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Is Apple Going To Shut ITunes Store?  
User currently offlineCumulus From United Kingdom, joined Aug 2006, 1402 posts, RR: 1
Posted (6 years 1 month 3 weeks 6 days 10 hours ago) and read 2511 times:

Due to increased levies by record firms etc, Apple today made a veiled threat to close the iTunes store.

I hope not, I spend a fortune on iTunes and love it!

http://news.bbc.co.uk/1/hi/technology/7645537.stm


What Goes Up Must Come Down, Hopefully In One Piece!
24 replies: All unread, jump to last
 
User currently offlineYooYoo From Canada, joined Nov 2003, 6057 posts, RR: 50
Reply 1, posted (6 years 1 month 3 weeks 6 days 10 hours ago) and read 2500 times:



Quoting Cumulus (Thread starter):
I spend a fortune on iTunes and love it!

Surely you can download Disney tunes at some other site?  Wink



I am so smart, i am so smart... S-M-R-T... i mean S-M-A-R-T
User currently offlineManuCH From Switzerland, joined Jun 2005, 3012 posts, RR: 46
Reply 2, posted (6 years 1 month 3 weeks 6 days 9 hours ago) and read 2461 times:
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I'm sure they're only trying to put some pressure on the Copyright Royalty Board to avoid the increase in royalty fees. After all, Apple has quite a market share in song sales, so maybe the CRB will at least consider what they have to say.

I can't see Apple really closing the iTMS, others would take over the business in a split second. Not a very sensible thing to do IMHO.



Never trust a statistic you didn't fake yourself
User currently offlineDreadnought From United States of America, joined Feb 2008, 8917 posts, RR: 24
Reply 3, posted (6 years 1 month 3 weeks 6 days 9 hours ago) and read 2438 times:



Quoting Cumulus (Thread starter):
Due to increased levies by record firms etc, Apple today made a veiled threat to close the iTunes store.

All they will do is increase the attractiveness of pirating music.

They have to face that the days of musicians making hundreds of millions of dollars are over (as they should be).



Veni Vidi Castratavi Illegitimos
User currently offlineThePRGuy From , joined Dec 1969, posts, RR:
Reply 4, posted (6 years 1 month 3 weeks 6 days 8 hours ago) and read 2417 times:

Empty empty threat it ain't gona happen

User currently offlineKFLLCFII From United States of America, joined Sep 2004, 3307 posts, RR: 30
Reply 5, posted (6 years 1 month 3 weeks 6 days 8 hours ago) and read 2395 times:

Amazon is better anyway. No DRM, mp3 format (can be used in any player), sound quality is MUCH better (256k bitrate), same price. And the selection seems to be much more extensive.

I won't miss it.



"About the only way to look at it, just a pity you are not POTUS KFLLCFII, seems as if we would all be better off."
User currently offlineJetblueguy22 From United States of America, joined Nov 2007, 2821 posts, RR: 4
Reply 6, posted (6 years 1 month 3 weeks 6 days 5 hours ago) and read 2328 times:
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Quoting KFLLCFII (Reply 5):
Amazon is better anyway

What is that? I just thought there was iTunes Big grin. But i too spend a fortune on iTunes. As well as my friends. This is empty. Apple does too much business over such a long time to let it go.
Blue



All of the opinions stated above are mine and do not represent Airliners.net or my employer unless otherwise stated.
User currently offlineCumulus From United Kingdom, joined Aug 2006, 1402 posts, RR: 1
Reply 7, posted (6 years 1 month 3 weeks 5 days 22 hours ago) and read 2245 times:



Quoting YooYoo (Reply 1):
Surely you can download Disney tunes at some other site?  

No!!!!!!!!!!!!



What Goes Up Must Come Down, Hopefully In One Piece!
User currently offlineStasisLAX From United States of America, joined Jul 2007, 3286 posts, RR: 6
Reply 8, posted (6 years 1 month 3 weeks 5 days 21 hours ago) and read 2241 times:

iTunes is how Apple is making massive profits - they're not making much of a profit from the sales of iPod units alone.


"Those who would give up essential liberty to purchase temporary safety deserve neither liberty nor safety!" B.Franklin
User currently offlineThePRGuy From , joined Dec 1969, posts, RR:
Reply 9, posted (6 years 1 month 3 weeks 5 days 20 hours ago) and read 2219 times:



Quoting StasisLAX (Reply 8):

Actually, wrong.

iTunes is a small proportion of their large profits, their huge growth in iPod, iPhone and intel mac sales are the main reason for their profits being so high in recent years.

http://www.apple.com/pr/library/2008/01/22results.html - See here, 23m iPods, 3m iPhones, 2.5m macs all representing at least 30% growth.

The physical profit to be had on iTunes is really quite small - consider the fact that iTunes only works with iPod, and thats the real reason for keeping it open.


User currently offlineCumulus From United Kingdom, joined Aug 2006, 1402 posts, RR: 1
Reply 10, posted (6 years 1 month 3 weeks 5 days 11 hours ago) and read 2148 times:



Quoting ThePRGuy (Reply 9):
The physical profit to be had on iTunes is really quite small - consider the fact that iTunes only works with iPod, and thats the real reason for keeping it open.

