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Napster Sells 5 Million Songs

mattmcal writes "CNet reports that Napster has already sold 5 million songs. The number is impressive despite lagging behind Apple which maintains a 56% market share according to SiliconValley.com. The integration with portable devices must play a key role in the download volume which Apple has also developed for the mini iPod."

88 of 340 comments (clear)

  1. question.... by Anonymous Coward · · Score: 5, Interesting

    Are these 5 million indivually-packaged 99 cent songs, or are they including songs shipped out under subscription plans as "sales?"

    1. Re:question.... by wo1verin3 · · Score: 3, Informative

      According to the press release it is seperate. They've broken up the revenue streams in to categories, sold downloads and subscriptions are seperate.

      LOS ANGELES, Calif. - February 23, 2004 - Napster(R), a division of Roxio (Nasdaq: ROXI), today announced that it has recently become the first PC-only digital music service to sell over five million downloads. The Company also announced that it has served hundreds of millions of page views since its late-October launch and has attracted over 1.5 million basic and premium members. Napster, which generates multiple revenue streams from a unique combination of single and album downloads, prepaid download cards, premium subscriptions and the licensing of its popular brand, is expected to generate at least $20 million in music sales in its first year.

    2. Re:question.... by Ryosen · · Score: 4, Interesting

      Hmm...5 million songs sold to 1.5 million users. While the numbers might sound impressive that only breaks down to just over three songs per user. That doesn't speak too highly of their offering.

      --

      Ryosen
      One man's "Troll, +1" is another man's "Insightful, +1".
    3. Re:question.... by asdf+101 · · Score: 5, Interesting

      More important than the sheer volume of songs is the profitabilty of iTunes vs. that of Napster.

      Apple is looking at iTunes, not to earn millions from pennies++ over every song they sell there, but rather to obviously profit from the hefty margins on the iPod sales they generate when they dangle the "lifestyle" and "portability" carrot "via" iPod through iTunes.

      So the question is basically, even after having gotten to 5 million, just how well are those volumes working for Napster vs. the volumes that iTunes has (even is you assume for a moment that iTunes has sold just as many songs)?

      The Answer: no comparison. Napster should be lagging far behind. Because iTunes revenues are miniscule compared to those from the iPod sales that iTunes generates invariably from use of its iTunes store.

      Only stating the obvious.

    4. Re:question.... by pikkumyy · · Score: 3, Insightful

      I disagree. Average three songs per user is a huge amount when considering that probably all of these songs are available via eMule and others for free.

      Also the "7-day free trial" must have made a number of curious people register without purchasing anything. So I'd say an average *money paying* user has purchased an album's worth of music.

    5. Re:question.... by hpavc · · Score: 2, Insightful

      Agreed, its well known ITMS doesn make money *PROFIT* on its music sales directly. If this is true and volume doesnt matter. Napster has to be bleeding.

      Frankly I would think ITMS would have better negotiation ability for costs as wel. Napster just doesnt seem to me as having the ability to get a the best deal. Given their history and all.

      --
      members are seeing something, your seeing an ad
    6. Re:question.... by timeOday · · Score: 2, Informative
      Agreed, its well known ITMS doesn make money *PROFIT* on its music sales directly.
      Correction: it is well known that Jobs once stated that, at the time, ITMS wasn't making money off music sales.
  2. Apple surely have this one sewn up by Space+cowboy · · Score: 4, Insightful
    • They're running at a low cost (at least in their terms :-)
    • they've got a reputation for 'cool' design
    • It's easy for them to match the h/w and s/w
    • They were there first, at least with a viable legal business model


    Everyone else is an also-ran for the forseeable future, IMHO. It'd take a pretty big hitter (and Napster aren't big enough) to break it, with a significant investment. Frankly Apple are doing what the RIAA etc. should have paid someone to do a long time ago...

    Simon.
    --
    Physicists get Hadrons!
    1. Re:Apple surely have this one sewn up by OmniVector · · Score: 3, Insightful

      and apple also claims they make no money off iTMS, but use it as a way to sell iPods which they do cash in on.
      companies like napster have quite an uphill battle.

      --
      - tristan
    2. Re:Apple surely have this one sewn up by TedCheshireAcad · · Score: 2, Insightful

      I don't see how Napster (Roxio) is making any money on this. Apple breaks even with the iTunes Music Store, and they just use it as a vehicle for selling iPods.

      ...Of course, Napster is into the college student extortion program now. It's odd, everyone tries to screw college students, and our niche was being able to screw the recording industry, oh, how the tables have turned.

      ...where is that Pepsi cap?

    3. Re:Apple surely have this one sewn up by GatorMan · · Score: 2, Interesting

      When it comes to PC and device design in general, Apple is a leader and everyone else is an also-ran. Finally this time it's paid off.

  3. Imagine how many songs if HP would have stayed? by rueben · · Score: 5, Interesting

    If HP had stayed by Napster's side, I wonder how much more successful things would have been... It is good to see more companies adopting online music downloading for a price, while the RIAA campaigns against it, however it would be nice to have some stiff compatition against iTunes. Remember, competition is a good thing..

    1. Re:Imagine how many songs if HP would have stayed? by Turd+Rippleton · · Score: 3, Funny


      yeah... I'm sure HP is kicking themselves for joining apple instead.

      ~Turd

    2. Re:Imagine how many songs if HP would have stayed? by b-baggins · · Score: 2, Interesting

      Excuse me? HP picked Apple BECAUSE of competition. Apple competed with Napster and Apple won.

      --
      You can tell a great deal about the character of a man by observing those who hate him.
  4. Numbers Game by Liselle · · Score: 5, Interesting

    Since Napster has a subscription-based service in addition to selling individual songs for a fixed price, what does "5 million songs sold" mean? TFA is useless for this. Are they counting the songs that people download under the monthly-subscription model as songs? If so, it's not quite as impressive, no?

    --
    Auto-reply to ACs: "Truly, you have a dizzying intellect."
  5. Not from me by Anonymous Coward · · Score: 4, Insightful

    They did not sell any to me. I was looking to buy some songs, but Napster's meagre catalog did not have them. They were only available via "outlaw" p2p.

    If the RIAA is going to stem piracy and make money, they should actually take some effort to sell the music.

  6. Great! by nicedream · · Score: 5, Interesting

    You know, I don't care as much who comes out ahead in the online music store wars, just as long as they are seen as a viable alternative to purchasing shiny plastic discs at the mall.

