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Apple Businesses

Apple Sells A Million Songs in Debut Week 841

Posted by CmdrTaco
from the step-in-the-right-direction dept.
Scrameustache writes "According to an Apple press release, the iTunes Music Store sold over one million songs during its first week. Over half of the songs were purchased as albums, and over half of the 200,000 songs offered on the iTunes Music Store were purchased at least once. Those new iPods are selling like hotcakes too..."
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Apple Sells A Million Songs in Debut Week

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  • Hooray (Score:4, Interesting)

    by cookiej (136023) * on Tuesday May 06, 2003 @08:57AM (#5889892)
    I think the model may work. Let's hope it torpedoes the RIAA completely.
    • Re:Hooray (Score:5, Insightful)

      by bludstone (103539) on Tuesday May 06, 2003 @09:00AM (#5889917)
      Unfortunatly, these sales trends wont continue unless Apple can get more music contracts. No torpedo-ing will happen unless this occurs...

      Even then, does Apple's model adequatly compensate the artist? Does it allow entry for independant artists? Does it even have the potential to work against the RIAA, or will it simply strengthen its grip?
      • Re:Hooray (Score:5, Funny)

        by Alan Partridge (516639) on Tuesday May 06, 2003 @09:08AM (#5889975) Journal
        I THINK you'll find that the more the RIAA tightens it's grip, the more potential music buyers will slip through its fingers.

        Or something.
      • Re:Hooray (Score:3, Informative)

        by nullard (541520)
        There was a link to an interview posted in the last discussion of iTMS sales numbers. In that interview, Jobs said that Apple will begin working on independant music once they've finished uploading all the files that the big 5 have given them. Right now they're really busy just uploading.
      • What Am I Missing? (Score:5, Insightful)

        by RobotRunAmok (595286) * on Tuesday May 06, 2003 @09:47AM (#5890352)
        People wanted to be able to download a wide variety of "good" music, load it onto an MP3 player and burn their own CD from their purchase. By all accounts (except perhaps those of some vocal sixteen year olds who think the world owes them a record collection) Apple has delivered this, They did the research, developed the tech, made the difficult deals, took the risks, generated the buzz, and now I hope they profit handsomely from it.

        The RIAA reps the companies that get the music into the download -- engineers, producers, designers, and, yes, lawyers -- all of whom need to be paid, and will get their slice. The size of that slice is spelled out in a contract which both parties sign. Is the size of that slice "fair?" I dunno. What percentage of the price of that soda finds its way back to the chemists and bottlers? How many pennies on the cigar dollar get back to the guy rolling the leaves? How many nickels on the Big Mac pricetag work their way back to the cattlerancher? Do we stop consuming these products (and a million others) until we "ger answers?"

        Say I'm a small-town chemist who just developed a new flavor -- how do I get my soda bottled and onto the shelves at the 7-11? You mean -- it's not easy?? I can't just pull my truck up to the back of ths store and stock the shelves myself? I have to make a [shudder] DEAL?! Oh, the Injustice!

        Is this new venture going to change the world, overthrow evil, and bring about a Glorious Workers' Revolution? No, silly, it's gonna let you download music easily and legally onto your computers and disks. No more or less than it was designed to do.

        I've never had a use for Apple, Macs, or Steve Jobs, but my hat is off to them on this.
        • by theWrkncacnter (562232) * on Tuesday May 06, 2003 @09:52AM (#5890409)
          Good call.

          This isn't going to hurt the RIAA and bring their downfall. Its going to allow the RIAA to shift their focus by providing a testbed for buying music online in this manner, and its going to show them that it works. In effect, this is only molding the RIAA into something that we all might be able to deal with. But hell, if I can buy my music in this way for all the time to come, I really could care less if the RIAA has a hand in it.

      • Re:Hooray (Score:5, Interesting)

        by Panix (2408) on Tuesday May 06, 2003 @09:49AM (#5890377) Homepage

        I think that you are mistaken here. Apple doesn't need any more contracts, since it already has contracts with all five of the major labels, and the independent labels are reportedly itching to get in on it as well! The model has succeeded already, by giving us a way to purchase current music legally and easily electronically. This is a good thing.

        Now, as far as the RIAA is concerned, and your comments about artist compensation, a lot remains to be seen. I envision independent artists and smaller labels being able to distribute music much easier through the iTunes Music Store, and offering them potential for success. They could release a few "singles" for free on the Music Store, and then hope that people buy more songs, or the whole album. And since they aren't producing any CDs, they have less overhead, and can get more of the profits. Just a thought on how the future could be bright.

    • Re:Hooray (Score:5, Informative)

      by Golias (176380) on Tuesday May 06, 2003 @10:02AM (#5890519)
      I think the model may work. Let's hope it torpedoes the RIAA completely.

      That comment is so amazingly ill-informed, everybody here is a little dumber for having read it.

      The RIAA != the record labels. Yes, they have spent a lot of their resources fighingting Napster, Kazaa, etc., on behalf of the labels, but it also represents almost everybody else in the music recording industry, including artists. In addition to enforcing copyrights, they help establish industry standards (such as that little pre-amp that goes into turntables... okay, younger /.ers might need to ask their fathers what a turntable is.) Saying that this will hurt them is like saying that putting a dent in Sony's hardware sales will somehow hurt the IEEE.

