fairplay DRM files could be natively played on other DAPs, this would be a non-issue...."
Why should Apple do this? They are not obligated to help their competitor.
"...But I guess people don't care since we are talking about do-no-wrong APPL."
Well if you mean Apple offering the best DAP as being "do-no-wrong APPL"
But hey you do what you want and do not use iTMS. Apple isn't forcing you to do anything. You happy with your crappy DAP then mind your own business and keep your 2 cent to yourself.
For the complainers about Fairplay, there's this.
http://fairtunes.cjb.net/
I've never had a problem with it, sharing it with five other computers, or burning to a CD. The only time I ran into a problem was trying to create a ringtone with a bought song. Not an issue really.
I think there's another application that does something like this on other systems as well.
Frequent user of Yahoo!'s music subscription service, but would switch in a second to itunes if it offered a subscription service. I love being able to find new music, or if I hear something on a commercial, find it and play it and other songs from the artist. If I want to own it, I will purchase the CD or buy the song. I don't know why people think they are exclusive. Problem with Yahoo! is that it tends to have period glitches which are annoying, and I own an ipod. Really wish Apple would offer this.
Both sides (those for iTMS and those for subscription based services) seem to lack information about the "opposite" side, and that ignorance shows.
Both have their major benefits, one being able to play a song a few years later without having to pay the monthly fee (although based on the popular type of music sold, I doubt people will be listening to "My Humps" or "Hollaback Girl" a few years from now); the other being able to download as much as you want and being able to sample albums or singles from artists you probably wouldn't have heard of or tried out had it not been for the "unlimited" access, with the option to purchase in some cases (but once again, the "My Humps" reference comes to mind.)
One thing both sides have in common is this: Neither side owns the music. DRM makes sure of that, as does the record labels which more or less determine what happens with the music you "purchase." Until you can do whatever you want with the track, you don't own it, it's that simple so neither side should try to use that as some sort of benefit, as it truly doesn't exist.
@ 14 / K: "Unlimited downloads of sh*t music is still sh*t."
Well, seeing as the libraries are similar between all services (last I checked, most of the songs on iTMS weren't exclusives), that means iTunes has shit music as well, so you're basically paying 99 cents for a piece of shit, and multiple times over.
@ 28 / Thill: "We get it. You hate iTunes and iPod (even though you have probably never used one, although I bet all of you secretly wish you owned one). Great. So why do you care? If you have your wonderful little Rio WMA player and love to listen to your music from Yahoo/MTV/whatever, why in the world are you guys so obsessed with iPods? Hmmm.. I think it all goes back to your secret desires.. Yepp. You paid anywhere from $100-400 for your crappy little WMA player and are frustrated as hell that you cannot use iTunes directly.. So you take your frustrations out on the message boards here at Engadget..
Here is my advice. Go buy a used iPod, or maybe a cheap iPod shuffle so you can finally make your wildest dreams come true......"
No Thill, you don't get it. Not everyone wants an iPod, similar to not everyone wanting a Rio. Just because some people here prefer Rhapsody, Yahoo Music et al to iTMS, doesn't mean they "secretly wish" they had it or are "frustrated as hell that you cannot use iTunes directly."
Here is my advice, rescind the iPod fanboyism a little and see that
1) dislike of (or preference to something other than) Apple/iTMS/iPod != "secret desires" for Apple related products
and 2) dislike of (or preference to something other than) Apple/iTMS/iPod != love for Microsoft/WMA/Rhapsody/Yahoo/or any other company or format.
@ 31 / I.P.Freely : "Errmm... that's your opinion, you can't tell the difference once something has been digitized. You're splitting hair at this point
If you burn Fairplay songs to CD and re-rip that CD, why would you care about quality at this point? But it's YOUR SONG so you can do whatever you want to do with it."
If you can't tell the difference between a digitized 64kbps file and a 320kbps file, you need to upgrade your stock earbuds. If you can't tell the difference between transcoded (and subsequently re-encoded) files as iTMS, rhapsody, yahoo, & other services use a lossy file format (aac, wma, mp3), then maybe you should get your hearing checked (or "educated" as some circles say) or upgrade the stock ear buds...or wallow in the lower quality that you've become accustomed to.