    I just got an iPod mini on Friday and was playing around with iTunes. I NEVER intended to pay for digital music, and always expected I would just get it from Kazaa, etc. But when I saw how easy Apple makes it to buy music, I was hooked. I spent about $35 on music, and this is someone who buys 1, maybe 2 cds a year. Things are only looking better from here.

    1. Re:Great! by Unwise+One · · Score: 5, Interesting
      A similar comment from another angle.

      I hate buying CDs, or at least new ones. The idea of paying $10 to $20 for an album when there are likely to be only one or two good tunes on each one was enough to keep me away except for Xmas shopping.

      For personal reasons, I never liked stealing the music via Napster/Kazaa/Whatever either.

      With iTunes I have spent more this year on music than I have in the last two or three combined. Heck, I've even downloaded songs I used to own on cassette many years ago.

      I've heard from audiophiles that the quality is less, but to my tin ear the sound of the download burned to CD and that of a store-bought CD is identical.

    2. Re:Great! by nicedream · · Score: 4, Insightful

      Ok I'll try to look over the simplistic nature of your comment and explain why:

      1. Ease of use - No more trying to track down songs and not being able to find them for months. If I see it on iTunes, I can have it right then. This is especially good for full albums.

      2. Good quality - No more 56kbps mono files mixed with 192kbps stereo files. No more shitty rips with skips in them.

      3. Uniform ID3 tags - Nothing pisses me off more than opening up an MP3 I just downloaded and seeing the album name or artist name is "++{Ripped by tHe eNfOrCeRz}++" or something equally lame.

      4. Probably some other stuff that I can't be bothered to think of at this time.

      In the end, it's worth it to me.

  7. Subscription? by erick99 · · Score: 5, Informative
    In one of the articles....

    "Gorog said he resists comparisons with other subscription services because of incongruities in the way subscriber numbers are reported. But he expects the business will mature as users realize it's cheaper to pay a flat fee for access to 500,000 tracks than to pay $1 a song."

    It's important to note that you still have to pay if you want to burn a song to a CD or otherwise use it outside of your computer. You do, however, get to use the song on up to three computers. Just a point of clarification because the article might lead one to believe that for a subscription fee you get unlimited downloads to use as you please and you really don't.

    Keep Smilin'!

    Erick

    --
    http://www.busyweather.com/
    1. Re:Subscription? by pixelbend · · Score: 2, Insightful

      Apple == You own data.
      Napster == Your rent data.

      Who want's to do that?

      --
      Prospective station wagon buyer: "I know what you say is true...but...er...I don't know how to maintain a tank!"
  8. Re:purchase songs? by Anonymous Coward · · Score: 2, Insightful

    Why buy a car? There's loads of them in the street - take whichever one you fancy!

  9. gripes. by DarkHelmet · · Score: 4, Insightful

    Sorry, but I'm still not turned on to the idea of online music downloads.

    1. To me, $0.99 per song is still a jack. If a track has 13-15 songs per album, that's $13 - $15 for all the tracks on the CD. Considering that I get no artwork, no packaging, no permanent format, that's a rip off.
    2. The file format is lossy. I'd be paying for a lower quality representation than what I could buy at a store for the same price.
    3. DRM is a bitch.
    4. I can get the same thing, or a higher quality version online.

    Sorry, but there has to be some more incentive for me to buy into the system.

    1. $0.50 a song is a good starting point, $1.00 for a FLAC version of the song.
    2. Printout art available when purchasing all the songs on the CD.
    3. ISO downloads. A lot of CD's come with extra's for the PC. Quite simply, it's one of the things that makes me buy the CD rather than just donwload the song (other than actually liking the band). Add this, and I'll start reconsidering.
    4. Stop being a bitch about giving this stuff to my friends. Do you know how many friends I've turned on to certain groups of music just by giving them a song? *cough* WeedShare anyone? Apple and Napster can learn from this.

    Yeah, yeah, yeah, the arguments are very old in this post, and it's all been said before. But nothing's being done, and I'm still not being converted over. Considering how much of a computer user I am, this is rather surprising.

    --
    /^[A-Z0-9._%+-]+@[A-Z0-9.-]+\.[A-Z]{2,4}$/i
    1. Re:gripes. by displaced80 · · Score: 5, Interesting

      A couple-few of those points aren't a problem (at least with iTunes)

      Each song may well be $0.99, but a full album is most often $9.99.

      You do get artwork. It appears right there in iTunes. Not tried it, but you can most likely copy & paste (or just drag) it to save/print it. There's a host of programs (including AppleScripts for iTunes on the Mac) which makes automating that a breeze.

      The format's lossy, true. It's up to you if you can't possibly stand less than 44,100/16-bit.

      The extras is a good point. But then I don't see online music stores as replacements for real CDs, just complimentary.

      If I want to share purchased music with friends, I create the playlist of my eeeeeevil DRM music, and click Burn. I can hand over the CD physically, or ISO it or re-rip it for sending electronically.

      --
      What's the frequency, Kenneth?
    2. Re:gripes. by shidoshi · · Score: 2, Informative

      >To me, $0.99 per song is still a jack. If a track has 13-15
      >songs per album, that's $13 - $15 for all the tracks on the CD.
      >Considering that I get no artwork, no packaging, no permanent
      >format, that's a rip off.

      Picked at random: Maroon 5, their album Songs about Jane. 12 tracks. Album price, $9.99.

      If you buy each track individually and end up paying $12 instead of $10, that's your choice.

    3. Re:gripes. by Anonymous Coward · · Score: 5, Insightful

      You say "converted" like you need to choose between the two. What is the problem with buying full physical CD albums for when you want the whole she-bang, and going to iTunes when you want a one-shot song you heard on the radio for a buck? Physical CDs and digital music are not mutually exclusive, friend.

    4. Re:gripes. by Peyna · · Score: 4, Informative

      Most people can't tell the difference between a quality MP3 and a CD; because they aren't listening that closely.

      It wouldn't be too hard to study this, hook someone up to headphones, blindfold them, and play them identical excerpts from a CD and then MP3 and make them guess which was which; or just say which was "better quality."

      --
      What?
    5. Re:gripes. by millahtime · · Score: 4, Insightful

      Don't forget about the whole problem of if you cancel Napster you loose all the music you downloaded after a little while. I would consider that to be a big problem that iTMS doesn't have.