      Furthermore, all of the music sold on the iTunes Music Store is licensed, and those license fees are managed by... guess who? That's right, the RIAA.

      If this takes off, it might kill your local record store (if Best Buy had not done so already) but it will not make the RIAA go away.

  • Cheap, too (Score:5, Informative)

    by Anonymous Coward on Tuesday May 06, 2003 @08:58AM (#5889906)
  • by Hagakure (203111) on Tuesday May 06, 2003 @08:59AM (#5889912) Homepage
    Offerings on P2P networks have almost tripled!
  • Finally (Score:4, Funny)

    by Anonymous Coward on Tuesday May 06, 2003 @08:59AM (#5889915)
    Apple has found something to make it profitable. Quick sell the hardware side of the business.
    • by goombah99 (560566) on Tuesday May 06, 2003 @11:06AM (#5891150)
      according to wired news [wired.com] all of last year there were only half a million online sales of downloadable music from ALL sources combined!!! in one week apple trippled the annual sales of online downloadable music. And The real profit made last week is coming from the 110,000 ipods they sold last week. the profit margin on those is much higher than the million records.

      an that is just to apple user and no one else. imagine if this had been world wide.

      On the otherhand 1 million sales is a tiny drop in the record sales bucket. if there are 1 million songs sold that's less than 100,000 albums sold. which means over the course of a year that will mean about a million album sold if they can sustain this pace. that's trivial. how many times a year does a artist release an album that goes "platinum"? seems to me they are many every year, some from each record label. thus if apple sustains this pace it will only contribute a single platinum album. Of course there may be a large multiplier effect if the profit margins on this are higher/lower than normal album sales.

      What this really shows is how utterly insignificant all of the the other on line music sales were prior to this. they didn't even register: a single mega-record store in NY city could outsell all of the annual online music in a good day prior to apple's involvment. likewise selling CDs by mail also vastly exceeded this market.

      heck AOL sent out more of their free trial disks than that!

      on the otherhand, once this hits the rest of the world and once this hits the windows world. now were talking a large dent in the sales of music online. again remeber their may b eprofit margin mulitpiers too. this will be true in places that yearn for "pop" music but dont have such good access to music stores as in the US. likewise, world artists will be able to crack the US market if apple lets in lables that lack US distribution systems.

      now lets talk about how intrusive the DRM is. its not bad compared to all previous efforts. you can keep your music on a CD so insome sense you own it. but re-ripping it is supposed to be not so good, and thus since digital music is the only way you will be using music in the future having an unrippable high quality CD is not as good as it seems. Apple's tech knowledge base warns you to deauthenticate your mac before you reformat the disk or sell it. its not clear but it seems to imply that you could lose one of your 3 authentications if you dont.

      Apple warns you they are free to change how they authenticate your music when you install it on a new mac any time they wish.

      This lack of clarity over the authentication protool has me worried but not hyperventilating.

      legitmate questions include:

      1)how do I authenticate my music on future macs or ipods if mac sells its music store to someone who either goes out of bussiness or starts charging fees to authenticate. (dont laugh mac switched its bussiness model from free to pay for mac.com and claris works)

      2) Someday i'll want to keep my music on my phone, credit- card computer, ring, implant, etc....will future itunes allow me to move music to non-mac music players?

      3) if my computer is lost, the mother board dies, my hard disk crashes, or a virus eats it, or my employer seizes it before deauthenticate have I lost one of my authentications?

      4) what if I go bankrupt and cant get a visa card. how do I maintain a music store account so I can authenticate?

      5) in the future, will legacy macs that cant run the latest OS also not be able to de-authenticate?

      As I said I'm not hyperventilating, and like 8-tracks and vinyl I dont have the unreasonable expectation that I wont want to replace my music media in the future. but I dont want to be forced to because say apple goes out of the music bussniess.

      and yes I realize I can make an audio CD but its not the same as having bought a CD in the store since the store bought CD will rip to higher audio quality for use in digital players (and I predict in the future all useful players are going to be digital-- there wont be many CD players except as ripping devices)

      • "Re-ripping" quality would be a non-issue, I think. If you want to make another copy of the audio cd you can do a CD to CD copy and get a perfect duplicate. If you want to listen to it digitally, you have the original downloaded file. Now, yes, if you want to convert it to .ogg, .mp3, or whatever then you have some quality issues. I think that they are expecting that hardware manufacturers will switch to their format pretty soon with the amount of sales that they are generating, so it may not be that mu
  • by phillymjs (234426) <slashdot&stango,org> on Tuesday May 06, 2003 @09:00AM (#5889925) Homepage Journal
    Today I found a "New Music Tuesday" mailing in my inbox, from Apple, highlighting almost 20 recent (complete album) additions to the Music Store that are available as of today.

    If they do that many every week, that is seriously gonna bolster their catalog.

    ~Philly
  • Tidbits.com has this morning an interesting overview article [tidbits.com].

    They also discuss the future of iTunes Music Store, quoting from the article:

    Future Moves -- Keep in mind that the iTunes Music Store is a 1.0 release, so there's plenty of room for improvement, such as the following features.

