Apple not profiting on iTunes
http://www.theregister.co.uk/content/6/33850.html
[240 byte] By [palexc] at [2007-11-9 15:35:06] 
The Reg has a good article today, Steve Jobs came out and said that Apple is eating a lot of cost to keep iTunes up, the money goes right to the RIAA and credit card companies fees.
http://www.theregister.co.uk/content/6/33850.html
# 1 Re: Apple not profiting on iTunes
extremely interesting link. it looks the future of digital music is on hold again. who's at fault? does it surprise anyone that it's the RIAA, yet again?geistwerks at 2007-11-15 17:31:14 >
# 2 Re: Apple not profiting on iTunes
Nope the RIAA greedy Sons of a guns, are opening their wallet and wanting people to give them all this money for bs reasons, and the artist has to get their money by going on tour. I'm dissapointed, in the way this going, the music industry has to keep moving forward, but the RIAA is just a big brick wall in the way. =( .Chadian22 at 2007-11-15 17:32:10 >
# 3 Re: Apple not profiting on iTunes
well if apple isnt making much money, think about Napster and all the other music stores!armless at 2007-11-15 17:33:20 >
# 4 Re: Apple not profiting on iTunes
steve jobs has already pointed that out. napster does have a sort of partnership with samsung, but who really wants one of those ugly samsung mp3 players anyway?geistwerks at 2007-11-15 17:34:13 >
# 5 Re: Apple not profiting on iTunes
Actually Steve is making 10c per track downloaded, of the 99c charged. That may not be much of a margin, and there may be huge set up costs to recoup, but it's not a profit I'd sniff at, given the number of downloads per week!Jackonicko at 2007-11-15 17:35:23 >
# 6 Re: Apple not profiting on iTunes
10 cents times 100,000,000 songs downloaded may be only 10,000,000, but wait until there are a billion songs downloaded, Apple I would think would start to recoup their loses around that time.ToddW at 2007-11-15 17:36:22 >
# 7 Re: Apple not profiting on iTunes
I heard also that Intel has no profit on processors.MOCKBA at 2007-11-15 17:37:17 >
# 8 Re: Apple not profiting on iTunes
I read somewhere that Apple takes a 35% cut and the record company a 65% cut. Then the artist usually gets about 10% from royalties, which will probably be lowered because the record company makes less. Don't quote me on that.But Apple is a much larger and more powerful business than the record companies and shouldn't take this abuse from the RIAA.
slashjunior at 2007-11-15 17:38:20 >
# 9 Re: Apple not profiting on iTunes
Apple a) sells ipods, b) attracts computer buyers, c) builds a business that may itself have value separate from Apple.BUT, the pricing issue is very important for the long run. Most of the new services can't survive on these margins, so the sensible betting is that deep pockets will survive. I guess that some of the newer services will be looking to be acquired outright or molded into a jv that is really controlled by a big money player.
Given costs, it's possible that these services run at negative margins. Apple doesn't break out its accounting for the music store so you can't tell, but I would think it's essentially a marketing expense that may break even.
Apple's philosophy is surely changeable, but I see them trying to a) be the quality provider, b) trying to build the largest base possible (see Pepsi promotion) and c) trying to tie into as many "captive" markets as possible, like AOL.
Apple's biggest issue is not the expense of the ipod but the WMA format since a substantial portion of the weight of the windows world is going to fall behind WMA despite its DRM issues. I have no idea which direction Apple is going with this.
jmk at 2007-11-15 17:39:17 >
# 10 Re: Apple not profiting on iTunes
sorry, but i just dont see the advantage of downloading from itunes. i have it for free and use it to play music and put music on my ipod. i just dont see the advantage of buying the same music for the same price as in stores, just to have limited freedom with it and have no physical evidence of any cd. at least with a cd you get the actual cd thats playable in a cd player, and artist's pictures and lyrics to boot.S.O.A.D. at 2007-11-15 17:40:26 >
# 11 Re: Apple not profiting on iTunes
Originally posted by S.O.A.D. sorry, but i just dont see the advantage of downloading from itunes. i have it for free and use it to play music and put music on my ipod.
Err...maybe one of the benefits is iTunes doesn't infringe copyright laws...:rolleyes:
I am slightly worried now, because if Apple isn't making a profit on iTunes then it is unlikely that they will implement the service into Europe and the UK :(. Ahhh, I hate the RIAA. Why doesn't the government do something. All other industries are okay, what is the RIAAs problem?? Here are Apple trying to create a solution and help the RIAA solve the P2P problem and the RIAA just shovles #### right back in their face :mad:
slashjunior at 2007-11-15 17:41:24 >
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