cumulus
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Is Apple Going To Shut ITunes Store?

Wed Oct 01, 2008 6:36 pm

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
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yooyoo
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RE: Is Apple Going To Shut ITunes Store?

Wed Oct 01, 2008 6:46 pm



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

Surely you can download Disney tunes at some other site?  Wink
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ManuCH
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RE: Is Apple Going To Shut ITunes Store?

Wed Oct 01, 2008 7:08 pm

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.
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Dreadnought
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RE: Is Apple Going To Shut ITunes Store?

Wed Oct 01, 2008 7:44 pm



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).
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ThePRGuy
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RE: Is Apple Going To Shut ITunes Store?

Wed Oct 01, 2008 8:13 pm

Empty empty threat it ain't gona happen
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KFLLCFII
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RE: Is Apple Going To Shut ITunes Store?

Wed Oct 01, 2008 8:40 pm

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.
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jetblueguy22
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RE: Is Apple Going To Shut ITunes Store?

Wed Oct 01, 2008 11:01 pm



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.
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cumulus
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RE: Is Apple Going To Shut ITunes Store?

Thu Oct 02, 2008 6:56 am



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

No!!!!!!!!!!!!
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stasisLAX
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RE: Is Apple Going To Shut ITunes Store?

Thu Oct 02, 2008 7:03 am

iTunes is how Apple is making massive profits - they're not making much of a profit from the sales of iPod units alone.
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ThePRGuy
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RE: Is Apple Going To Shut ITunes Store?

Thu Oct 02, 2008 8:48 am



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.
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cumulus
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RE: Is Apple Going To Shut ITunes Store?

Thu Oct 02, 2008 5:55 pm



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!!
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cumulus
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RE: Is Apple Going To Shut ITunes Store?

Thu Oct 02, 2008 6:30 pm

What Goes Up Must Come Down, Hopefully In One Piece!
 
KFLLCFII
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RE: Is Apple Going To Shut ITunes Store?

Fri Oct 03, 2008 12:38 am

"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."
 
austinairport
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RE: Is Apple Going To Shut ITunes Store?

Sat Oct 04, 2008 6:11 pm

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
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ThePRGuy
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RE: Is Apple Going To Shut ITunes Store?

Sat Oct 04, 2008 7:16 pm



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.
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sovietjet
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RE: Is Apple Going To Shut ITunes Store?

Sun Oct 05, 2008 2:59 am



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 
 
NWADC9
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RE: Is Apple Going To Shut ITunes Store?

Sun Oct 05, 2008 5:18 am



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

Can't earn FF miles/Amtrak Guest Rewards Points through Amazon...
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KFLLCFII
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RE: Is Apple Going To Shut ITunes Store?

Sun Oct 05, 2008 8:20 pm



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

I'll take my sound quality.  Smile
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HapppyLandings
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RE: Is Apple Going To Shut ITunes Store?

Sun Oct 05, 2008 8:57 pm



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.
 
Klaus
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RE: Is Apple Going To Shut ITunes Store?

Sun Oct 05, 2008 9:23 pm



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.
 
Springbok747
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RE: Is Apple Going To Shut ITunes Store?

Sun Oct 05, 2008 9:56 pm



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.
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Klaus
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RE: Is Apple Going To Shut ITunes Store?

Sun Oct 05, 2008 10:09 pm



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.
 
HapppyLandings
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RE: Is Apple Going To Shut ITunes Store?

Mon Oct 06, 2008 2:41 am



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..
 
Klaus
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RE: Is Apple Going To Shut ITunes Store?

Mon Oct 06, 2008 3:02 am



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, ...).
 
Stealthz
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RE: Is Apple Going To Shut ITunes Store?

Mon Oct 06, 2008 3:48 am

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.

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