Apple Announces 25 Million Song Downloads

Tweder writes "On Apple's iTunes site, Apple has announced that music fans have purchased and downloaded over 25 Million songs from the iTunes Music Store. It seems the launch of the ITMS on the Windows platform has boosted sales tremendously." I suppose this is where I am expected to say something along the lines of, "I thought the recording industry said that this business model wouldn't work, that people won't pay for what they can download for free?" So, there you go.

Re:0 from me thanks to DRM

[LostCluster]

download song > burn to CD > rip to DRM-free mp3 > enjoy

Of course, I agree in practice, as this eats CD-Rs like mad, and adds at least $0.02 per track, not including time-costs.

Seems like that's all the copyright police are really demanding. Not that it be impossible to de-DRM stuff, or even hard to understand, just annoying. You can't even say that this is an analog hole attack, because that entire path starts digital and stays digital.

Quality loss? Nope... just byte bloat in that path. You could make a perfect copy to an uncompressed .wav from the CD with no loss. You compress to a higher-quality-than-you-ever-had-in-AAC bitrate MP3 with no loss. If you're already using 128kbps MP3s, you've already said you're willing to trade a little quality for bit savings...

So really, saying you're boycotting anything that has any DRM at all is throwing a baby out with the bathwater. This is DRM that's so easy to defeat you can't call it a respectable hack.

Re:0 from me thanks to DRM

[droleary]

I want the freedom to use it on whatever device I want, with whatever software I choose.

God I hate all the moronic comments along these lines every time this topic comes up. YOU DO HAVE THAT FUCKING FREEDOM! At least as much as you do with a CD. Or are you one of those people who wants the freedom to use a CD on whatever device you want? News flash: a CD is also a form of DRM as well as a type of compression (called digitization). It's just that you're so familiar with it and the methods used to access the music that you don't think twice about that stuff. Apple has, by far, the least restrictive online music distribution scheme and all your bitching isn't producing anything better. I'd thank you to put up or shut up.

Re:Why do we need the recording industry?

[Dominic_Mazzoni]

The problem with Itunes is it takes the flawed recording industry and extends their monopoly.

Guess what? The iTunes Music Store has hundreds of thousands of songs from independent labels. Labels that are not members of the RIAA. Including many labels that give their artists much better deals.

I'm a jazz fan, so one of my favorite labels is Concord Records [concordrecords.com], with such artists as Poncho Sanchez and Karrin Allyson. Go ahead, log on and listen to them, you might enjoy it. And supporting them doesn't support the RIAA!

RIAA Radar [magnetbox.com] is a neat site that lets you search for your favorite artist or label and find out whether they're RIAA-free or not.

Re:Profit?

[Llywelyn]

There are no plans to change this. Over time they hope to break even on iTMS and make money almost exclusively on iPod sales.

On iPod sales. This bears repeating.

So long as they are making money as the result of iPod sales, there is no "wondering where their money went"--there is a net gain so long as that, as a result of iTMS, they sell enough iPods to make up the difference.

According to their recent report iPod sales increased enormously thanks to iTMS, so they can afford to take a small loss in one area (that they hope to break even in one day) to boost another.

Re:This business model wont work. This is marketin

[Dominic_Mazzoni]

I already posted this above, but it needs repeating.

Not all music labels are members of the RIAA. Just the big ones. Lots of great artists are signed with independent labels, many of those labels don't screw their artists, and many of those good independent labels are on iTunes.

Wondering whether your favorite band is RIAA-free or not? Click here... [magnetbox.com]

Re:Credit Where Credit's Due

[Kircle]

Well, Jobs talks a little about that in his interview [rollingstone.com] with Rolling Stone Magazine. One of the most interesting quotes I think from the article relates to how he convinced the labels to go along with his idea of a music store:

When we first went to talk to these record companies -- you know, it was a while ago. It took us 18 months. And at first we said: None of this technology that you're talking about's gonna work. We have Ph.D.'s here, that know the stuff cold, and we don't believe it's possible to protect digital content.

Of course, music theft is nothing new. Didn't you listen to bootleg Bob Dylan?

Of course. What's new is this amazingly efficient distribution system for stolen property called the Internet -- and no one's gonna shut down the Internet. And it only takes one stolen copy to be on the Internet. And the way we expressed it to them is: Pick one lock -- open every door. It only takes one person to pick a lock. Worst case: Somebody just takes the analog outputs of their CD player and rerecords it -- puts it on the Internet. You'll never stop that. So what you have to do is compete with it.

At first, they kicked us out. But we kept going back again and again. The first record company to really understand this stuff was Warner. They have some smart people there, and they said: We agree with you. And next was Universal. Then we started making headway. And the reason we did, I think, is because we made predictions.