...and once again, it's not your song; never was, never will be.
Has anyone tried Mp3Spy.ru?
They have albums for download for 80 cents! I just tried it and it seems pretty good(their songs are encoded w. LAME @ 192 kbps). I mean if you simply need to have imports, and cannot wait for BitTorrent or LimeWire, this is a pretty good store.
#28... I see it the other way around. I'm sitting here looking at all of these iPod/iTunes fanboys complaining about all of the other choices out there (like subscription price plans) and I'm thinking (like post #18) that they don't know what they're missing. I think iPods are pretty cool. I'd never buy one though because I don't want to pay $1 a song to listen to music. Instead, I bought a little 1GB player for $100 that I love. I pay a little bit each month and listen to all the music I want. I DON'T WANT to own it. I just want to listen to my choice of the 2 million songs out there whenever I want. If iTunes offered that, I might actually consider an iPod. For now though, I'm laughing at everyone who went out and bought an iPod because they were trendy. You're trapped in a single way of owning music that will only work on one brand of music player... for the rest of your life. If someone outside of Apple comes up with a pricing plan you might like better (subscription)... well, too bad... the service you bought your music on doesn't do that. And one day if (when) someone puts more advanced features on a music player that isn't from Apple... well, sorry but it doesn't work with all that music you've bought.
I don't write out of anger or hatred for you iPod owners. It's more of pity for you than anything else.
orly
"No Thill, you don't get it. Not everyone wants an iPod, similar to not everyone wanting a Rio. Just because some people here prefer Rhapsody, Yahoo Music et al to iTMS, doesn't mean they "secretly wish" they had it or are "frustrated as hell that you cannot use iTunes directly.""
Then why the hell do you always have to chime in when there is an iPod article on this site??? If you are so happy with whatever crappy player you have then why are you so obsessed with hating the iPod so much?
I really do not care which friggin player you own or how great you think Napster/Yahoo/whatever is. Great. Use it and be happy. I honestly could care less if Apple had 1 million or 100 million iPod users out there, I did not buy the player for its popularity, I bought it for its simplicity, ease of use, and functionality. I own several differnt players and have found the iPod to be the player that offered the best overall experience.. Looks like I am not the only one...
@34
Here is my advice, rescind the iPod fanboyism a little and see that
"1) dislike of (or preference to something other than) Apple/iTMS/iPod != "secret desires" for Apple related products
and 2) dislike of (or preference to something other than) Apple/iTMS/iPod != love for Microsoft/WMA/Rhapsody/Yahoo/or any other company or format."
Mind sharing with the group what MP3 player you use and how you put music on it (music service, CD's, etc)?
#35 o rly,
Hey, I actually do agree with you on the stock earbud upgrade point :) Personally, I have been using Sennheiser MX500 earbuds on the various MP3 players that I own (huge difference in sound quality) and was given some Bose Quietcomfort noise cancelling headphones as a gift (normally, I am not much of a Bose fan, but am impressed with these headphones, especially when traveling on airplanes).
"If you can't tell the difference between a digitized 64kbps file and a 320kbps file..."
WRONG! I wasn't talking about 64kbps vs 320 kbps. I was talking about 128kbps iTunes Music being burned to CD then re-ripping that and then worrying about quality. . if your concern is quality of sound, don't buy any downloaded songs to begin with.
..."you need to upgrade your stock earbuds."
WRONG AGAIN... Etymotic ER6
"If you can't tell the difference between transcoded (and subsequently re-encoded) files as iTMS, rhapsody, yahoo, & other services use a lossy file format (aac, wma, mp3), then maybe you should get your hearing checked (or "educated" as some circles say) or upgrade the stock ear buds...or wallow in the lower quality that you've become accustomed to."
Again Mr. Peabody... WRONG... Can you stop making assumptions??? you are making ass out of yourself. If you have already settle on download service, then you get what you pay for. I make that choice on my own, but for the CD's I own, I usually use Apple Lossless to encode... so Mr. Know-It-All STFU. No one needs your help , so stop trying to sound like you know anything.