    6. Re:gripes. by GuySmiley · · Score: 2, Interesting

      Totally agree. Apple claims that the 99c gets broken up to 65c for the label (band gets a few pennies) and the 34c covers cost of bandwidth, iTMS, overhead. Apple says they don't make money on music, but on iPods.

      I don't know if Napster got a better deal with the labels, but the margins are slim.

      What interests me is what if bands themselves could plug into the Napster/iTMS directly and avoid the middle man altogether. Bands would increase revinues 10X and songs could be 50c by avoiding the 'RIAA' cut.

      --
      Hey, leave comments about my mother out of this!
    7. Re:gripes. by hyc · · Score: 2, Interesting

      Yep. A band can make at most about 7 cents a track for their recording royalties, and usually makes less. The label keeps everything else.

      I personally will not pay real money for lossy-compressed audio.

      All we (musicians) really need is a music search engine that brings listeners to our web sites, and Paypal accounts.

      My band's current CD is online in low-quality MP3 (24kbps) for free. It's a try-before-you-buy offering, you can download it relatively quickly, give it a listen, then decide for yourself. If you want the full-quality recording, you can order the CD from us or from Amazon. (Fyi - the band is Highland Sun - Traditional Music from Ireland, Scotland, and Parts Unknown - the URL is by my name above...)

      --
      -- *My* journal is more interesting than *yours*...
    8. Re:gripes. by wideBlueSkies · · Score: 2, Informative

      I don't listen through headphones anymore, and I haven't bothered to test this way. But through my generic, consumer grade, multi-vendor component system I've found that a 192bit .mp3 encode is a good compromise between sound quality and file size.

      In most cases I can't tell the difference between 192 and 256. Or 192 and a CD.

      For bands that I really like (Rush, Dream Theater, etc) I'll encode at 192. Also this seems to work out well for reissue/remaster type CD's. Most of the sound seems to be captured in the encoding.

      Older CD's and bands that I don't like as much I'll encode at 128. I don't care if Bob Dylan or The Stones sound a little tinny. There's not too much interesting going on in the music anyway. But it's nice to hear the songs.

      Oh yeah, here's a great way to play mp3's through your stereo. I have nothing to do with these guys except that I'm a satisfied customer.

      wbs.

      --
      Huh?
    9. Re:gripes. by bay43270 · · Score: 2

      1. Yes $.99 is high. But no higher than CDs. If you want all of an album, you only pay $10 (on both Apple Store and Napster). Since the DRM doesn't prevent you from writing a CD, there isn't anything stopping you from having a permanent format. On top of all that, you no longer have to buy 13 crappy songs to get the two that you like. For that reason the 15 songs you get from Apple should have more personal value to you than the 15 you get from a CD at Best Buy.
      2. The file format is lossy, but the files are created from original tapes. So you aren't getting CD-Rips like you would from Kazza. Maybe AAC sounds like crap to you, but it sounds great to me
      3. DRM is not an issue unless you want to use a non-supported player or pirate music. I have an iMac, several PCs and an iPod. The only issue I have is my Audiotron won't play my Apple Store music. It just isn't an issue
      4. You would be lucky to find the same quality online. And you would have to download several copies of the same song before you found one of sufficent quality. After that, you would have to clean up the ID3 tags and delete the bad copies. But if that dollar is that important to you, have fun!

      You haven't converted because you haven't tried it (yes, I can tell from your post). Spend an hour on iTunes. Download 5 songs. Then tell me your not converted.

    10. Re:gripes. by Mipmap · · Score: 2, Informative

      It wouldn't be too hard to study this, hook someone up to headphones, blindfold them, and play them identical excerpts from a CD and then MP3 and make them guess which was which; or just say which was "better quality."

      Be very careful setting up this test - acoustic studies have shown that people tend to choose the louder of two choices as being the one with "better" quality. You must match the sound level exactly to get a fair comparison.

    11. Re:gripes. by cens0r · · Score: 2

      Yes $.99 is high. But no higher than CDs. If you want all of an album, you only pay $10 (on both Apple Store and Napster). Since the DRM doesn't prevent you from writing a CD, there isn't anything stopping you from having a permanent format. On top of all that, you no longer have to buy 13 crappy songs to get the two that you like. For that reason the 15 songs you get from Apple should have more personal value to you than the 15 you get from a CD at Best Buy.

      First of all I usually pay around $10 for an album. Sometimes it's as high as $12.99, sometimes it's as low as $7.99; but it usually works out to about $10. For this, I get a real permanent copy, and you're fooling yourself if you think a CD-R is permanent. For this, I get 10-15 songs that I like. If you're buying music that only has 2 or 3 good songs on the album you need to find better music.

      The file format is lossy, but the files are created from original tapes. So you aren't getting CD-Rips like you would from Kazza. Maybe AAC sounds like crap to you, but it sounds great to me

      And I get to make my files from the CD's, in whatever format I want. I keep FLAC rips of all my CD's around so that I can convert to what ever the current best lossy format is at will.

      DRM is not an issue unless you want to use a non-supported player or pirate music. I have an iMac, several PCs and an iPod. The only issue I have is my Audiotron won't play my Apple Store music. It just isn't an issue

      Well my nomad II and my iRiver CD/MP3 player won't play things with DRM. Plus, what happens if 10 years from now Apple decides not to support iTMS anymore? what happens to those files? I have records that are 40 years old and they still play fine. I have CD's that were purchased in the early 80's and they still play fine. DRM doesn't leave me feeling confident that this ability will be carried forward.

      You would be lucky to find the same quality online. And you would have to download several copies of the same song before you found one of sufficent quality. After that, you would have to clean up the ID3 tags and delete the bad copies. But if that dollar is that important to you, have fun!

      Of course I can find everything that you can get at iTMS at my local record store. Plus more. Plus better service. Plus knowledgeable sales staff. Plus other music fans.

      --
      Jack Valenti and Orrin Hatch will be first up against the wall when the revolution comes.
    12. Re:gripes. by wideBlueSkies · · Score: 2, Insightful

      Another point on this. In the case where I want to make a mix CD for the car I find that it's usually easier to rip mp3's back to CD (because the files are 'right there' on the computer than it is to find the CD and do a bit for bit copy.

      And I still don't really notice the sound difference. The way I see it, this is the equivalent of how we all used to make 2nd or 3rd generation copies of records back in the 80's. Or tape blocks of songs off the radio. (I still have a lot of these tapes (TDK SA/90's) and have been slowly converting them to .mp3.