You sure? I've put downloaded iTunes stuff and put it on my Daughter's bog standard £15.00 MP3 player from Woolies!!



What Goes Up Must Come Down, Hopefully In One Piece!
User currently offlineCumulus From United Kingdom, joined Aug 2006, 1402 posts, RR: 1
Reply 11, posted (6 years 1 month 3 weeks 5 days 10 hours ago) and read 2134 times:

http://uk.news.yahoo.com/itn/2008100...tunes-shutdown-threat-ea4616c.html


What Goes Up Must Come Down, Hopefully In One Piece!
User currently offlineKFLLCFII From United States of America, joined Sep 2004, 3307 posts, RR: 30
Reply 12, posted (6 years 1 month 3 weeks 5 days 4 hours ago) and read 2057 times:



Quoting Jetblueguy22 (Reply 6):

Amazon.com  Smile



"About the only way to look at it, just a pity you are not POTUS KFLLCFII, seems as if we would all be better off."
User currently offlineAustinAirport From United States of America, joined Feb 2007, 643 posts, RR: 1
Reply 13, posted (6 years 1 month 3 weeks 3 days 10 hours ago) and read 1954 times:

eh? Filestube.com And Bittorent Work Great For Me.  Big grin

Quoting ThePRGuy (Reply 4):
Empty empty threat it ain't gona happen

LOL, I Cant Help But Agree With You.  Smile



Whoever said you can do anything you set your mind to has obviously never tried to slam a revolving door!!!
User currently offlineThePRGuy From , joined Dec 1969, posts, RR:
Reply 14, posted (6 years 1 month 3 weeks 3 days 9 hours ago) and read 1933 times:



Quoting Cumulus (Reply 10):
You sure? I've put downloaded iTunes stuff and put it on my Daughter's bog standard £15.00 MP3 player from Woolies!!

You can once its converted.

I for one hope that the appropriate bodies call iTunes bluff. They are killing independent music. Although arguably better than people downloading and paying $0.


User currently offlineSovietjet From Bulgaria, joined Mar 2003, 2640 posts, RR: 17
Reply 15, posted (6 years 1 month 3 weeks 3 days 1 hour ago) and read 1867 times:
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Quoting Cumulus (Thread starter):
I hope not, I spend a fortune on iTunes and love it!



Quoting Jetblueguy22 (Reply 6):
But i too spend a fortune on iTunes. As well as my friends.

 banghead   laughing   rotfl 


User currently offlineNWADC9 From United States of America, joined May 2004, 4898 posts, RR: 9
Reply 16, posted (6 years 1 month 3 weeks 2 days 23 hours ago) and read 1840 times:



Quoting KFLLCFII (Reply 5):
Amazon is better anyway.

Can't earn FF miles/Amtrak Guest Rewards Points through Amazon...



Flying an aeroplane with only a single propeller to keep you in the air. Can you imagine that? -Capt. Picard
User currently offlineKFLLCFII From United States of America, joined Sep 2004, 3307 posts, RR: 30
Reply 17, posted (6 years 1 month 3 weeks 2 days 8 hours ago) and read 1773 times:



Quoting NWADC9 (Reply 16):
Can't earn FF miles/Amtrak Guest Rewards Points through Amazon...

I'll take my sound quality.  Smile



"About the only way to look at it, just a pity you are not POTUS KFLLCFII, seems as if we would all be better off."
User currently offlineHapppyLandings From , joined Dec 1969, posts, RR:
Reply 18, posted (6 years 1 month 3 weeks 2 days 8 hours ago) and read 1758 times:



Quoting StasisLAX (Reply 8):
iTunes is how Apple is making massive profits - they're not making much of a profit from the sales of iPod units alone.

Correct! Hardware is a very low yeild business. The big returns are on software, licensing and other intellectual property.... You sell the same thing over, and over and over and..... You get it...

iTunes is not going anywhere.


User currently offlineKlaus From Germany, joined Jul 2001, 21495 posts, RR: 53
Reply 19, posted (6 years 1 month 3 weeks 2 days 7 hours ago) and read 1745 times:



Quoting HapppyLandings (Reply 18):
Correct! Hardware is a very low yeild business. The big returns are on software, licensing and other intellectual property.... You sell the same thing over, and over and over and..... You get it...

Or at least that's conventional wisdom — which Apple just isn't following.

They are using their software to differentiate themselves from the Windows PC market where the race to the bottom of the barrel has eroded margins to the point where hardware manufacturers usually make their tiny residual margins by adding "crapware" to their machines which the users are then fighting to get rid of.

Apple is actually making relatively healthy margins on their hardware. Software and the iTunes Store are just minor side businesses. The iTunes Store is slightly profitable, but just slightly. The bulk of Apple's profits comes from their hardware.

The iTunes Store is primarily a tool to aid iPod sales.

Quoting HapppyLandings (Reply 18):
iTunes is not going anywhere.