    • I'd like to see Apple expose the links to every track available in the iTunes Music Store, perhaps along with a new URL scheme that would make it trivial to click a link in a Web browser and jump to the song's listing in iTunes. Utilities would undoubtedly appear to let people build Web pages of their purchased songs for showing friends and other visitors. It appears the necessary bits may already be in place; see the link below.

      <http://nslog.com/ archives/ 2003/ 04/ 29/ itms_ links.php [nslog.com]>

    • Also interesting would be music recommendations via the social information filtering researched at the MIT Media Lab (the Ringo music recommendation project) and then tried (unsuccessfully) in the business world as Firefly Networks. The iTunes Music Store already has Amazon-like "Listeners who bought this also bought" links.

      <http://www.acm.org/ sigchi/ chi95/ Electronic/ documnts/ papers/ us_ bdy.htm [acm.org]>

    • Along the same lines, popularity rankings and user comments would also be welcome, much like those on Amazon.

    • Providing full liner notes, preferably with lyrics, would undoubtedly help some people decide what to buy. However, I'm sure the contractual issues surrounding lyrics are complex.

    • I'm fairly unlikely to buy an unknown song based on a 30 second clip. I'd like to see Apple instead stream a low quality version of the entire track. Even better, Apple could create a number of iTunes-based streaming radio stations in different genres. If you like the current (or recent) song, you could click a Buy button to download it instantly.

    • I gather iTunes users with children are interested in some level of parental control over purchases. Something as simple as password-protection for opening the iTunes Music Store itself would suffice.

    • There's currently no way to buy music as a gift currently, but it would be nice to be able to buy a song or album for someone and have Apple automatically send them an iCard with the download link.

    • Realistically, modem users aren't going to be able to use the iTunes Music Store much, but perhaps a future incarnation could offer a mechanism by which Apple would send you a CD containing the AAC files for an additional cost.


    • by AKnightCowboy (608632) on Tuesday May 06, 2003 @09:13AM (#5890019)
      Realistically, modem users aren't going to be able to use the iTunes Music Store much, but perhaps a future incarnation could offer a mechanism by which Apple would send you a CD containing the AAC files for an additional cost.

      Amazon.com does something amazingly like this. You can purchase the product online and they'll ship you out a shiny disc encoded with high quality audio tracks that you can listen to on virtually any compact disc player. It's really revolutionary. :-/

      • by jpsst34 (582349) on Tuesday May 06, 2003 @09:22AM (#5890102) Journal
        Moreover, I heard that there are places that you can go that have these so-called CD's sitting on shelves and you can pick them up, look at them, and at some places, scan the bar code to listen to them. Then if you want, you can give some money and walk away with them. You don't even have to wait for Amazon to take you money and send it to you... or not not send it to you... depending on their mood that day, I guess.
  • by Agarwaen The Tired (471456) <webmasterNO@SPAMagarwaen.com-us.net> on Tuesday May 06, 2003 @09:03AM (#5889946) Homepage
    Most people aren't thieves. The merely want their content delivered the way they want it. It should be simple for a company to offer a better downloading experience then a decentralized p2p. I'd be willing to pay if the offer me more value then p2p programs. By that I mean easier searchs, high quality files, ability to find related music, and better availibility. RIAA has really been doing nothing but shooting itself it's foot and watching it bleed.
  • by RalfM (10406) on Tuesday May 06, 2003 @09:05AM (#5889961) Homepage

    If they weren't restricting to credit cards with a US billing address. Like VISA isn't the same globally?

    Ralf

    • by DLG (14172) on Tuesday May 06, 2003 @09:16AM (#5890043)
      My understanding on this is that it has more to do with licensing of the music. It is a different matter to get US distribution rights than worldwide. I do not doubt that Apple is working to extend their rights, as the European market is significant to Apple's hardware sales, but you can't really blame them for not waiting. A big part of their leverage to get better worldwide rights as well as an increased catalog will be the success of their first steps.

      Obviously they aren't having a bad start of it, and they have recieved really great press. I know people who are considering buying macs and ipods based on this.

    • by MouseR (3264) on Tuesday May 06, 2003 @09:17AM (#5890047) Homepage
      It's not about billing adress. It's about legislations governing copyrights and distribution agreements with the respective music companies.

      Apple has to work out specific legal issues before it can distribute the music to other countries.
    • I am pretty sure the restriction was with having the rights to international distribution worked out yet. Either on the Apple site or in the press release it states that they are working that out. Since the technology should be the same, i am guessing it's a legal issue. Odds are they will not have international rights to EVERYTHING in the catalog, so they will have to modify the store to display songs by the user's location. Maybe they will get past it, but in general stores/distros are restricted to certa
    • by hafree (307412) on Tuesday May 06, 2003 @09:21AM (#5890086) Homepage
      If they weren't restricting to credit cards with a US billing address. Like VISA isn't the same globally?