      The sound may not be as good, but just as long as the song itself can still be hard and that song stirs some kind of emotion, then who cares if the quality isn't as good.

      wbs.

      --
      Huh?
    13. Re:gripes. by gnu-generation-one · · Score: 2, Insightful

      "DRM is not an issue unless you want to use a non-supported player or pirate music"

      Nice troll.

      DRM is the difference between knowing you'll be able to listen to music, and not knowing that you'll be able to listen to music.

      Know what hi-fi you'll have in 3 years time? Are you sure it'll be supported by your chosen DRM scheme? Howabout if you have the choice of one hi-fi that supports the scheme, and a better hi-fi that doesn't?

      Going to be on Windows/MacOS all your life? Howabout at work? Good luck listening to crippled music when you start using XMMS.

      Ever plan to get an in-car CD player?

      A decent jukebox? (Nomad Zen plays just MP3)

      Howabout your friends' systems? Can they still borrow your music?

      Want to put your music on a set-top box and play it in the living room? Did you check which formats MythTV supports?

      DRM means that in a few years, you'll be fiddling with an audio loopback cable and a copy of Audacity trying to retrieve a copy of your music, while anyone who's insisted on a readable format for their music will be happily converting to whatever portable or hi-fi device they buy next.

      p.s. go and read about piracy before you continue comparing murderers with people who share music

  10. More importnaly.... by Chris_Stankowitz · · Score: 5, Funny
    Are these 5 million indivually-packaged 99 cent songs, or are they including songs shipped out under subscription plans as "sales?"

    More importanly, how many of these songs *don't* suck!


    Yes, this is Humor!

    1. Re:More importnaly.... by pikkumyy · · Score: 3, Interesting

      Top-10 downloads

      Britney Spears: Toxic
      Maroon 5: This Love
      Nickelback: Someday
      No Doubt: It's My Life
      Jessica Simpson: With You [Album Version]
      Jet: Are You Gonna Be My Girl
      3 Doors Down: Here Without You [Album Version]
      The White Stripes: Seven Nation Army
      Nickelback: Figured You Out
      Eamon: I Don't Want You Back [Ultra Clean Version]


      .. not too many it seems :)

  11. Profitable? by despik · · Score: 3, Interesting

    So are they even, um, breaking even? Given what Steve Jobs said about iTMS and iPods...

    --
    "I seem to have mastered a certain amount of control over physical reality."
  12. They're still going to go out of business by Trespass · · Score: 2, Interesting

    Who cares how many songs they sell if they're not making enough money to survive. Hell, their parent company has be laying people off recently.

  13. Well we know that... by physicsboy500 · · Score: 3, Funny

    You'll never shut down the real napster!

    --
    The original generic sig.
  14. nah, it's the MS DRM by I8TheWorm · · Score: 4, Interesting

    iintegration with portable devices must play a key role in the download volume

    Forget that.. it's the fact that Napster forces use of the MS DRM that keeps me from using it.

    --
    Saying Android is a family of phones is akin to saying Linux is a family of PCs.
  15. Re:purchase songs? by TedCheshireAcad · · Score: 4, Funny

    Because all that Pepsi *really* makes me have to pee.

  16. The question is... by nathanhart · · Score: 3, Funny

    The question is, how many people bought the 90 seconds of silence for $.99 track off Napster aswell

    --
    GeekLeak.com - Silly name, serious geeks
  17. Competition is good by Anonymous Coward · · Score: 2, Insightful

    Competition is a good thing, because is should lead to lower prices. Unfortunately, when there are only a few suppliers, collusion, rather than competition, is more likely to happen.

  18. Re:That is theft. downloading is not by good(k)night · · Score: 2, Insightful
    If you want a comparable situation, why don't you find a nice shiny Porsche parked along side the street. Build an exact replica of this car, and drive off in the replica.
    .unless they have a patent for it...
    --
    my endian is bigger than yours!
  19. Use of Napster name by Zog+The+Undeniable · · Score: 4, Interesting
    Firstly, although I can't see myself using one of these services in the near future, well done to Roxio for trying a different business model.

    However, I think the "Napster" branding is an odd decision. Who is still likely to go to napster.com in the hope of finding free music, seeing as it was shut down for years? And in terms of brand image, Napster always stood for getting-something-for-nothing, so isn't it a bit like launching a legitimate online software store called "serials.ws"? I wonder what Shawn Fanning would make of it, as it was his nickname in the first place.

    --
    When I am king, you will be first against the wall.
  20. Buying Music "In Bulk" by Landaras · · Score: 5, Interesting
    One interesting thing that the article mentions that Napster is doing that Apple is yet to, is allow people to buy tracks "in bulk" for a small discount.

    Members can now buy packs of 15, 25 or 50 tracks for US$13.95, $21.95 and $39.95, respectively.

    I sincerely wish Apple would do something like this, espescially since I believe they would save a bit on credit-card processing fees (see one of my earlier posts).

    They could even do this without cluttering up the iTMS interface by keeping the same "buy song" button. Just have any songs bought be charged against pre-purchased credit before it goes to your credit card on file.

    - Neil Wehneman
  21. Napster aggressive marketing by AtariAmarok · · Score: 4, Interesting

    A week or two ago, I saw at a gas station, on the rack with all those plastic phone cards: Napster cards.

    It seemed like a clver idea. On the other hand, I was not inspired to buy one at the time.

    --
    Don't blame Durga. I voted for Centauri.
    1. Re:Napster aggressive marketing by macMaestro · · Score: 2, Informative

      You can now get $15 prepaid iTunes cards at Target stores as well.

  22. Paid individually or University subscription? by GuySmiley · · Score: 5, Insightful

    Did each song generate 0.99$ or are these from the University contracts allowing all students to download at will. This is a huge difference. Does anybody have the contract details of the University deals? Is it a blanket fee or reduced charge per song? If students get 'free' unlimitted downloads and are all on T1/T3 lines, of course, 5e6 songs are easily downloaded. This is not surprising.

    --
    Hey, leave comments about my mother out of this!
  23. Kazaa Usage by jetkust · · Score: 3, Interesting

    iTunes, Napster, and others probably have a lot more to do with decreased usage of Kazaa than the RIAA lawsuits. Eventually Kazaa just becomes too much of a pain in the ass to use considering the alternatives.