"...and once again, it's not your song; never was, never will be."
Yes it is. you can do what you want with it. I have the ITMS songs, guess what, I can burn a CD or re-rip it. But since I wasn't starting out with Filet Mignon, I'm not going to complain when I get White Castle out of the deal.
How do Apple make very little money form iTunes, Its direct revenue - theres no shipping charge, retailing mark-up etc.... I would guess that even if the average iPod user downloads 50 songs that Apple would make more money from the songs than the hardware.
Lets not be silly here, It still = $15 or so for an album, which is exactly what a CD costs to buy, yet theres no shipping cost, packaging, retail or distribution margin etc... They and the music bods are raking it in and they have to do almost nothing for the money, ermm take the digital recording and put it on a server.
If Microsoft started offering downloads of Windows XP at current RRP would you believe them if they told you they made no money from it, cmon downloaded software runs at around 30-40% of the cost of a hard copy, why shouldnt music - 33c a track sounds mor elike it, I don't see any major artists pleading poverty - they are all driving around in gold plated Bentleys.
#41 Apple makes approximately 34 cents on a 99 cent song. The rest goes to the record company (approx 55 cents) and the artist (10 cents). When you factor in the fact that Apple develops the software and content, it means they (Apple) are making very little money off that 99 cent download. They make their money strictly on iPod sales (and it is alot of money).
The record companies make out like bandits, again...
"How do Apple make very little money form iTunes, Its direct revenue - theres no shipping charge, retailing mark-up etc...."
Because the wholesale price of the tracks they sell is around 80 cents. Their "profit" is about 19 cents per track, and that mostly goes to stuff like, you know, paying their employees. So it's not really profit at all. It's called "overhead". iTunes software development and the iTunes music store don't run themselves. (You seem to be similarly in the dark about what it actually takes to create and maintain a piece of software like iTunes, and create and maintain all the artist and album pages on a "site" like the iTunes music store.)
"If Microsoft started offering downloads of Windows XP at current RRP would you believe them if they told you they made no money from it"
If it's in their quarterly or annual SEC filings, then yes. Because if you lie on one of those, you go to jail.
Apple makes very little money on iTunes; that's a fact and you can look it up. They are a publicly traded company that is bound by SEC rules and laws and answerable to their shareholders. All of this stuff is publicly available knowledge.
Now "very little money" is a relative term, obviously, but we're not talking billions or hundreds of millions of dollars in profit here. Last I saw, they were making around $4 million per year from iTunes sales. (That may have changed by now; I think it was about six months ago the last I checked.)
As for the rest of this thread, I'm not even going to get into the relative merits of buying vs. renting music, except to say that it should be obvious by now which model the market prefers.
Why should I pay $9.99 for crummy 128Kbps files, when I can choose from 15,000 CDs shipped free for $5.99 each from www.YourMusic.com?
#4 TomTheBomb writes:
"With Apple's model, you download the song, and you can keep it forever."
Yeah, and you have to continue using iTunes and buying iPods forever!!!
Sucker!
I like iTunes.
@ 36 / Thill : "Then why the hell do you always have to chime in when there is an iPod article on this site??? If you are so happy with whatever crappy player you have then why are you so obsessed with hating the iPod so much?
I really do not care which friggin player you own or how great you think Napster/Yahoo/whatever is. Great. Use it and be happy. I honestly could care less if Apple had 1 million or 100 million iPod users out there, I did not buy the player for its popularity, I bought it for its simplicity, ease of use, and functionality. I own several differnt players and have found the iPod to be the player that offered the best overall experience.. Looks like I am not the only one..."
More vacuous accusations courtesy of Thill.
Do I always "chime in" every iPod article on Engadget?
If you're so happy with your wonderful iPod, why bother commenting on (what you consider) "crappy" players (which you also claim to own)? Is there an obsession with what everyone else *doesn't* have or *doesn't* use, or in your opinion "secretly desires to own?"