      The problem is fraud prevention. Who's to say you couldn't go on a shopping spree and accumulate 1000 new songs overnight with someone else's credit card? As can be seen from the current RIAA vs. Verizon case, the ISP won't likely help identify the thief in a civil suit, and most credit card companies could care less about fraud prevention in a criminal suit so long as they get their money. And that's just in the US - credit card fraud overseas is much more difficult to trace and prosecute. For now, it's probably just a case of cover-your-ass...
    • by goldcd (587052) * on Tuesday May 06, 2003 @09:27AM (#5890147) Homepage
      but I suspect it's due to licensing arrangements. Often the same artist is represented by different labels in different territories - he might have been signed in the UK by a small Indie, but needs big-muscle distribution to break the states etc. Big distributer sells in the US, indie still sells in UK.
      This causes problems online though as customers and territories are now now no longer tied together - you could buy from whichever territory offered the cheapest identical product. One big free market.....nope, couldn't have that, could we? so that's why you need a US Visa.
  • by taeric (204033) on Tuesday May 06, 2003 @09:06AM (#5889965)
    How much of this success is due to this being a truly significant advance in implementations versus Apple simply having a heavy presence in the market?

    I'm not trying to sideline the significance of the success, I'm just questioning why it is really successful. From what I have heard, this is not all that much different than approaches that others took earlier (Didn't eMusic, the popular word among those that don't like iTunes, originally sell per song?).

    Alternatively still, maybe the market is just now ready for such a store model as this. Timing is, afterall, very important in delivery of a product to market. Too early can be as devastating as too late.
    • Why did it work? (Score:5, Insightful)

      by ArsSineArtificio (150115) on Tuesday May 06, 2003 @09:14AM (#5890026) Homepage
      How much of this success is due to this being a truly significant advance in implementations versus Apple simply having a heavy presence in the market?

      The secret is in the direct tie to iTunes. It's difficult to overstate how convenient it is to be able to shop for music within your music player as opposed to fiddling with some web-based download service.

      This is the kind of thing which Apple's control over hardware, software, and consumer applications together permits it to excel at. What is astonishing is that Microsoft has proved so poor at this kind of coordination.

      ASA
      • Re:Why did it work? (Score:5, Interesting)

        by Brento (26177) * <brento@brentoz a r . c om> on Tuesday May 06, 2003 @09:22AM (#5890097) Homepage
        This is the kind of thing which Apple's control over hardware, software, and consumer applications together permits it to excel at. What is astonishing is that Microsoft has proved so poor at this kind of coordination.

        Then why do people always protest Microsoft's bundling of browsers, media players, etc with the OS?

        If Apple is "good" for bundling applications and not giving consumers the choice (for example, the music purchasing ONLY works with iTunes), then why is Microsoft "bad" for including IE and Windows Media Player with the OS? And can you imagine the outcry if Microsoft began selling music inside Windows Media Player? Slashdot would be screaming about the monopoly.
        • Re:Why did it work? (Score:3, Interesting)

          by phillymjs (234426)
          If Apple is "good" for bundling applications and not giving consumers the choice (for example, the music purchasing ONLY works with iTunes), then why is Microsoft "bad" for including IE and Windows Media Player with the OS?

          Okay, let's look at the browser example. Say I don't like Safari (which most likely will be bundled with OS X 10.3 instead of IE). I am free to trash it and go back to using IE. Can you get rid of the bundled browser in Windows so easily? Nope.

          Apple rolls their own software and bundles
        • Re:Why did it work? (Score:5, Informative)

          by lunenburg (37393) on Tuesday May 06, 2003 @09:45AM (#5890325) Homepage
          Then why do people always protest Microsoft's bundling of browsers, media players, etc with the OS?

          If Apple is "good" for bundling applications and not giving consumers the choice (for example, the music purchasing ONLY works with iTunes), then why is Microsoft "bad" for including IE and Windows Media Player with the OS? And can you imagine the outcry if Microsoft began selling music inside Windows Media Player? Slashdot would be screaming about the monopoly.


          The difference is that one company is an illegal monopoly, convicted of antitrust violations, and has a history of using its monopoly power to eliminate all competition in areas it enters with new products, whereas the other company is a small niche competitor that poses no threat to dominate the personal computer market and stifle innovation.

          It may not be an ideal world, but them's the breaks.
    • by feldsteins (313201) <scott@scottfelds t e in.net> on Tuesday May 06, 2003 @09:27AM (#5890150) Homepage
      How much of this success is due to this being a truly significant advance in implementations versus Apple simply having a heavy presence in the market?

      Put simply, it's both. Apple has great brand recognition, marketing muscle and a loyal customer base. But none of that should take away from the fact that this is a significant advance in implimentation.

      How? Well, basically the only games in town for legit online music downloading involved one or more of the following onerous "gotchas."

      1. Rental of music. That is, you don't pay your monthly subscription, you can't listen to "your" music anymore. At $20 per month, this starts to get pretty stupid. No mystery why this never took off.

      2. Over-zealous DRM after downloading. Once the file is on your computer you can't burn a CD. Or you can, but only certain tracks. Or only if you pay an additional fee. Only one CD, please. Etc., etc., etc. Transferring the file to another machine? Hassle. Quibbles about Apple's "Fairplay" DRM technologies notwithstanding, they're lightyears ahead of what came before.

      Apple hasn't gotten it 100% right, but they clearly are hitting the 95% mark and one expects the model to be refined further still. Other services have been consistently below the 50% if you ask me. Not that it was their fault! The RIAA basically either owned these downloading services or at the very least severely restricted the terms of the music licenses. That is to say, the RIAA killed those other services before they were born.