  24. profitable or tax loss? by fermion · · Score: 5, Interesting
    Apple says it makes no money on music, and it is possible they don't. If we believe the number, the division brings in about half a million that Apple get to keep. So it would seem that any other service would try to minimize start up costs, are at least those that could not be deferred. So why it is that Napster claims to have lost 15 million in the first two months of operation? During that time, they probably brought in less than half a million after paying royalties. Even if much of this loss was start up costs, do they actually expect to make millions of dollars a month off the 20 cents of so they keep from each track sold?

    Perhaps some accounting type can shed some light on how so much money can be spent on a market that, for the foreseeable future, is only going to generate a million or so after royalties. Haven't we left magic money fairies behind us in the dot com bust? Or are the respected economists of the 80's back to haunt us.

    --
    "She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
  25. Some google cache links by cache_automaton · · Score: 2, Interesting

    Google has some applicable cache hits.

    Mercury News | 02/19/2004 | Smiles fade at Napster

    --
    It is my pleasure to serve you caches, for I am a bot.
  26. How is Napster Making Any Money? by spaceman_spif · · Score: 2, Interesting

    Apple has admitted that it makes most of its money off of Ipod sales. Where is the similar secondary market for napster? Maybe they are coming out with the NPOD but right now they have to be losing a huge amount of money!

  27. Apple Market Share by zomper514 · · Score: 5, Funny

    I never thought I would see the words apple and 56% market share in the same sentence.

  28. iTunes is wonderful, but... by Anonymous Coward · · Score: 2, Insightful

    I can't use it here in the UK (*). Napster is ok, but I still find the depth of tunes is not really to my tastes, plus I own and iPod, so WMA files really don't float my boat when it comes to music on the move.

    Add to that the DRM issues and to be honest, I don't really want that much hassle when I decide to upgrade/reinstall my PC, so in the long term, both iTunes and Napster won't do it for me I'm afraid. Call me a stick in the mud, but I'm not supporting anything that deprives me of my basic consumer rights.

    So, I tend to support smaller non-DRM'd operations like Bleep, which is worth checking out if you like your coffee table electronic music...

    (*) I've always wondered why global record corporations have so much problems sorting out global rights, which is apparently why iTunes is not happening outside the US.

  29. Music By the Pound by AtariAmarok · · Score: 2, Funny

    This reminds me of an episode of the dear departed Drew Carey show. Lewis had just returned from a discount music store, "Music by the Pound" that sold those really deep-discounr CDs no one wants.

    "I got the shopping cart, got a few pounds of rock, a few pounds of classical...."

    --
    Don't blame Durga. I voted for Centauri.
  30. Re:define "viable alternative" by bay43270 · · Score: 5, Insightful

    Don't fool yourself into thinking CDs have 'full dynamic range' of sound. CDs are a compromise, just like anything else. No, they don't have lossy compression, but they do have limited range. While the AAC files on Apple's music store use lossy compression, it's a much better technology than the 10 year old mp3 format -- and the recordings are made from the original tapes (they are not CD rips).

    Recording sound is all about compromise. Don't base your judgment of one format over another based on a single word like 'lossy'. Listen to a few songs on the music store and let your ears be the judge.

  31. Comparing Apples and Kitty Kats by amichalo · · Score: 5, Informative

    Usually I like to interject my own thoughts, but I will let the numbers speak for themselves:

    4/28/2003 - iTunes Music Store for Mac launches
    5/5/2003 - iTMSfM sells 1 millionth song
    5/14/2003 - iTMSfM sells 2 millionth song
    7/22/2003 - iTMS sells 6.5 millionth song
    10/2003 - Napster launches
    10/2003 - 300,000 Napster 1st week sales / 1.5MM iTMS sales same week
    10/2003 - iTMS for Windows launchs (~13MM songs sold to date)
    12/9/2003 - iTMS sells 20 millionth song
    12/16/2004 - iTMS sells 25 millionth song (2.5MM/mo.)
    2/2004 - Napster sells 5 millionth song (1.25MM/mo.)

    On the bottom 1/3 of this page is a chart and analysis of the numbers too.

    WARNING: My two cents -
    Interesting that while Apple's numbers are much higher than Napsters', and Apple had to overcome the initial proof of concept that it would even work, so many REMAIN critical of the service.

    Interesting still is that those same critics won't even spend a few dollars to give iTMS a *TRY* before they ink their mal-informed pens.

    --
    I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
  32. Bad catalogs... by mtrupe · · Score: 4, Insightful

    The great thing about the heyday of Napster/Kazza/others was the great availability of rare recordings-- Live Rush stuff, really old Pink Floyd, hard to find CSNY. The record companies have made it so, once again, we are not "allowed" to listen to this great stuff.

    I checked out Napster just today. $9.99 a month and $.99 for a download. Big whoop. If I want to buy an album its still going to be $10-$20, depending on how many songs are on it, but now I get to pay an extra $9.99 a month to have the privilege to download.

    IMHO, if you only download a couple of songs without getting the album, you are missing some great traks (b sides). Of course, this is only true to real music, not the boy band and rap crap that is popular these days....

    1. Re:Bad catalogs... by SomeOtherGuy · · Score: 2, Insightful

      Amen. I always looked at online music procurment as a way to get the songs that I could not purchase off the top 40 rack at my local target. Yet any "modern", "legal" -- file sharing service assumes that I would want to buy crappy top 40 of today or yesterday.

      --
      (+1 Funny) only if I laugh out loud.
  33. I have tried both Napster and iTunes by x.Draino.x · · Score: 4, Interesting

    Here's my problem with iTunes.. If you format your computer and did not back-up your downloaded music you have to PURCHASE it again. I believe if I'm paying for music online and do not receive a CD that I own a license and should be able to re-download it again for free. This was a nice little shock after spending $50 on music then losing it. Napster will re-sync your collection if your hard drive crashes, etc. No fee, just hit re-sync and it will download it all again for you. But you are still able to back it up if you choose to. This problem with iTunes will definitely stir some stuff up in the future when some average joe's hard drive crashes and he loses $300 worth of music. It's about the same as someone breaking in your car and jacking your life-long CD collection.

    1. Re:I have tried both Napster and iTunes by MacDaffy · · Score: 2, Insightful
      If you format your computer and did not back-up your downloaded music you have to PURCHASE it again.
      Translation: If I do something completely idiotic, there's no one and nothing to protect me from myself.