If you don't care, why bother with your post in the first place? Post 29, made by you Thill, was all about what other people use (or don't use), yet you claim not to care. Honestly enough, I wouldn't even have addressed you had it not been for post 29 (as you noticed I didn't address post 21, as the theme in that post is completely different to post 29.)
@ 37 / tommyboy : "Mind sharing with the group what MP3 player you use and how you put music on it (music service, CD's, etc)?"
According to Thill I use a Microsoft MP3-WMA player with Microsoft's subscription/rental/download service, and the reasoning behind this is because I may or may not own an iPod which I may or may not use with iTMS.
@ 40 / I.P.Freely : "WRONG! I wasn't talking about 64kbps vs 320 kbps. I was talking about 128kbps iTunes Music being burned to CD then re-ripping that and then worrying about quality. . if your concern is quality of sound, don't buy any downloaded songs to begin with.
WRONG AGAIN... Etymotic ER6
Again Mr. Peabody... WRONG... Can you stop making assumptions??? you are making ass out of yourself. If you have already settle on download service, then you get what you pay for. I make that choice on my own, but for the CD's I own, I usually use Apple Lossless to encode... so Mr. Know-It-All STFU. No one needs your help , so stop trying to sound like you know anything.
"...and once again, it's not your song; never was, never will be."
Yes it is. you can do what you want with it. I have the ITMS songs, guess what, I can burn a CD or re-rip it. But since I wasn't starting out with Filet Mignon, I'm not going to complain when I get White Castle out of the deal.
Sorry, but if you own Ety's (even the lower end ones) and you are comfortable with 128kbit aac (a LOSSY format) and decoding it to CDDA, then re-encoding it to MP3 (or any other LOSSY format), you've pretty much embarrassed yourself, and lost any credibility you could've had regarding audio quality; then again, you did say "you can't tell the difference once something has been digitized." Maybe you should go back to stock earbuds, as you seemed to have wasted your money on Ety's (since 128kbps aac -> cdda/wav -> mp3 makes no difference to you, nor does 128kbps aac in general (your beloved White Castle which you probably do mistake for filet mignon.))
...and no, you still don't own the music; you might want to look up how the record companies work in regards to "owning" music and your "rights," hint, it's similar to the movie studios and software companies.
Post again I.P.Freely, as you'll do most of the work for me, don't forget to contradict yourself by mentioning Apple Lossless.
#48
"If you don't care, why bother with your post in the first place? Post 29, made by you Thill, was all about what other people use (or don't use), yet you claim not to care. Honestly enough, I wouldn't even have addressed you had it not been for post 29 (as you noticed I didn't address post 21, as the theme in that post is completely different to post 29."
Umm.. I did not author either post 21 or post 29.. Looks like your eyes are as bad as your ears due to the hearing loss you experienced from when you are listening to your WMA Rio player too loud...
By the way, you are not fooling anyone with your arrogance and know-it-all attitude. We know the reason why you are so obsessed with calling everyone an Apple fanboy.. Because you want to be one..
See you at the next Engadget iPod post (if not before)..
The only reason Apple doesn't want a subscription model is because they want to lock you into their own DRM. If you paid $15 a month for unlimited songs from iTunes, whats to stop you from buying a Zen and paying $15 a month for unlimited songs from Yahoo? Nothing, and that's not what Apple wants. The subscription model is so much better, and it's a shame that so many people are worried about "losing" music to try it out.
my two cents...
as poster before me said YourMusic.com offers CD's for $5.99 per CD. You can get 3 CD's at RodaleMusic.com for $19.98 ($6.66 each).
I have two IPod's now (the newest one is a 5th Generation IPod Video). I used my first IPod -- a 2nd Generation Mac IPod -- on a Windows 98 Second Edition PC with XPlay. I had to go through a few hurdles to get songs on my first IPod (it was not hard to break the protection of the AAC/m4p format -- I converted files to m4a and then to mp3). I later converted my first IPod into a PC IPod when I started using it with a computer that had Windows XP on it.