      One of the greatest achievements of the iTMS isn't the fact that clever Apple engineers came up with a great idea first - hell, everyone knew the basics of what was needed for online music downloading business to be sucessful. But the RIAA wouldn't allow such a model! No, cleverness aside, the great achievement is the fact that the Big Steve managed to convince the record companies that his model was a good idea for them. Obviously they had rejected such liberal, consumer-friendly models countless times before. I'm recalling a quote from the top guy at Sony that said (paraphrasing here!) "I think it was about fifteen seconds after Steve started talking that I decided to license our entire library to him."

      "Reality Distortion Field"? Maybe. However he did it, he managed to get the RIAA to swallow a viable music downloading business model. Viable because it contains enough rights for customers for them to put down their hard earned cash and enough controls for content providers to put up their wares.
    • by DLG (14172)
      I would say there are two reasons that come to mind.

      #1. iTunes is a very good way of delivering the music. My wife downloaded an album (Mr. Heartbreak by Laurie Anderson) and in about a minute it started playing while downloading the rest. It downloaded FASTER than it would have taken to rip the music ourself. As my wife said, if you need to get an album for some reason quickly (going to a dance party and you want to bring it) you can download an album and be out the door in 10 minutes (if you have an ipod
  • by Sarin (112173) on Tuesday May 06, 2003 @09:06AM (#5889966) Homepage Journal
    Anyone knows how an independant artist/band have their own album added to the list, I looked for info, but I couldn't find it anywhere on the itunes site.
  • 3. Profit? (Score:5, Interesting)

    by Cereal Box (4286) on Tuesday May 06, 2003 @09:13AM (#5890017)
    I'm still not sure how this service is going to make a lot of money. While a million tracks may sound impressive, you need to keep in mind that it's quite unlikely that they can keep that rate up for very long.

    If the tracks were all sold as singles (they weren't) and if Apple kept all the money from the sale (they don't) AND if they could keep up their one million songs per week rate (doubtful), then by the end of a year they've made $52 million. Take out administration costs (I have no idea what they are, but I'm guessing they must be fairly significant) and the RIAA's big cut, and I'm guessing Apple would be left with somewhere in the neighborhood of $30 million after a year, and that's ONLY if they keep up the sales rate they had in their initial week every week of the year. Sure, $30 million in revenue is nothing to sneeze at, but it's not going to convince anyone that online music sales are worthwhile.

    Remember, $30-50 million is equal to the revenue from a couple platinum albums, and isn't enough to finance nearly as many artists as the current model can (keep in mind that every "flop" gets subsidized by hit records). I would expect that if the recording industry were to switch to this model that MORE over-produced pop garbage would be pushed since the dramatically lower revenues would keep the companies from taking many risks with "alternative" artists. And you thought it was bad now...
    • Re:3. Profit? (Score:5, Informative)

      by FullCircle (643323) on Tuesday May 06, 2003 @09:35AM (#5890211)
      Selling a million of any new service in this short period of anything is impressive. What other service has had similar success?

      So far, this is marketed to a group of people:

      Who own a Mac
      AND Who own iPods
      AND live in North America

      What is that, 1% of Apples 2% market share?

      Once it hits PC's with other players, it could become huge overnight.

      Even if the company "only" makes $30 million...
      What has happened to the world when making "only" $30 million is a bad thing?

      Besides the service only just started last week, normally sales of a new service start out slow and grow as people test the waters and if it's safe, others jump in. There is little word-of-mouth advertising yet. And up till now, who needed an overpriced iPod? Now it seems like a better investment.

      If the price of entry for unsigned artists is is the cost of studio time, plus paying Apple for server space there could be MORE alternative artists in the mix. This is assuming the labels haven't locked out the independents.

      There is much more good potential in the service than you give it credit for.

      • Re:3. Profit? (Score:3, Interesting)

        by Graff (532189)

        There is much more good potential in the service than you give it credit for.

        Not to mention that, while I'm sure they are thrilled to make money on selling music, Apple is a COMPUTER company. All of the hype for the iTunes Music Service is free advertising for the Macintosh. It is sure to help boost sales of Macs, MacOS X 10.2, iPods, and all the other little goodies Apple sells.

        It's like the Apple stores, even if the Apple stores or the music business break 100% even, they will still be worth it for

    • Re:3. Profit? (Score:5, Insightful)

      by binaryDigit (557647) on Tuesday May 06, 2003 @09:41AM (#5890274)
      I'm still not sure how this service is going to make a lot of money.

      Well obviously $30mil in profit is nothing to sneeze at. Plus for Apple we're talking about an adjunct to their primary business. I know some others are talking about "replacing" the current model, but Apple would be more than happy to have a reliable $30mil coming in every year.

      But one aspect you're missing is, how many more ipods are being sold because of this? How many more Mac "switchers"/converts are being created now? This is just another way for Apple to create market share for themselves by adding value to computers, taking them beyond just generic tools and making them useful for more people (other than surfing of course). Plus, it gets them in bed with the entertainment industry even more. With Steve's association with Pixar and therefore Disney, the next obvious step would be some type of video distribution. I'm not talking general purpose VOD, nope, I'm talking things like kids shows and cartoons, where the demand for high resolutions (and therefore bandwidth) isn't nearly as much as more adult fare.