      What you describe is not like someone breaking in your car and "jacking" your lifelong CD collection. It's like you got high, took it to the dump, and threw it in.
    2. Re:I have tried both Napster and iTunes by etpinge · · Score: 5, Informative

      Been there done that.... trashed a box after downloading a few songs. The music wouldnt even synch to the iPod or back from. Couldnt use an iPod extractor to get the music back to the computer.

      I emailed Apple iTMS and explained the situation. They tweaked some settings and my music was available for download and reauthorizing onto machines free of charge.

      iTMS support said they normally do not support such a request, but since they responded within 1 hour of the original email request with a positive response, and within the another hour to mysecond email requesting that users should be able to deauthenticate machines from within iTMS, I think they would be open to assisting us blockheaded users.

  34. eMusic by autechre · · Score: 4, Informative

    1. The most expensive option (per track) is $10 for 40 songs per month. They show you the album cover, but that seems to be all you get.

    2. The file format is lossy, but it's also VBR MP3, which can't be distinguished from CD quality audio by many people.

    3. DRM is a bitch. That's why they don't use it. Also, much of their music is available to those outside of the U.S., which is something almost no one else offers.

    So what's stopping you? I know that a lot of your "favorite artists" may not be on there, but wouldn't you like to support artists/labels that are willing to give you music on your terms? You can preview any track, and download your first 50 tracks for free.

    (As an example, if you like synth pop, go to freezepop.net. Download the free MP3s. If you like them, you can get all 4 of their CDs for $32 [or buy them individually, of course.] Lyrics are on their site. This is the kind of band that gets my money.)

    Don't like synth-pop? I can recommend something else. There are plenty of bands out there making great music who actually want you to hear it.

    --
    WMBC freeform/independent online radio.
  35. Define "sold" by SuperChuck69 · · Score: 2, Insightful
    Does their definition of "sold" include "comped"? It usually does.

    Crapster has been trying to get me to download "5 trial songs" ever since they got back into business. If I downloaded these, would they count toward Crapster's running total? That's not a terribly fair assessment if you ask me...

    --
    :wq
  36. Yeah, integration with portables plays a role by timeOday · · Score: 2, Interesting
    And surely in the long run that role is NEGATIVE. Having a music collection tied to a single company is crazy, stupid idea (for consumers that is).

    Maybe we need to distinguish between *integration*, which is a fine thing, vs. what you actually get today, which is *lock-in*, that is, exclusive integration with only one brand.

  37. Re:define "viable alternative" by phrasebook · · Score: 2, Informative

    One good thing about CDs is that you can rip the audio and mess with it however you want. Encode it in any format, put it on different players, whatever. On the other hand if you transcode some music that's already been lossy-encoded, the results are bad.

    CDs are a compromise, just like anything else

    They're a pretty good compromise though. It's the principle of not wanting a lossy-encoded version; just knowing that you're listening to something 'inferior' can be enough of a problem.

    The main problem with CDs seems to be clipping from what I've read. ie. if the CD is mastered so that the loudness is increased, the highs and lows just get 'clipped' when they hit the limit of the CD. I remember seeing a waveform of a newer Metallica CD on a website somewhere, and the whole thing was pretty much flat, instead of clear peaks/troughs on the tracks. So the sound is loud but you lose clarity. Or something like that.

    AAC doesn't seem much better than MP3 at the moment either. Still going under a lot of development. But who am I to say - a decent MP3 eg. encoded with LAME sounds perfect to me.

    the recordings are made from the original tapes (they are not CD rips)

    Cool. I kinda imagined an Apple employee sitting somewhere with a huge stack of CDs next to a Mac... one after the other...

  38. Napster sucks by GarfBond · · Score: 4, Informative
    I don't know if any of you have ever tried napster, but I made the mistake of subscribing to their "premium" service. Here's a slight edit of a post I made to my blog:
    After using it for about 5 minutes, I can tell I hate it. In no particular order, here's a couple reasons why:
    • The program tells you $10 for unlimited plays, but that only gets you streaming. Wanna keep the songs? Pay another $1 a pop. (To their credit, this is a problem with all streaming services)
    • 96kbps WMA sucks. I never thought I could actually easily tell difference audibly, but let me tell you, the LOTR ROTK soundtrack makes it quite apparent. By comparison, Rhapsody uses 128kbps WMA (still not great, but better)
    • A good chunk of songs in there are marked "buy only," meaning, your napster premium account isn't so premium after all. This sucks. Compare that with Rhapsody, where although they only do a streaming service, many songs marked "buy only" on napster are very much available for streaming through Rhapsody. Some examples: Audioslave, anything by Soundgarden, and Greenday.
  39. A battle that cannot be won by kd4evr · · Score: 4, Insightful

    I view this pay-per-download thing just as a painful transition to a better world.

    The technology has advanced enough to enable any Johnny B to make as many copies of digital anything as he wants. No RIAA, DMCA, CIA, or YMCA is going to stop the inevitable.

    Wrong strategy: Instead of pursuing those who try to profit distributing fakes to people and are the big players costing the consumer as well as the author rights owner, the reseller and the producer big bucks, companies try to maximize their current net gain by restraining the choices of the regular Johhny B. As if the mainstream and biggest selling hits were immortal works of art that need to be treasured in vault rather than a day-to-day fad, only to be forgotten if not accessed in the same month.

    Right strategy: Adapt. Face the fact that for a product to succeed, it must be cheaper and better than something one can-do-himself in his home.

    The age of expensive CDs is over. Vynil was cheaper to buy than to copy, but people always liked to use cassete tapes for copies - who was nuts enough to pursue that?

    Customer will, eventually, stop at some point to let themselves be squezzed out of every penny. Not to mention the third world who is quick to pick on some of the technology, but much less willing or able to follow royalty and copyright practice.

    Prices will have to fall, be it media sets or download options. High prices and limited access are only a road to oblivion. Furthermore, new inventions may well push current technology out of the market.

  40. Samsung Napster mp3 player by Chris+Pimlott · · Score: 5, Informative

    I keep seeing this over and over. Everyone seems to have forgotten that Napster does have a hardware mp3 player. Samsung makes it, but it carries the Napster name, and you can bet they get a piece of each sale.

    1. Re:Samsung Napster mp3 player by Durandal64 · · Score: 4, Insightful

      No one's forgotten that, because they never knew about it in the first place. People do know about the iPod. See the difference?