I have purchased songs from MSN (when Rock Star: INXS was on the air) and put them on my IPod. Microsoft has provided the instructions on how to do it before (although they don't blatantly advertise it) -- you just rip the wma file to a cd and it is converted to an mp3 file. I have considered buying the Oscar-winning Three 6 Mafia song from a vendor other than ITunes (i.e. MSN or Walmart) because ITunes wants to sell me the entire soundtrack album and not the individual song that I want.
But my favorite subscription site is EMusic -- I signed a one-year agreement (and I have already been billed for the entire year). And I get 90 tracks per month (1,080 tracks in a year) -- for $192 (or $16 per month). I'm so happy I am going re-new my subscription in August for a full two years (for $360). Subscriptions start at only $10 per month, and they give you a hundred songs free in mp3 format just to try it out. They require a credit card, but cancelling is easy and online (no phone call required).
http://www.emusic.com/sunfest
#43, #44
Develops the software and the platform? Err... the software is the song and the platform is the internet/your hard drive. Its eems you know very little about how easy it is to get someone to strema song to their hard drive (whilst they are paying for the internet connection/bandwidth).
19c a song you say!
250 million songs downloaded at 19c a song, hmm... how does that = $4 million , more like 50 million $ in - unless you are saying that the iTunes platform cost $46 million to develop when I've seen more competent software available for free.... Its pure profit, all Apple pay for is bandwidth (probably 1c per song max).
#52 you're clueless. When a business has Internet servers that file transfer a song to you (it is NOT streaming!), then there are lots of expenses: employees, server computers, electricity, site lease/rent or data center fees, maintenance, etc. That costs real money. This means that revenue from songs is NOT pure profit.
The only reason Apple doesn't want a subscription model is because they want to lock you into their own DRM. If you paid $15 a month for unlimited songs from iTunes, whats to stop you from buying a Zen and paying $15 a month for unlimited songs from Yahoo?"
Only the quality of apple's iPod.
I bought a Creative player a few months ago, because it was one of the best subscription compatable players. I'd have surely chosen an iPod instead, if iTunes offered subscriptions.
Furthermore, apples lack of a subscription option was a large factor in my decision to purchase of a windows laptop, instead of a powerbook. (No subscription services are compatable with tiger)
I'm sure I'm not the only customer apple has lost due to its rigidity.
"I would guess that even if the average iPod user downloads 50 songs that Apple would make more money from the songs than the hardware."
Apple's iPod profit margin is roughly 50%, meanwhile every song Apple sells, they get a mere 10-15 cents a pop.
#50
"If you paid $15 a month for unlimited songs from iTunes, whats to stop you from buying a Zen and paying $15 a month for unlimited songs from Yahoo? Nothing, and that's not what Apple wants. The subscription model is so much better, and it's a shame that so many people are worried about "losing" music to try it out."
So instead, you're locked into Zen/Yahoo/Creative/Plays-for-like-Sure-totally -man!'s DRM. Soooooo much better.
The Itunes model is so much better IMHO, not to mention the fact that the store/software and player are so well integrated. It would be very hard to tempt me to move elsewhere.
I think the fans of the rental model are only those that have the desire to/have the time to sample lots and lots of different music on a monthly basis, enjoy it and then move on.
I listen to really only three genres of music (Classical, Contemporary Christian and Folk) and the amount of new music that I listen to is like 1-2 songs per month at best. Once I purchased my favorites library from Apple, its a trickle of business for them from then on.
I am willing to bet there are a lot more music consumers out there like me, then the very active rental model types.
Anyone who would pay 99 cents for a track of music is an idiot.
One of those 60Gb iPods is supposed to hold 15,000 (4 min) songs and, at .99 cents that would make the iPod worth $14,850 when full...so NOBODY fills their iPod from iTunes. That would make the iPod worth more than most people's cars!
Even the Nano holds over $900 worth of Apple tracks. It is no wonder that those white cables attracts muggers.
I think the majority of people DON'T pay 99 cents/track but they simply rip CDs (that they own or borrow) or find their tracks from 'alternative sources'.
# 58 "I listen to really only three genres of music (Classical, Contemporary Christian and Folk) and the amount of new music that I listen to is like 1-2 songs per month at best. Once I purchased my favorites library from Apple, its a trickle of business for them from then on."
