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iTMS Named Fortune's Product Of The Year
Demolition writes "To go along with Time Magazine calling the iTunes Music Store the Invention Of The Year, Fortune Magazine has come along and proclaimed iTunes Music Store as the Product Of The Year. As it says in the article, 'With the success of its iTunes Music Store, Apple is almost single-handedly dragging the music industry, kicking and screaming, toward a better future.'" Also, Fortune named the G5 one of the 25 Best Products of the Year for Design.
Apple really got something good going here. We can argue all day about DRM and AAC sound-quality and how this format won't work on most players, but you really have to hand it to Apple. They were the pathsetters here.
Look at the people trying to follow in their path. BuyMusic.com?? This is probably the most pathetic attempt of all with their wacky buying schemes and crazy DRM. Even their commercials were dead-on rip-offs.
Now here comes MS and Wal-Mart to try their hand. Sure, they are going to sell songs through their shere retailing power (and monopoly in the case of MS) but do you think their store is going to be half as cool?
I am sure this is going to set off a flamewar about the problems with iTunes, but just give iTunes their due for once for their innovation. Everybody else is just trying to catch up and be half as cool. Who do you really want to buy songs from? iTunes with its coolness factor or from Wal-Mart where that stupid smiling face can show you around and shoot arrows at your song prices so that they go from 99 cents to 89 cents.
No trees were harmed in the composition of this; however, numerous electrons were inconvenienced.
Two Things:
1) What's "it"? Why do you, as a consumer, care where Apple gets its profits? Apple is in the business of making money. It so happens that iPod and iTMS are an unbeatable suite of products. iTMS is so good, it works very well on its own, without the iPod. You're not forced into buying _anything_.
2) Apple doesn't need to be worrying about getting more money into the hands of the artist -- that's the artist's and the label's fight. Apple barely nets anything on the music sold. Why should it fork over more to the artist?
If the artists hate their labels, they should leave them and form their own "artist-centric" label. Expecting Apple, a technology company, to whip the RIAA and artists into financially-fair shape, is unreasonable.
Use the tech because it's cool. Or don't. But don't expect technology companies to move mountains.
Time Warner is also a member of the RIAA.
I smell something good for business.
Somehow, this got posted on Slashdot...
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Right now, like it or not, most popular artists are under contract with RIAA member companies. So they just can't say "see ya" and start producing and distributing music indepentently of the RIAA. It sucks, but of course the artists did sign the contract, so here we are now.
Happily, over time, it is possible for people to sell their product without the RIAA. It will take both time and sales to make it happen.
The best way to encourage that model is to buy music on-line from your favorite independent artist! But remember, don't blame the artists who aren't independent - they're likely just as depressed with their contractual obligations as you are!
I agree -- turning itunes music store into a market where anyone could put their music would be a grave mistake - the thing would get bogged down and your searches would become full of crap.
However, signing deals with smaller indie labels is far better. It means that the indie labels get a share of the profit and can start to grow a bit.
It does really seem that Apple has finally hit the nail on the head here and if they are lucky they might convert this to market share so alternate OSes at least get discussed with the 'family'..
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Since all the other players dont have anything to sell after the fact, they probably are gonna lose money with the suits taking such a huge chunk of it.
10 years from now when Apple gets the iVMS (Internet Video & Music Store) going over everyone's new FTTH 100MB and you can have tens of thousands of films on yer desktop for 99 cents ( or whatever )on top of the music you have now, thank Apple. They made it possible.
And I have no doubt that if S. Jobs is still running Apple, they'll be the only ones to get it right, just like ITMS.
I don't think Apple's cut is as big as you think it is.
I've seen figures stating the RIAA cut is 60-80 cents/song, leaving 40-20 cents per song to Apple.
I do consulting for several clients that take CCs over the net. A typical example of CC/gateway costs is 2.25% + .30 per transaction. So a .32 of a $1.00 charge is immediately taken by the CC company. The numbers vary a bit, and are lower with larger volumes, but at a minimum they're problably paying 1.25% + .20/transaction.
I suspect very few people buy songs 1 at a time -- gift certificates are $20. I personally buy about 5 songs at a time, but friends of mine might buy 1-2 albums at a time, which minimizes the bite of the transaction fees.
After that they still have to pay for bandwidth, development costs, probably a FTE or 2 for maintainence, etc.
I don't think Apple is growing rich off iTMS, and I don't think BuyMusic, Napster, HPMusic, etc. will either.
Do you even lift?
These aren't the 'roids you're looking for.
The one valid point I've seen on that site is that iTMS is helping the major record labels stay alive, and without it, the labels might have a harder time of doing so. Lots of hypothetical there, and considering that iTMS's 20 million songs sold is still nothing more than a tiny blip in the overall annual U.S. music market of some billions of songs, it warrants skepticism.
As far as the artists not getting much money out of the deal... exactly how is that any worse than what they already had? The labels were screwing them before, and they're contractually obligated to the labels, so it's not like they can just sell direct to iTMS (or anyone else) and make an "end run" around the labels. If artists sign contracts that suck, that may be their fault, it may be the label's fault, but it's certainly not Apple's or anyone else's fault.
And of course it almost completely ignores indie labels that are now getting people's music on iTMS. People who go through those labels are taking home as much as 55-60% of that 99 cents a song. That's a pretty damn good cut of the money.
Basically, it strikes me as the same sort of shrill our minds are made up, don't bother us with mitigating facts rant as that put forth by those guys who decided that just because their iPod battery wore out, all iPod batteries must suck, and it was perfectly okay to go commit acts of vandalism as a result. :)
You can rant all you like about how it's not the same...
1) They are clear, up front, about what they are offering, how it works, and what the technical restrictions are.
2) If you aren't a normal mac user, it's not as appealing to you.. realize that mac users tend to already use itunes, and use it a lot, and the store is just THERE.. in the same interface you use to organize ALL your music. You can browse the store the same way, listen to samples the same way, and once you set up your account, which is very, very easy, you can purchase songs with a click.
So.. if you feel it violates your rights, great... don't use it.
what you fail to realize is that not every consumer is concerned with owning everything.. on a tight budget, sure, iTMS is not a great deal, necessarily.... but it IS the first big, working example of how this can work. The fact that the record labels are getting all the cash is simply because all the artists signed with those labels.. did you know any artist can submit stuff to the iTMS to be sold? Those that do aren't under the grip of big labels.. their deal is with Apple.
If you were sitting in front of a Mac, in your office, with a disposable income to spend on "entertainment", you might find that making a couple clicks in the morning to get a couple new tracks to listen to suits you just fine... I mean, what does it matter to you where you can copy it if you are going to do all your listening in one place?
Actually, Steve Jobs himself said that Apple doesn't make a dime per song with ITMS.
The service pays for itself, but any money Apple gets out of it pays for maintenance, infrastructure and bandwidth.
Where Apple gains, with ITMS, is in iPod sales that ITMS generates, and the increased mindshare of Win users that have started to look more at the Apple brand for what it can offer, other than QuickTime.
If you've been on a corporate network with just a few Macs like I have, the sudden explosion of iTunes software running on Windows in the subnet appearing in music sharing list is amazing. Suddenly, 5 times as many people on the subnet are using--every day-- Apple branded software and (in some case) hardware.
ITMS and the iPod have been labeled the best marketing trojan horses any company could have thought of to increase it's mindshare.