    2. Re:Samsung Napster mp3 player by Pieroxy · · Score: 2, Insightful

      The problem is different. If you want to get the best out of iTunes, you have to buy an iPod. For Napster, any MP3 player will do. So a customer for iTunes means almost invariably an iPod sold. A customer for Napster doesn't mean anything for them in terms os hardware.

    3. Re:Samsung Napster mp3 player by WiggyWack · · Score: 2, Informative
      Samsung makes it, but it carries the Napster name, and you can bet they get a piece of each sale.

      Not accordinging to the SiliconValley.com article which stated Napster derives no income from the sale of a branded music player.

      It also said HP returned Napster's $250,000 check. Napster probably paid HP (and is paying Samsung) a certain amount to get the Napster logo on HP's and Samsung's players in an effort to gain mindshare. Napster needs Samsung more than Samsung needs Napster.

      HP realized the money they were getting from Napster was nothing compared to what they could get from a portion of HP iPod sales...

      --
      Macintosh humor! MacComedy.com
  41. Re:Rebuttal by DarkHelmet · · Score: 2, Informative
    You aren't being converted because you like stealing music. That's the truth isn't it? Free is better to you. be honest with yourself and then think about the price of your own honor. Isn't it worth more than a dollar?

    I buy what I listen to. I discard what I don't.

    If you look on my computer, you'll see mostly songs extracted from CD's I own, and Remixes which are free.

    I have absolutely no qualms whatsoever with downloading music for free. Doing so has been the source of every purchase I have ever made music wise. Maybe there aren't as many people like me. Or maybe the music industry should re-evaluate the fact that the $1200 or so in music I have comes from discovering it in a free medium.

    In the end I end up buying music that I like and appreciate anyway.

    If I had no honor whatsoever, I wouldn't own any CD's. They would be all burned CD's lined up along my wall.

    Nice try, but my honor is in tact.

    --
    /^[A-Z0-9._%+-]+@[A-Z0-9.-]+\.[A-Z]{2,4}$/i
  42. All this talk about Napster v. Itunes.... by Xuranova · · Score: 2, Interesting

    Has anyone tried Rhapsody? If so is the selection and/or quality up to par? I've been considering it for a while now after seeing it running at best buy. 10-15 bucks a month to listen to unlimited songs, and .99 cents to burn a song onto cd(which from there could go on to whatever mp3 player you're using..). To me it seems like it gives the best of both worlds.

    --
    "There is no real right or wrong, just what the majority accepts at the time."
  43. Re:define "viable alternative" by Durandal64 · · Score: 2, Informative

    Some rips are from the master tapes; some are from the CD. I don't know if there's any way to tell. As for the clipping problem with CD's, that is not inherently a problem with the CD format itself. It is a problem called the "loudness wars." Basically. record companies want their CD's mastered to be extremely loud on the radio with the reasoning that the louder the song is on the radio, the more the listener will pay attention to it.

    CD's do have a limited range, but it's not that limited. The problem is incompetent engineers mastering a CD so that the maximum volume is reached almost constantly, creating the clipping effect and taking away dynamic range. CD's from the early 90's are a lot quieter, but you can really feel the loud parts and make out a lot more dynamic in the signal. Think of reading something in all caps and no punctuation vs. reading that same thing with proper punctuation and capitalization. In the former case, your brain receives no queues as to when it should "pause" or take a breath. Everything is the same, so it's more difficult to tell one part from the other. Same deal with music levels. Since the loudness wars have broken out, that dynamic range has disappeared and the only time a song isn't playing at peak volume is when it's fading out. It's really unfortunate.

  44. Not going to happen. by autechre · · Score: 2, Insightful

    You can download music from a service like eMusic in VBR MP3 format. However, the first half of your point 2 negates point 1. Record labels who own "popular" music will not, in the near future, offer music on the terms that you want. You have to stick with labels who still value music more than money.

    As for point 3, your "or better" stipulation is silly, as most music from the past 30 years was not mastered in anything higher than CD quality.

    --
    WMBC freeform/independent online radio.
  45. Sold songs? by Rogerborg · · Score: 2, Insightful

    What they've been selling is revocable licenses to decrypt. When they go belly up, a lot of people are going to find that out the hard way.

    --
    If you were blocking sigs, you wouldn't have to read this.
  46. Re:define "viable alternative" by Golias · · Score: 5, Informative
    Clipping is not a problem specific to the CD format. Clipping comes from the studio monkeys running the sound too hot for their own boards. This is not done by accident... songs that sound "louder" on the radio tend to sell better, so studios compress the hell out of the sound and cram as much of it near peak output as they possibly can. Rush's "Vapor Trails" album is a tragic example. Everything, including the vocals, sounds like it's being played through a 10W amplifier at full volume. (Too bad, because muscially, it's probably their best album in the last decade or so.)

    The "problem" with CD's is the 44.1 K sample rate. A 22KHz sound wave only gets represented by two bits, and with many of the crappy early digital encoders from the 80s, it might not even be sampled from alternate peaks of the wave.

    Of course, the typical American geek's hearing pretty much ends around 16 KHz (at best), so you could do as CD zealots do, and insist that anything above that frequency doesn't really matter... except it does, because of the way it colors overtones, which are what gives most sounds their timbre. If you put a typical music-lover in a booth and make them listen to a double-blind test between a live microphone feed of a singer with piano accompaniment, and the same live feed where everything above, oh... say 17 KHz is filtered out, they will spot the difference.

    However, most of people's concerns about the compromise of "the digital sound" turned out to be unfounded. Early CD players (and some of the cheaper ones today) sounded too bright and tinny as a result of inferior D/A conversion algorhythms.

    When an LP is "cut", the low-frequency waves are dialed way down in amplitude, because otherwise you would have a grove that moves outside the stylus's range of motion! A pre-amp in the turntable (based on an industry standard established by the RIAA) boosts the bass back up again. Unfortunately, this electronic equalization results in massive, boomy, slightly unnatrual bass. Through the 70s, the stereos which did the best job of tweaking LP sources to sound natural gained the reputation of being the best playback equipment. Listening to a good-condition LP on a top-notch 70s "hi-fi" stereo is an extremely rewarding experience.

    When CD players arrived in the early 80s, the same stereos that played back LP recordings with a "warm, rich" sounded bright, harsh, and shrill when playing back the same recordings on CD.

    Over the years, better logic, better error-correction, and better playback components (as well as better digital encoding in studios) have all resulted in CD's that sound every bit as good as LP's.