Sound's pretty stagnant.
"I am willing to bet there are a lot more music consumers out there like me, then the very active rental model types."
That may be true, but many of us "active rental model types" would like to use iPods. They are fantastic players. I just wish I had the *OPTION* to subscribe from iTunes. If apple's music store would finally evolve, I'd switch in a heartbeat.
As would plenty of others.
Wow, ain't this fun....I think I need to respond to I.P. Freely's statement (#33)....
I do not blame Apple for anything...this is pure captialism. I would expect nothing less than for them to do what they can to make the most money (in this case sell the most iPods). Also, I believe the iPod is a good product..the best is just a matter of opinion.
My comment is more oriented to how iTMS' products limit opinions. I do not buy them b/c of this. I would rather give my money to a Rusian mp3 store so I can play them on anything I like without the hassle and loss of quality of burning then re-ripping.
I cannot believe you are arguing that the loss of quality is nil....WTF...do you understand how compression works? Your statement "you can't tell the difference once something has been digitized. You're splitting hair at this point" is flawed. Just b/c it is digitized does not mean that a recompressed digital file has the same quality as the original digital file. Compressing a file literally removes information....depending on how it is done, the effect is negiliable, but repeated or compressed severely, it is obvious, esp. with particular music and hardware. Try that process to a iTMS file 10x and report back.
I like Apple (products, leadership and company)...but at the end of the day, iTMS limits people's options. What if you could only play Sony CDs on their cd players? If their hardware was superior, would this be alright? Maybe. But when (or if) another company released a superior player, you would feel some pain.
The term, "do-no-wrong APPL" obviously struck a chord...I was merely musing that if we swapped only Apple with Microsoft (or iRiver or Rio or etc.) here, I find it hard to believe everyone would be on the same side.
Anyway, the market speaks as users don't mind this paradigm...so be it.
Apples profit is not 50% from iPods, I personally am involved in the distribution and knoiw that Apple dont even get 50% of the cost full stop, let alone ptofit.
#53, If I stream a song to your hard drive, then youhave it, full stop - Are you 5 years old that you dont understand that once information has come form another computer to yours (streaming) then it CAN be yours forever. Your listing electricity and employees as a big expense, grow up - how many times have you ever heard of electricity expense as being a reason that a blue-chip company didn't hit profitability. I never said it was real profit, like I said they probably pay 2.5% or so to 'stream' that music to you computer. Engadget.com probably puts out as much bandwidth as an Apple song per article, Im not paying 99c for every article I read.
If what you were saying was true, how come I can get a whole album transferred to my computer from a Russian Server for 5-10% of the price of iTunes, dont they have to pay electricity?, Bandwidth?, Data Centre fees etc... Your argument falls flat on your face there.
this posting inspired me to add more money to my allofmp3.com account :)
Hey "o rly" as dumb as you are I am going to explain this one more time.
I do not turn ITMS -> CD -> AAC nor do I say you should do such thing. But if you want to strip DRM off ITMS, this is the way you would do it.
However, if you do it, do not complain the sound quality.
Going from WAV -> MP3/ITMS
- BIG difference in quality
- Your starting point is excellent and ending at average.
Going from ITMS -> CD -> AAC
- SMALL difference in quality
- Your starting point is average and your ending up at below average.
That is the point I am making. I'm not talking about merits of encoding, I am talking about what you start with and what you end up with. And as far as any normal people are concern, going from ITMS -> CD -> AAC, MP3, for that matter any format, doesn't matter because going from bad to worse is not that big of a difference.
So you're a f-ing idiot to assuming that I am advocating this. which I don't.
Plus there is nothing wrong with Apple's Lossless, I don't want to use uncompressed media on my iPod, so I prefer this format. If you can distinguish the differences, more power to you, Bionic Woman.
Whether you own or "rights" to music, as far as I'm concern I own it to do what I want to do with. I don't go around giving it out to people.