We said: These [music subscription] services that are out there now are going to fail. Music Net's gonna fail, Press Play's gonna fail. Here's why: People don't want to buy their music as a subscription. They bought 45's; then they bought LP's; then they bought cassettes; then they bought 8-tracks; then they bought CD's. They're going to want to buy downloads. People want to own their music. You don't want to rent your music -- and then, one day, if you stop paying, all your music goes away.

And, you know, at 10 bucks a month, that's $120 a year. That's $1,200 a decade. That's a lot of money for me to listen to the songs I love. It's cheaper to buy, and that's what they're gonna want to do.

They didn't see it that way. There were people running around -- business-development people -- who kept pointing out AOL as the great model for this and saying: No, we want that -- we want a subscription business. We said: It ain't gonna work.

Slowly but surely, as these things didn't pan out, we started to gain some credibility with these folks. And they started to say: You know, you're right on these things -- tell us more.

Re:Where does your money go?

[Matt - Duke '05]

40% of the purchase goes to iTunes, 30% goes to the label (which may or may not be an RIAA member), 10% goes to an intermediary middleman (if one exists) such as Amazon.com or AOL, 8% goes to the publisher (I think this is ASCAP, but I'm not really sure), and the remaining 12% goes to the artist. According to the article on Business 2.0 entitled The MP3 Economy: How labels and artists divvy up your MP3 dollar [216.239.39.104] that these statistics were taken from, "twelve percent is average, but successful bands often hammer out better contracts. In many major-label contracts, charges for 'packaging' and promotional copies are subtracted from the artist's cut, leaving the talent with a measly 8 percent. BMG, Universal, and Warner have announced plans to do away with such deductions for digital downloads."

Re:Wrong model.

[bmarklein]

Actually, despite the hype that iTunes has received, the subscription services have been doing quite well. Total subscribers are close to 700,000 and rising quickly. At an average of $10 per month, that's about $7 million in revenue per month, with much better profit margins that iTunes. Source for the numbers:

• Rhapsody: 250,000 [yahoo.com]
• MusicMatch: 150,000 [com.com] (scroll down - it's in the body of the article)
• MusicNet: 175,000 [216.239.57.104]
• Napster: 80,000 (read this recently, can't find the source at the moment)

I use Rhapsody and, for the way I listen to music, it blows away iTMS. It's $10 per month for unlimited on-demand streaming. Of course I have to be connected to use it, but I'm always online anyway so that's not a problem. For a flat fee, I can explore all kinds of new music & listen to old favorites as well.

Re:I hate Apple posts on slashdot.

[adri]

Actually, you can burn the tracks to CD as audio.
Then you can do what you want.

The 3 different PC restriction is actually for sharing via iTunes sharing.

This offers more than your CD store. It means that I'm finally able to download the 12 tracks I want to put on _my_ CD compilation without having to buy 5 CDs worth of music.

Re:Profit?

[silentbozo]

Add this:

4) Incomplete albums, and albums over $9.99.

I keep running into incomplete albums when browsing Capitol Records artists, such as The Four Freshmen, and Doris Day. Annoys the hell out of me - I'm about to plunk down the $9.99 for an album when I discover that it's incomplete - and it's priced above $9.99.

Yes I'm a cheap bastard. But I'm thinking about getting an iPod anyways (used/refurb of course.) With the money that they earn from me, the original owner can go out and buy that shiny new iPod - a win-win situation. Apple sells a new iPod, and picks up a new customer that may trade up in the future (me). When they finally get a better selection of classic American music, they'll finally sell me some iTunes tracks as well.

iTunes will continue to grow.

[ITR81]

iTunes is currently having 1.5 million tracks downloaded from it's store each week. This # will rise even more right after the holidays due to everyone claiming their iTunes Music Store Gift Certificates. That doesn't even include all the iPods they have sold thus far. Most places like CompUSA are already out of stock of the 20-30GB iPods. So this to me is sign that iTunes Music sales will probably spike right after Christmas. Right now the big rumor about the 4th Gen iPods which are coming in Jan. will not just include the normal bigger storage compacity but a ePod line in the $100-200 range. Apple is already said next yr they will open a Japan, Australia, European, and Canada music store for next yr. I and alot of people think that some these stores will open in Jan. while the rest will open about 3-4 months down the road. This would cause very large influx of downloads per week. Also starting in Feb. Pepsi will be doing it's 100 million iTunes give away which will definitely make Apples overall #'s go up and up. Right now it's been rumored that Pepsi will also be giving away 600 iPods with Pepsi logo iSkins and each will be #'ed. I believe Apple will hit 100 million by Jan. and if the McDonalds promo iTunes deal goes through those #'s will just continue to increase. So no I don't see it slowing down. On a side note it's nice to see Winamp 5 guys went with AAC from Dolby. Which just goes to show the AAC std is catching on.