    In the late 80s and early 90s I was a total LP bigot, but to not change my position these days would be ignoring the evidence given by my own ears. Hearing "Dark Side of the Moon" on a $300 Rotel CD player through high-quality speakers is every bit as satisfying as hearing the LP on a $4000 air-baring, laser-guided turntable, if not more so.

    So yea, CD's are not a bad compromise at all.

    However, 99% of the time I'm listening to music, it's either on a portable player, in my car, or at my computer desk. In those environments, AAC is not only good enough, it's very difficult to notice the difference between it and the CD.

    --

    Information wants to be anthropomorphized.

  47. Re:define "viable alternative" by jocknerd · · Score: 2, Interesting

    I agree with you somewhat. I have bought only a couple of "albums"off of iTunes. White Stripes were one. Didn't think the compressed format would be noticeable on their style of music.

    I HAVE noticed however that the AAC's I have downloaded are very good quality, even at 128. And some of my CD's that I have ripped at higher bitrates sound worse. So that tells me that some CD's just aren't recorded too well to start, while iTunes AAC's were recorded off of master recordings.

    So the recordings I download may actually be of better quality than many of my CD's. But its still the principle of it that I would like to be able to download a FLAC or AIFF of a song just to ease my mind a little.

  48. Loudness wars by AtariAmarok · · Score: 2, Funny

    They showed how a Celine Dion CD is now louder then a Van Halen cd released in the late 80's because the average "loudness" has been increased so much between then and now.... I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones."

    If the CD's get any louder, the next global war will be fought with Styx and 'Stones.

    --
    Don't blame Durga. I voted for Centauri.
  49. A sad press release from a desperate company by Anonymous Coward · · Score: 5, Interesting

    This is not 'news'. It is a slick piece of PR from a desperate company. Since the launch of pay-per-song Napster, the parent company Roxio has seen its share price decline from $11 to $3.50, a 68% decline. Yesterday the stock hit a 52-week low (amid a generally happy NASDAQ environment). For this company to generate a mere $5mm in revenues in 3 months can only be described as an unmitigated failure, as the market price of ROXI clearly demonstrates.

    The editors of /. need to treat corporate PR with a healthier degree of skepticism.

    http://finance.yahoo.com/q?s=roxi

  50. Two Quick Points.. by DoctorScooby · · Score: 4, Interesting

    1) When Napster gives a marketshare number, the Slashdot masses go on the offensive and try to tear that number apart. When Apple gives a marketshare number, we accept it without question, despite the fact that they are well-known for their questionable sales tactics and misleading facts and figures. Does this imply any sort of bias? Open your eyes and take a step back, you'll start to understand what's happening here on Slashdot. A seemingly grassroots groundswell of support for Apple and their brand of proprietary software, and a seemingly grassroots groundswell of disdain for the GPL.

    2) People here are also attacking Napster because of its DRM as opposed to Apple's DRM (which is like saying "I much prefer the Guillotine to the Gas Chamber, they really thought about my comfort in designing it"). However, the most interesting part of AAC is that it is an open-ended DRM, which is to say, it can be strengthened after the market has widely embraced it. Think about it - right now, Apple gives you nearly limitless freedom to pirate, copy, share, and distribute files bought from iTMS. They say the RIAA is good with it. Does that sound like the RIAA to you? Apple admits they lose money on the transaction, hoping to make it up in iPod sales (yes, this is the same Apple who is now charging for iLife).... In 2-3 years, when they have cornered the market, they will change the terms and conditions of sale, just as they did with the "forever free" .Mac accounts, for example.

    Right now, Apple listens to their customers. They do this because they are fighting for marketshare. When you reward them with a monopoly, they will become a monopolist in attitude as well as fact. The goal of Apple and the RIAA is not to beat MS' DRM format, the goal is to beat piracy and kill open formats. And they will, to a large extent; with their hardware and software lockins -- this is quite possible and, in fact, probable -- and is the same idea MS has with their Longhorn / Bios / hardware anti-piracy lockin.

    I know you love Apple, but sometimes you have to protect yourself from the ones you love.

  51. WRONG:I have tried both Napster and iTunes by XavierItzmann · · Score: 2, Informative

    For ANYONE who thinks their iPod will re-load their music back to a crashed Mac: NO, it does not work this way. IF you want to preserve your music, BACK IT UP to other media (another hard disc, DVD, CD's if you must) If your machine's disk crashes, and you re-format, upon connecting your iPod, the system will tell you that this iPod is set to another machine. From now on, do you want to sync with THIS machine? If you say yes... then it will sync with your empty machine, which has a "NEWER" database with no songs; i.e., it will synch both the iPod and the Mac/PC to nothing. Back up! Rely not on the iPod. This is a severe misconception.

    --
    The next pasture is always greener
  52. Re:WeedShare by Technician · · Score: 2, Interesting

    Unfortunately, weedshare seems to be another DRM format not supported by my hardware.

    How many times do I have to say it. My hardware is unable to install your required software.

    Stick to industry standards that the hardware already supports. There isn't much out there that can't play MP3's. Very few people are selling MP3's.

    Clip from the site,

    System Requirements:
    A Windows 98 or later PC and a current media player that supports the Windows Media Format. We also recommend a broadband Internet connection, as Weed files average around 5 MB in size.


    That leaves out my car jukebox(MP3), my CD jukebox (MP3's only) Winamp on the PC, Living room DVD player (the main audio playback device) and my MP3 player.

    Paying a premium to buy music that plays only on the internet connected PC and it's junk speakers is not my relaxing sound system of choice. Don't try to sweettalk me into burning CD's. Why change format twice to get it to a CD MP3 jukebox?
    I see no need to burn a CD just to rip it.

    Somebocy get a clue and sell tunes in all the popular formats. Those who want Apple format can have it. Those who want MS format WMA can have it. Those who have MP3 jukeboxes... Well we are waiting...

    --
    The truth shall set you free!
  53. Don't believe everything you read by Gumber · · Score: 2, Interesting

    The story that Apple realizes profit from the iTMS not by selling songs, but by driving iPod sales is a good one, and no doubt there is a lot of truth to it, but I think it is foolish to take it at face value.

    Right now, its in Apple's interest to make sure iTMS appears like an unattractive business to get into, because it discourages potential competitors, and the investors who might fund competitors. Meanwhile, the iPod story keeps Apple investors happy.

    In time though, as volumes increace, as their initial investment is recouped, as they improve efficiency and lower costs, and as they negotiate better terms with record labels, their story will likely change.