      So overall you can't look at this as a thing upon itself. It is merely part of the bigger picture that Apple to drawing to keep itself significant in the market. Kudos to them.
    • Re:3. Profit? (Score:3, Insightful)

      by MarkedMan (523274)
      >if they could keep up their one million songs per week rate (doubtful)

      I wouldn't assume they can't keep that rate up. Of course, it may slack off for a while, but bear in mind the service is currently available to only a very, very small segment of the potential market: Apple users (5%) who use iTunes or own an iPod (??%, but certainly less than 100%). When they release their Windows version, it should ramp up sales by at least an order of magnitude. When they get the European and Japanese online, i
  • by klubar (591384) on Tuesday May 06, 2003 @09:14AM (#5890031) Homepage
    1 million songs at $0.99 is about $1 millions/week. Assuming that the demand stays constant--which is unlikely as there was probably pent-up demand, as well as let's give it a try users in the first week--the total revenue for the year will be about $52 million. Although this sounds like an astounding success, it is less than 0.2 percent of Dell's revenue (FY03 revenue $35.4 billion), and less than 0.02% of Walmart's revenue ($218 billion). And it will only account for 1% of Apple's revenue.
    • by ArsSineArtificio (150115) on Tuesday May 06, 2003 @09:19AM (#5890072) Homepage
      1 million songs at $0.99 is about $1 millions/week. Assuming that the demand stays constant?which is unlikely as there was probably pent-up demand, as well as let?s give it a try users in the first week?the total revenue for the year will be about $52 million. Although this sounds like an astounding success, it is less than 0.2 percent of Dell?s revenue (FY03 revenue $35.4 billion), and less than 0.02% of Walmart?s revenue ($218 billion). And it will only account for 1% of Apple?s revenue.

      Note also that Apple doesn't keep the entire $0.99 - about $0.65 of it goes to the record label.

      It's important however that this is very high-margin revenue. Apple's cost of sales here is recouping the cost of developing the service, plus the bandwidth, plus the credit card processing fees, plus the cost of having developers maintain the service. This has got to be pretty low compared to pressing CDs to put into cardboard boxes - let alone manufacturing computing machinery.

      And Apple plans to roll it out to Windows users later this year - which should increase the revenue stream considerably.

      ASA
  • by Schlemphfer (556732) on Tuesday May 06, 2003 @09:15AM (#5890036) Homepage
    I was given an iPod about six months or so, and it's the best toy I've ever owned. There's nothing like flying coast to coast, and having 5000 songs to choose from. And it made my recent cross-country road trip a joy...the only thing that could have made it more perfect for road trips is if the unit included a laser jammer to keep me from getting nailed at that speed trap in Cleveland.

    It blows my mind that Apple has been able to improve on the iPod. As if the original's form factor was too thick (not quite as thick as a deck of cards), they still somehow cut it almost in half.

    I played around with the new music service this week. Super impressively done. Having said that, I don't think I'll order any music from it. The record companies have shown themselves to be complete bastards for decades now, in how they screw over the public and the artists. I hate to think that Apple's now riding to this industry's rescue, perhaps only a year or two before the entire industry would go down the crapper. If there was only some way I could use this service with the bulk of the money going straight to the artist, I'd be incredibly enthusiastic about this whole thing.

    I'm always thrilled to see Apple succeed at something, since I think they tend to make beautifully designed products. I just hope that this success isn't the event that keeps the parasitic recording industry form withering away.

    • I'm always thrilled to see Apple succeed at something, since I think they tend to make beautifully designed products. I just hope that this success isn't the event that keeps the parasitic recording industry form withering away.

      Anything which encourages people to purchase music directly by cutting out the retail link can only help artists in the long run. If people get used to this kind of thing, they're much more likely to purchase music from independent artists someday - because independent artists wi
      • Anything which encourages people to purchase music directly by cutting out the retail link can only help artists in the long run.

        This doesn't cut out the retail link though. It simple eliminates your local record store and replaces it with Apple.

        If people get used to this kind of thing, they're much more likely to purchase music from independent artists someday - because independent artists will probably never be able to afford to get their CDs into record stores, but it won't be too much trouble for them to get onto download services.

        Sure, assuming Apple don't end up with a near monopoly. This kind of thing suffers a classic network effect - can you see people joining 20 or 30 different download services to get their music? No, they'll use the ones that are most convenient - ie the ones that are integrated with their computers. I don't know for sure but I'd bet a lot that Apple won't be allowing eMusic to plug into iTunes anytime soon.

        Right now the price Apple charges for getting a track onto this service is about 30-40 US cents, something around that figure. If they become a dominant middle man, who's to say that Apple won't start putting on the squeeze to up the margins just like the big bad old record companies did? They are all shareholder owned at the end of the day.

  • API (Score:4, Insightful)

    by jfedor (27894) <jfedor@jfedor.org> on Tuesday May 06, 2003 @09:40AM (#5890265) Homepage
    They should expose their store through XML-RPC or SOAP, so that I can write my own iTunes. The money would still go to them.

    (Never gonna happen, I know.)

    -jfedor
  • by Siener (139990) on Tuesday May 06, 2003 @10:02AM (#5890523) Homepage
    Success of Apple Music Store Proves Apple Users Will Overpay for Anything

    Cupertino, CA - Apple's recent announcement that over 1 million songs had been purchased in the first week of its new music store's existence presents undeniable proof that Apple users will overpay for anything.

