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Apple Sells A Million Songs in Debut Week
Scrameustache writes "According to an Apple press release, the iTunes Music Store sold over one million songs during its first week. Over half of the songs were purchased as albums, and over half of the 200,000 songs offered on the iTunes Music Store were purchased at least once.
Those new iPods are selling like hotcakes too..."
I think the model may work. Let's hope it torpedoes the RIAA completely.
How much of this success is due to this being a truly significant advance in implementations versus Apple simply having a heavy presence in the market?
I'm not trying to sideline the significance of the success, I'm just questioning why it is really successful. From what I have heard, this is not all that much different than approaches that others took earlier (Didn't eMusic, the popular word among those that don't like iTunes, originally sell per song?).
Alternatively still, maybe the market is just now ready for such a store model as this. Timing is, afterall, very important in delivery of a product to market. Too early can be as devastating as too late.
well if you read the articles you will see that Apple's music store sold more songs in a week than the others have in months. Ignore the little Apple icon if you must and see it as *somebody* has possibly finally figured out a way to sell music downloads that people like. The question is how will the sales be in a few months. The Apple policy is a lot more reasonable than anyone else. None of the other services let you put the songs on a portable MP3 player, let alone burning it to an audio CD (which strips the DRM).
I'm still not sure how this service is going to make a lot of money. While a million tracks may sound impressive, you need to keep in mind that it's quite unlikely that they can keep that rate up for very long.
If the tracks were all sold as singles (they weren't) and if Apple kept all the money from the sale (they don't) AND if they could keep up their one million songs per week rate (doubtful), then by the end of a year they've made $52 million. Take out administration costs (I have no idea what they are, but I'm guessing they must be fairly significant) and the RIAA's big cut, and I'm guessing Apple would be left with somewhere in the neighborhood of $30 million after a year, and that's ONLY if they keep up the sales rate they had in their initial week every week of the year. Sure, $30 million in revenue is nothing to sneeze at, but it's not going to convince anyone that online music sales are worthwhile.
Remember, $30-50 million is equal to the revenue from a couple platinum albums, and isn't enough to finance nearly as many artists as the current model can (keep in mind that every "flop" gets subsidized by hit records). I would expect that if the recording industry were to switch to this model that MORE over-produced pop garbage would be pushed since the dramatically lower revenues would keep the companies from taking many risks with "alternative" artists. And you thought it was bad now...
1 million songs at $0.99 is about $1 millions/week. Assuming that the demand stays constant--which is unlikely as there was probably pent-up demand, as well as let's give it a try users in the first week--the total revenue for the year will be about $52 million. Although this sounds like an astounding success, it is less than 0.2 percent of Dell's revenue (FY03 revenue $35.4 billion), and less than 0.02% of Walmart's revenue ($218 billion). And it will only account for 1% of Apple's revenue.
It blows my mind that Apple has been able to improve on the iPod. As if the original's form factor was too thick (not quite as thick as a deck of cards), they still somehow cut it almost in half.
I played around with the new music service this week. Super impressively done. Having said that, I don't think I'll order any music from it. The record companies have shown themselves to be complete bastards for decades now, in how they screw over the public and the artists. I hate to think that Apple's now riding to this industry's rescue, perhaps only a year or two before the entire industry would go down the crapper. If there was only some way I could use this service with the bulk of the money going straight to the artist, I'd be incredibly enthusiastic about this whole thing.
I'm always thrilled to see Apple succeed at something, since I think they tend to make beautifully designed products. I just hope that this success isn't the event that keeps the parasitic recording industry form withering away.
I'm generally "Interesting," "Insightful," and even "Funny" here. What the hell happens to me at parties?
This is the kind of thing which Apple's control over hardware, software, and consumer applications together permits it to excel at. What is astonishing is that Microsoft has proved so poor at this kind of coordination.
Then why do people always protest Microsoft's bundling of browsers, media players, etc with the OS?
If Apple is "good" for bundling applications and not giving consumers the choice (for example, the music purchasing ONLY works with iTunes), then why is Microsoft "bad" for including IE and Windows Media Player with the OS? And can you imagine the outcry if Microsoft began selling music inside Windows Media Player? Slashdot would be screaming about the monopoly.
What's your damage, Heather?
Have you listened to an AAC at 128 bitrate? Albums of 20 songs only cost $9.99 A ten minute classical song costs only 0.99.
You can burn them to CD in straight audio format (aiff), no DRM included. After that you can do what you want, straight to mp3 and Kazaa if you feel the need... nearly as many times as you want (playlist has to change every ten burns). Every had your CD chewed up by a dog? scratched while moving? ever get a refund? isn't that what backups are all about?
Yes you are missing almost everything... you got the 0.99 a song part correct, everything else was just FUD. Insightful my arse.
A fool throws a stone into a well and a thousand sages can not remove it.
First, it's more convienent than going to a brick-and-mortar music store. I don't have to get in the car and go anywhere, I don't have to dig through the racks to maybe find what I'm looking for, and I don't have to stand in line to hand one of the pierced nation my money.
Second, Apple's pricing scheme is right on the money. Been looking for a couple of tracks? Buy just the ones you want. Want the whole album? OK then.
Third, the tie-in to the iPod is great. While I don't have an iPod yet, I can imagine how much simpler it will be to download songs from the store directly to the iPod without having to rip the CD.
I think the reason so many people steal music (and if you don't pay for it, it's stealing) is that convienence factor. I've used Kazaa on my wintel laptop and iSwipe on my iBook to grab tracks from things I used to own on tape (yes, I was probably stealing. I feel bad about it, really). It's always been a big hassle to find exactly the track I want, correctly ripped, on a site with enough bandwidth to support the download etc etc etc.
Apple has made it easy and cheap to find what I want. DRM? I don't care, because I'm not going to be reposting my songs to a P2P network. I'll be burning CD's for use in the car, and I can take a CD anywhere.
I don't forsee Apple being the big dog in the online music business forever, but, as usual, they've shown the rest of the computing world that it can be done, and the method works.
You can't have a battle of wits against an unarmed opponent.
This doesn't cut out the retail link though. It simple eliminates your local record store and replaces it with Apple.
If people get used to this kind of thing, they're much more likely to purchase music from independent artists someday - because independent artists will probably never be able to afford to get their CDs into record stores, but it won't be too much trouble for them to get onto download services.
Sure, assuming Apple don't end up with a near monopoly. This kind of thing suffers a classic network effect - can you see people joining 20 or 30 different download services to get their music? No, they'll use the ones that are most convenient - ie the ones that are integrated with their computers. I don't know for sure but I'd bet a lot that Apple won't be allowing eMusic to plug into iTunes anytime soon.
Right now the price Apple charges for getting a track onto this service is about 30-40 US cents, something around that figure. If they become a dominant middle man, who's to say that Apple won't start putting on the squeeze to up the margins just like the big bad old record companies did? They are all shareholder owned at the end of the day.
Name your own price for songs. I wonder which tunes would command the highest prices?
When I dropped by the Aple Store in Dallas last week to get my iBook serviced I was talking to the mac genius about the iTMS, iPod, and other stuff. He said that they have been getting calls literally all day from independent artists that want to get their music on the service.
I think it'd be great if that did happen: if people could get their music on the service by bypassing the record companies and the RIAA. It would practically make Apple into a music company without having to buyout Universal.