Probably not. The levies have been left unchanged.


User currently offlineSpringbok747 From Australia, joined Nov 2004, 4387 posts, RR: 10
Reply 20, posted (6 years 1 month 3 weeks 2 days 7 hours ago) and read 1728 times:



Quoting KFLLCFII (Reply 5):
Amazon is better anyway.

Last time I tried to download from Amazon.com, I got this: We could not process your order because of geographical restrictions on the product which you were attempting to purchase. Please refer to the terms of use for this product to determine the geographical restrictions.

We apologize for any inconvenience this may have caused you.


So as far as I'm concerned this is completely useless down here. Hope iTunes doesn't close. They just started adding TV shows and Movies here, it would be a real shame to see it go.



אני תומך בישראל
User currently offlineKlaus From Germany, joined Jul 2001, 21495 posts, RR: 53
Reply 21, posted (6 years 1 month 3 weeks 2 days 6 hours ago) and read 1722 times:



Quoting KFLLCFII (Reply 5):
Amazon is better anyway. No DRM, mp3 format (can be used in any player), sound quality is MUCH better (256k bitrate), same price. And the selection seems to be much more extensive.

Wrong — iTunes offers DRM-free music as well, in even better quality: It's 256 kb/s AAC instead of Amazon's MP3 (which is the older, lower-quality precursor format of AAC).

At this point several of the larger labels are just withholding DRM-free distribution from Apple in an attempt to damage their market position and build up the competition, but I expect they'll yield eventually as EMI already did.


User currently offlineHapppyLandings From , joined Dec 1969, posts, RR:
Reply 22, posted (6 years 1 month 3 weeks 2 days 2 hours ago) and read 1678 times:



Quoting Klaus (Reply 19):
The iTunes Store is primarily a tool to aid iPod sales.

I dont know how true that is... I think that iPod sales are to increase the iTunes sales which have a much HIGHER yield.... I may be wrong... but I dont think so here.

iPods cost alot of money to make, each song @ iTunes is sold 100 times over in one day.... Minimum...... One iPod has a 3% return? or something like that...Each song they sell on iTunes has a 99.9% return.....Average.

I think you are coming from the wrong place with your theory..


User currently offlineKlaus From Germany, joined Jul 2001, 21495 posts, RR: 53
Reply 23, posted (6 years 1 month 3 weeks 2 days 1 hour ago) and read 1664 times:



Quoting HapppyLandings (Reply 22):
iPods cost alot of money to make, each song @ iTunes is sold 100 times over in one day.... Minimum...... One iPod has a 3% return? or something like that...Each song they sell on iTunes has a 99.9% return.....Average.

I think you are coming from the wrong place with your theory..

You are completely mistaken.


From sales in the iTunes Music Store Apple gets 29 cents per title sold (the remaining 70 cents go to the labels who in turn toss a few pennies to the artists). That mostly pays for bandwidth, maintenance of the store, the servers, energy, advertising et cetera.

For years the iTunes Store has operated at barely break-even; As far as I know it has just recently begun to yield an actual profit, if still a comparatively small one.


iPods generally match Apple's usual 20-35% hardware margin (more at the higher end, less at the lower end). Apple is today the single largest buyer of flash memory worldwide, which gives them excellent buying conditions others cannot achieve.

In their latest quarter, Apple has reported a gross margin of 34.8% (down from 36.9% the year before). And it's primarily from hardware.
Apple Reports Record Third Quarter Results


Apple is a hardware manufacturer. They are just a hardware manufacturer who can afford to leave the unprofitable fighting over scraps at the low-end of the price range to their competitors who due to their shared dependency on Microsoft have no effective differentiation whatsoever while Microsoft rakes in the software licensing profits from each Windows PC sold.

Apple is the exception there, and it pays off handsomely. Apple is making good money by squeezing the PC vendors out of the profitable quality segment of the market into the subsidized low end. They can't make real profits on hardware, Apple can.


Conventional wisdom from the Windows side of the business simply doesn't apply to Apple due to their completely different strategy — which is why they are rapidly growing in an overall stagnating market, and successfully branching out into other fields at the same time (iPods, iPhone, ...).


User currently offlineStealthZ From Australia, joined Feb 2005, 5724 posts, RR: 44
Reply 24, posted (6 years 1 month 3 weeks 2 days 1 hour ago) and read 1655 times:
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From the figures that Klaus quotes and my own reading of the Apple Annual reports, iTunes Store(and other music related products & accessories) account for approx 10% of Apple revenue. If that stopped it would hardly be cataclysmic.
If Klaus' numbers are correct the actual contribution to Gross Margins by iTunes is almost zero so the whole concept is little more than a marketing vehicle to drive iPod sales, nothing wrong with that, and it was necessary to have such a vehicle to manage the DRM content the labels insisted upon.
Now that more organisations are coming around to ditching the DRM concept the need for Apple to be in the content business is diminishing.
It is far from inconceivable that a more "bean counter" oriented regime(Sculley who?) could gain control at Apple and iTunes could be gone in a flash.

Cheers



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