@ 50 / Thill: "Umm.. I did not author either post 21 or post 29.. Looks like your eyes are as bad as your ears due to the hearing loss you experienced from when you are listening to your WMA Rio player too loud...
By the way, you are not fooling anyone with your arrogance and know-it-all attitude. We know the reason why you are so obsessed with calling everyone an Apple fanboy.. Because you want to be one..
See you at the next Engadget iPod post (if not before).."
Are you talking to me (currently #49) or #48 (Bren) who said "I like iTunes?" Based on the amount of time you've been here, you know very well that posts get bumped and numbers get changed, so using "I did not author either post 21 or post 29" is a pretty sad excuse to try to get away from the questions asked, which is typical of you, as you've done it many times before (make an accusation, get called on it, then try to change the subject).
As per my attitude, I've never stated that I knew it all (however I may know a little more than you,) nor have I called everyone a fanboy; once again, if you can provide any sort of proof to your claims, please post the link, but by your current track record, you won't back anything up, just continue with more deficient accusations.
Until your next accusation.
@ 65 / I.P.Freely : "Hey "o rly" as dumb as you are I am going to explain this one more time.
I do not turn ITMS -> CD -> AAC nor do I say you should do such thing. But if you want to strip DRM off ITMS, this is the way you would do it.
However, if you do it, do not complain the sound quality.
Going from WAV -> MP3/ITMS
- BIG difference in quality
- Your starting point is excellent and ending at average.
Going from ITMS -> CD -> AAC
- SMALL difference in quality
- Your starting point is average and your ending up at below average.
That is the point I am making. I'm not talking about merits of encoding, I am talking about what you start with and what you end up with. And as far as any normal people are concern, going from ITMS -> CD -> AAC, MP3, for that matter any format, doesn't matter because going from bad to worse is not that big of a difference.
So you're a f-ing idiot to assuming that I am advocating this. which I don't.
Plus there is nothing wrong with Apple's Lossless, I don't want to use uncompressed media on my iPod, so I prefer this format. If you can distinguish the differences, more power to you, Bionic Woman.
Whether you own or "rights" to music, as far as I'm concern I own it to do what I want to do with. I don't go around giving it out to people."
Although Pablo already dealt with you in post #62, I'll add a little more.
Good try at backpedaling about not re-encoding iTMS files, but you've already said "you can't tell the difference once something has been digitized. You're splitting hair at this point" so re-encoding must really not matter to an "audiophile" like yourself even when it's a "SMALL difference in quality" because you go from "average and your ending up at below average."
Somehow you'll try to "explain" it to me, yet you don't seem to make much sense, as your posts are contradictory.
Of course you aren't "advocating" the use of re-encoding an iTMS file even if you said "you can't tell the difference once something has been digitized" and "because going from bad to worse is not that big of a difference." ...and this coming from someone with Etymotic ER6's...
If "you can't tell the difference once something has been digitized," it's apparent that Apple Lossless is lost on you.
Because the record companies are for subscription services, I am against them. I don't care what they say, I don't steal music, and I don't give music to other people. If you are that bothered by ITMS drm, then there are several programs out there to remove it.
Second, why would you pay to listen to music and then buy it, when you can "be introduced" to new music any where on the net. Subscriptions, are just a way to restrict what we can do with our music, and make more money while giving us less choice.
"So instead, you're locked into Zen/Yahoo/Creative/Plays-for-like-Sure-totally -man!'s DRM. Soooooo much better."
Umm, you're not locked into anything. You stop paying the $15 a month and you can switch to whoever you wish. Subscription models don't "lock" you in because you're not stuck with hundreds of dollars worth of music that only play on PFS or FairPlay compatible players. You can switch around as often as you want.
For the record, I do not think the IPod is a bad product. Certainly, that nifty clickwheel is the best navigation tool on any of the players I am familiar with.
And that's about it.
The main reason the IPod is so successful is the same reason many mediocre (or worse) products and ideas are successful -- marketing. Most people are sheep. You're told by a self-appointed God, Steve Jobs, that nobody wants subscriptions, and therefore nobody wants subscriptions. You think that if you have a subscription plan, somehow you've made a pact that you can never buy any of the 1 - 2 million songs you can sample through that subscription. Huh? Does this make sense?