Re:0 from me thanks to DRM

[dbirchall]

Do you have to (insert label here) every few months to ensure that you can still use your (insert your type of cd here) CDs?

If you've made the mistake of buying a CD from one of the labels that's using "protection" on them now, checking every few months won't help. Whazzat? Won't play in your CD-ROM drive? Pity, that. Oh, and of course the big consumer electronics people are always prattling about what new "improved" version of the CD they're going to come out with, that will have DRM and won't be backward-compatible with your old CD player.

Does your CD have the ability to contact anyone?

No, but if you pop it into a CD-ROM drive, your jukebox probably queries Gracenote's CDDB. Gracenote, you'll remember, built the CDDB using data freely contributed by people all over the Internet (thus the occasional typos!)... and turned it into a commercial product. That doesn't exactly make me want to trust them to not be compiling data on what IP address inserted what CD, et cetera.

Maybe, just maybe, you need to consider different analogies. ;)

Re:Profit?

[gerardrj]

On your points:
1) Apple is actively negotiating for rights and fees in other countries. This is a headache in much of the world. I have no doubth that Apple has the infrastructure in place to roll out any country's service as soon as licensing is ironed out.
2) There are a BUNCH (over100) indie lables that just signed up for iTMS in the past month or two, we should start seeing indi music flood in to the service like a tsunami over the next few months. The indies are tripping over themselves to get on board with this store. on iTMS they are equals with the "big 5" in every respect. (on an interesting side note, I'm wondering if Apple will require all indies to use FairPlay, or will allow non DRM AAC files in the end).
3) DRM is not something I've not heard anyone seriously complain about. The few complaints/gripes I've read are from people who don't understand the rights you get from the store: You are free to use the music on any number of iPods (and what self respecting, RDF susceptible Mac user doesn't use an iPod or four), any number of CDs (which you can give away to friends and family) and in any movies or slide shows you create on DV, DVD, VCD, etc. all of this as long as it's not for commercial use.
Apple's music license specifically allows me to make a copy of songs and give them away; permanantly! This would be considered piracy with a CD or cassette where one archive/backup copy is allowed and there is no secondary distribution/use allowed.

If people think that iTMS has restrictive DRM, I can't imagine how many complaints there must be about other services that charge per CD burn, or limit you to two or three burns of a song or don't allow use of the music in any of your personal movies, or limit you to one or two protable players, etc.

Re:for good or ill

[gerardrj]

He said/meant they make no profit, he didn't say they made no income/revenue. Read his more complete statement ...Jobs has one more reason not to be concerned about the competition. "The dirty little secret of all this is there's no way to make money on these stores," he says. For every 99 Apple gets from your credit card, 65 goes straight to the music label. Another quarter or so gets eaten up by distribution costs... at Time magazine [time.com]

People say there is no cost to digital ditribution, but bandwidth, servers, backup systems, facilities, disaster recovery plans, and personell all cost money.

The 30 or so cents that Apple collects from each sale just about covers those costs. At some point economies of scale will allow Apple to start eeking out a profit from their share.

Re:DRM

[Mark_in_Brazil]

We already have an endless stream of DRM-less music available at your local music store.

Not for long [slashdot.org]. And not because the recording industry hasn't tried [slashdot.org] to [slashdot.org] impose [slashdot.org] DRM [slashdot.org] on [slashdot.org] CDs [slashdot.org] (there have been many other /. stories on such efforts, but I think I've placed enough references here).

--Mark

Re:DRM

[binarytoaster]

The Mac actually works just like Windows in this respect. Replace "DirectShow or DirectSound" with "the QT APIs" and you have the Mac way of doing this.

And amazingly, the QT API calls to play sound files, including .m4p, will allow ANY program to play an m4p file (assuming of course that your computer has rights to play that file)...

And I think there's a plugin for Winamp now to allow it to use the QT API on Windows to play these files.

So request it and quit complaining...

[Cadre]

1. Open iTunes.
2. Click Music Store.
3. On the left hand side look for "Requests and Feedback". Click it.
4. Type in your request and submit it.

Once you've done that, drop a letter to the record company of the artist you want has signed with. Let them know you want them to distribute their music on iTunes. Apple is very good about getting new content, you just have to let them know what you want.

Re:DRM

[BasilBrush]

Not that you even need to go that far to answer the question. If you bought the song on iTunes, and it's on you iPod, then it follows that it's also on your Mac or PC. Replace the iPod and you still have your music ready to sync to it. Break that one and replace it, and you'll still have your music ready to sync to it, repeat ad-infinitum.

Of course if it's your computer that breaks, you'll need that backup mantioned in the parent.

Re:0 from me thanks to DRM

[Anonymous Coward]

Nero has had CD-R emulation in software for a while now. You can "burn" cds on a machine with no hardware burner. Works great.