    More at BBSpot [bbspot.com]

  • AAC questions (Score:3, Interesting)

    by Petronius (515525) on Tuesday May 06, 2003 @10:06AM (#5890561)
    Does the user ID of the person downloading the file get embedded in the AAC file in any way? Have AACs showed up on Kazaa yet?

    Just curious, I don't own a Mac and I stopped using p2p nets.
    • Re:AAC questions (Score:4, Insightful)

      by nsayer (86181) <[moc.ufk] [ta] [reyasn]> on Tuesday May 06, 2003 @10:56AM (#5891049) Homepage
      1. Yes, the user-id appears in the file
      2. It would be pointless to put the AAC file up on Kazaa because no one else can play it.
      3. You could use iMovie to export an AIFF of the audio, then re-encode it to DRM-less AAC or MP3 if you like, and then upload it to Kazaa, but that would be indistinguishable from someone who bought the CD, ripped a track, and then did the same thing.
  • I'd buy a million songs from myself as a PR stunt; while I was at it, I'd buy them as albums in order to make things look good to the music industry that I'm trying to woo.

    Money can't buy everything, it's true, but it can buy a press release that may impress the idiots who run the music industry.

    A million dollars a week is only 52 million dollars a year - that is CHUMP CHANGE. How much of that do you think went to the music industry? It's gonna take money, a whole lotta spendin' money, to make it worthwhile for the distribution oligopoly to embrace this.
  • by Mac Degger (576336) on Tuesday May 06, 2003 @10:08AM (#5890577) Journal
    Vindication.

    And a bute rebuff against what the **AA's are trying to do; here is proff that they've been trying to defend an outdated bussines model.
  • by LaughingElk (139664) on Tuesday May 06, 2003 @10:20AM (#5890694)
    iTunes Man
    To the tune of "Piano Man" by Billy Joel
    Filk by Scott Taylor

    It's nine o' clock at the iTunes store,
    A phenomenal crowd's logging on,
    There's an old man on AOL
    Finding music from ages bygone.

    He says, "Steve can you play me a memory?"
    "I'm not really sure how it goes"
    "But I typed in a track and got album names back!"
    "And I'm not even wearing my clothes!"

    Oh la da da diddy da da, la da diddy da da da.
    Sell us a song, you're the iTunes man,
    Sell us a song tonight.
    Well, we're all in the mood for a melody,
    And you've got the pricing just right.

    Now Claude at Vivendi's a friend of mine
    And his business is selling CDs.
    And knows the solution for store distribution,
    But he's worried about MP3s.
    He says "Steve I believe this is killing us"
    "All these pirates don't pay us a dime."
    "Well I'm sure that you could be a billionaire"
    "If you could sell music online."

    Oh la da da diddy da da, la da diddy da da da.
    Sell us a song, you're the iTunes man,
    Sell us a song tonight.
    Well, we're all in the mood for a melody,
    And you've got the pricing just right.

    Now Paul is an iPod enthusiast
    Who listens to Jazz with his wife
    And he's chatting with Maxine, who's still in the rap scene
    And probably will be for life.
    And the waitress is downloading Dixie Chicks
    As the dial-up man slowly gets Stones
    Yes they're sharing the bandwidth from Akamai
    But it's better than P2P clones.

    Sell us a song, you're the iTunes man,
    Sell us a song tonight.
    Well, we're all in the mood for a melody,
    And you've got the pricing just right.

    Its a pretty good crowd for just Macintosh
    And the PC guys give me a smile
    Cause they know that iTunes will be Windows-bound soon
    If they just can hold out for a while.

    And the AAC sounds like originals
    And rights management isn't a pain,
    And they sit at the screens of their iTunes machines
    And say "Man, this is worse than cocaine!"

    Sell us a song, you're the iTunes man,
    Sell us a song tonight.
    Well, we're all in the mood for a melody,
    And you've got the pricing just right.

  • by prator (71051) on Tuesday May 06, 2003 @10:35AM (#5890831)
    I've seen at least a dozen post in these Apple Music Store stories telling people that ask if they can download a song again to backup (complete with bold font to show their superior intellect).

    Who has the time to do these constant backups of all the random crap on your computer. I try hard to keep copies of stuff like tax records, but I don't backup my music collection or other random junk.

    Apple should allow people to download the songs again that they've already purchased. Live Phish [livephish.com] allows you to do this. Maybe there is some DRM issue that makes this difficult, but, otherwise, I don't know why they wouldn't allow this.

    -prator
  • Lots of Questions (Score:5, Interesting)

    by Snork Asaurus (595692) on Tuesday May 06, 2003 @10:52AM (#5891016) Journal
    Not many answers. Hey /. editors, how about trying for a Steve Jobs interview? Maybe he'd like to use the opportunity to hype his stuff anyway.
  • by psyconaut (228947) on Tuesday May 06, 2003 @10:57AM (#5891072)
    I showed a relatively geeky PeeCee user iTunes and the iTunes music store the other day. He'd kind of wondered why me (the person who goes into his company to administer their Sun/Sybase servers) carries a Powerbook G4.