There is so much music out there that gets virtually no exposure, and yet so many people buy the crap they are told to like. I get to hear whatever I'm even slightly interested in and decide what's worth my money. Which sounds more appealing to you?
It's a shell game. Steve Jobs is a brilliant marketer/conman. He even managed to convince people that the Shuffle was good because "life is random". He took the weakest feature of that player, the lack of a screen, and used it as a marketing ploy. And it sold big time. Heaven help us if he decides to work for the GOP.
If you like the IPod, I'm happy for you. But like it because you like it, not because the mindless media in this country says you should.
When Urge comes out, embedded into the newest Windows Media Player and with the marketing support of Microsoft and MTV, the subscription model will start to take hold. And then Jobs will either have to rethink his subscription stance or have to deal with a competing marketing onslaught. And if he does change his take on subscriptions, how many of you subscription haters will suddenly love the idea?
Until then, enjoy your clickwheels.
a point nobody's made, so i thought i would introduce it to the discussion. A nameless record exec in the article asked: "Where in life does the retailer set the price of the content?"
Wal-Mart. Wal-mart uses it's world's-biggest-retailer status to pressure manufacturers (contet providers) into lowiering production costs on the product/content, as part of the company's plan to cut prices for consumers by cutting operating costs.
of course, likening Jobs' insistence on keeping itunes subscription-free (which it isn't - lifetime subscription is just included in the retail price of the ipod, but itunes sans-ITMS allows for non-tethered music files from ripped cds, filesharing, etc) just opens up a whole new can of worms.
my own ipod/ITMS stats: i have a 20g ipode photo, 1533 songs on it so far. I've purchased between 15-20 of them from ITMS, the rest are from my music collection as it stood before i bought an ipod.
i agree with the theory that most ipod users aren't buying a lot from ITMS. mine is mostly a way to keep all the cds i like in a single small portable unit i can play in my car and cubicle. no hunting for discs or the like.
you can own, use and enjoy an iPod and NOT buy anything off of iTunes. If your so upset at DRM then buy CD's and load them into iTunes and your iPod.
You have options.
I like the convenience of purchasing songs on iTunes and creating my own CD's or Playlist's in which I wanted and like EVERY song. Clearly the business model is working and catching on for a majority of the people.
If you hate it then buy a Sony bean and enjoy Play for sure.
.99 cents in still over priced considering we're talking Digital copies: Copy, Paste, done. It's almost free to do at the distributor level. I don't want to spend hours dowloading music either in a subscription service like Yahoo! regardless if it's $5 or whatever per month. We all know it's dirt cheap to cut a CD as well, but either way the RIAA should be kissing Steve Jobs ass for putting digital music downloads in the respectability sphere. Jobs should create his own music licensing company, so artists and new artists do not have to go through RIAA. I'm sick of the industry cabals telling me what to do. If you want my mula, ask me what I'd like for a change ... or maybe just once!
I like itunes.
I like even more emusic.com, which is a subscription based service which asks subscribers to pay $10/50 downloads a month and up (I pay $15 for 65). Users download songs, either individually or by album, and can cancel at any time, still keeping the songs they've got. Tracks are compatible with most mp3 players, including the ipod, and you can burn copies if you prefer to listen on CD.
I still buy songs on itunes every once in a while, and I find the user interface preferable to other online music services, but if I download, emusic is my first choice these days.
Holy f#@k, I had no idea that the subcriptions were that lame. I thought you pay a monthly fee to download whatever you want, then it's yours. I never heard anyone talk about how you're just renting the music. Wow wow wow the idea makes me nauseous ~ ugh. Everytime I read about recording industry in the news I hate them more and more. I used to buy lots of CDs, lots of DVDs (I own over 400 DVDs), but screw that, I don't want to support these greedy sons of bitches anymore. RIAA/MPAA you make me sick, F#@K them anyway we can I say. It is our moral obligation not to support greedy nasty corporations who corrupt our government by buying whatever laws suit their whims.