    He was pretty awe struck when he saw the iTunes store, and also pretty impressed with how slick iTunes was in general. Notably, he was impressed with the amount of initial content Apple had up there, the fact that it downloads (and displays) album cover art, and the fact that previewing songs is STREAMED and not downloaded, meaning you can preview quickly.

    He was equally impressed with my transparent terminal windows too ;-)

    I'm not joining the "Macs are better than PCs" camp, just an interesting observation on what a PC user thought...he liked the transparent windows and the iTunes music store...which are BOTH things that are quick and easy to demonstrate at the point of sale....so maybe Apple might be able to "switch" a few more PC users with the tightly integrated music store?

    YMMV.

    -psy
  • Rocket Science (Score:3, Interesting)

    by blunte (183182) on Tuesday May 06, 2003 @11:13AM (#5891221)
    This is not rocket science.

    Cheers to Apple for doing nearly the obvious (and that which record companies thus far have been unable to do, perhaps due to lack of vision (heads in asses and such)).

    Now someone tell my why RIAA's members have been so busy chasing the negative side of internet music distribution instead of implementing something like this. In fact, it's likely that MP3.com might have arrived at something similar to this, had they not been on the wrong end of pointy lawyers.

    There's no magic in this formula. The only really creative aspect is perhaps the user interface presented by Apple. There's no good reason the record companies couldn't have done this themselves, with good developers.

    Of course, there's a negative side to this. Apple is (inadvertently?) furthering the status quo in the music industry. I think the music industry had been heading for a major shakeup, where artists were going to gain some control back over their works (not to mention some real compensation).

    So, *cheers* and *jeers* I guess :)

  • by WaldorfSalad (670169) on Tuesday May 06, 2003 @11:16AM (#5891249)
    Here's why I think Apple's model works where other services fail:

    First, it's more convienent than going to a brick-and-mortar music store. I don't have to get in the car and go anywhere, I don't have to dig through the racks to maybe find what I'm looking for, and I don't have to stand in line to hand one of the pierced nation my money.

    Second, Apple's pricing scheme is right on the money. Been looking for a couple of tracks? Buy just the ones you want. Want the whole album? OK then.

    Third, the tie-in to the iPod is great. While I don't have an iPod yet, I can imagine how much simpler it will be to download songs from the store directly to the iPod without having to rip the CD.

    I think the reason so many people steal music (and if you don't pay for it, it's stealing) is that convienence factor. I've used Kazaa on my wintel laptop and iSwipe on my iBook to grab tracks from things I used to own on tape (yes, I was probably stealing. I feel bad about it, really). It's always been a big hassle to find exactly the track I want, correctly ripped, on a site with enough bandwidth to support the download etc etc etc.

    Apple has made it easy and cheap to find what I want. DRM? I don't care, because I'm not going to be reposting my songs to a P2P network. I'll be burning CD's for use in the car, and I can take a CD anywhere.

    I don't forsee Apple being the big dog in the online music business forever, but, as usual, they've shown the rest of the computing world that it can be done, and the method works.

  • Here's the deal... (Score:5, Insightful)

    by YllabianBitPipe (647462) on Tuesday May 06, 2003 @11:34AM (#5891435)

    There are three types of people posting on this thread.

    1: The cheap bastards who at no price except for free, will music be cheap enough. These people are impossible to satisfy with a realistic business model.

    2: The vast majority, who just care about price. DRM is acceptable as long as it's wussy and if the price is cheap enough, who cares. A little bit of inconvenience due to DRM is no big deal if the price is low enough (and mind you, the DRM on these AAC files is pretty wussy).

    3: A loud minority for whom a purchase from the iTunes store is a political one, that feel supporting any DRM is supporting the powers that be, the music industry, the RIAA, etc. These are the types of people for whom any purchase can be a political statement. The types of people who berate you for shopping at WalMart or eating a hamburger because it supports the corrupt meat-packing industry. They have a point, but they are in the minority ... most people don't sit and go through a checklist trying to figure out which product is doing the most harm to which people before they go out to the grocery store and shop.

    The money is at #2. #1 will never be satisfied and #3 will never shut up. Go get the money, Apple.

  • by pjgeer (106721) on Tuesday May 06, 2003 @12:08PM (#5891827) Journal
    Name your own price for songs. I wonder which tunes would command the highest prices?
  • by mrpuffypants (444598) <mrpuffypants@gma3.14159il.com minus pi> on Tuesday May 06, 2003 @12:15PM (#5891907)
    When I dropped by the Aple Store in Dallas last week to get my iBook serviced I was talking to the mac genius about the iTMS, iPod, and other stuff. He said that they have been getting calls literally all day from independent artists that want to get their music on the service.

    I think it'd be great if that did happen: if people could get their music on the service by bypassing the record companies and the RIAA. It would practically make Apple into a music company without having to buyout Universal.
  • by webslacker (15723) on Tuesday May 06, 2003 @02:59PM (#5893672)
    Very few people have mentioned this, and I think it bears notice.

    The sales so far only represent Mac owners in the United States.

    How much larger is the Windows user base? We're going to have a Windows version later this year.

    How much larger is the international market? Apple's going to start taking International sales soon.

    On top of that, Fortune magazine reports that Apple is in talks with AOL to have iTunes be the official music player/music store of America Online. How many more sales will that be?

    We're only seeing the tip of the iceberg, folks.

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