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Apple Pro Underwear · Jan 24, 2005, 10:44 AM

http://www.macworld.com/news/2005/01...unes/index.php

1.25 million songs per day

on 15 cents profit equals 187,500 bucks per day

68,437,500 per year Net

not including iPod sales, iPod accesories, publicity for Apple and etc.

So many questioned how iTunes is profitable for Apple but I think they are making something at this point... subtract operational, lawyer fees, advertising, R&D, focus groups and etc and they should be making some dough...

Anybody see holes in my math?

BRussell · Jan 24, 2005, 10:56 AM

Originally posted by Apple Pro Underwear:
Anybody see holes in my math?

Not the math, but the "15 cents" profit per song. Apple has said over and over in their reports, including the one last week, that they do a little better than break even on the iTMS.

mitchell_pgh · Jan 24, 2005, 11:18 AM

You mean 15� gross don't you? Net means profit... They still need to advertise, house servers, pay developers, pay audio encoders, negotiate deals, etc. etc.

Doesn't sound very lucrative to me.

http://www.theregister.co.uk/2003/11...ur_99c_belong/

Apple Pro Underwear · Jan 24, 2005, 01:15 PM

Originally posted by mitchell_pgh:
You mean 15� gross don't you? Net means profit... They still need to advertise, house servers, pay developers, pay audio encoders, negotiate deals, etc. etc.

Doesn't sound very lucrative to me.

http://www.theregister.co.uk/2003/11...ur_99c_belong/

that article was Nov 2003

they were itching to sell 1 million in six months originally and now they are doing more than that in 1 day

the model has changed from a year or two ago...

and yes, i meant gross

Mafia · Jan 24, 2005, 01:20 PM

Originally posted by BRussell:
Not the math, but the "15 cents" profit per song. Apple has said over and over in their reports, including the one last week, that they do a little better than break even on the iTMS.

15 cents profit per song may be incorrect(i have no information whether it is or isn't) but i still believe they make a decent profit off of it.

chris v · Jan 24, 2005, 01:24 PM

Even if they clear 3 cents a song, they're still making money. The main point is that with ITMS, iPod, iMac and OS X integration, they make the whole bundle an attractive prospect to hardware customers, and they sell more iPods and iMacs as a result of having the ITMS. If they don't actually LOSE money on it, it's a wash, since it drives sales in other areas.

1.25 mil a day is pretty nice. Hase Real sold that many YET?

Mafia · Jan 24, 2005, 01:26 PM

Originally posted by chris v:
Even if they clear 3 cents a song, they're still making money. The main point is that with ITMS, iPod, iMac and OS X integration, they make the whole bundle an attractive prospect to hardware customers, and they sell more iPods and iMacs as a result of having the ITMS. If they don't actually LOSE money on it, it's a wash, since it drives sales in other areas.

1.25 mil a day is pretty nice. Hase Real sold that many YET?

i think real is trying to break 125 a day.

BRussell · Jan 24, 2005, 01:46 PM

The other companies are focusing on subscriptions, which probably is more profitable. If you can get a lot of people on a monthly payment, you've got it made. I wonder how many people really want that though.

Mafia · Jan 24, 2005, 01:52 PM

Originally posted by BRussell:
The other companies are focusing on subscriptions, which probably is more profitable. If you can get a lot of people on a monthly payment, you've got it made. I wonder how many people really want that though.

the numbers say, not too many. yet.

Millennium · Jan 24, 2005, 02:39 PM

The funny thing is, Apple never expected the iTMS to make a profit. It was set up as a loss leader to get people to buy iPods. However, as it so happened, it has actually made them a small profit, which is just gravy.

euchomai · Jan 25, 2005, 01:07 AM

iTunes as a music player is working fine for me, I just hate that I am stuck to an iPod for my iTunes downloads. I'd like to play AAC on another mp3 player, maybe a cool little Sandisc or something. I'm stuck though, I'll end up buying another iPod, but I'd like to choose from a few more companies.

rozwado1 · Jan 25, 2005, 05:35 PM

Originally posted by euchomai:
iTunes as a music player is working fine for me, I just hate that I am stuck to an iPod for my iTunes downloads. I'd like to play AAC on another mp3 player, maybe a cool little Sandisc or something. I'm stuck though, I'll end up buying another iPod, but I'd like to choose from a few more companies.

Just sue Apple like that other jackass.

Superchicken · Jan 25, 2005, 06:38 PM

Originally posted by euchomai:
iTunes as a music player is working fine for me, I just hate that I am stuck to an iPod for my iTunes downloads. I'd like to play AAC on another mp3 player, maybe a cool little Sandisc or something. I'm stuck though, I'll end up buying another iPod, but I'd like to choose from a few more companies.

Why? Have you ever tried any of those? I can understand wanting something flash based, in which case the shuffle should fit your itch. I don't see why you wouldn't want to use an iPod.

Apple Pro Underwear · Jan 25, 2005, 06:50 PM

Originally posted by Superchicken:
Why? Have you ever tried any of those? I can understand wanting something flash based, in which case the shuffle should fit your itch. I don't see why you wouldn't want to use an iPod.

iPod has no radio and some other features built in

if you like having the swiss army knife, then apple is not for you sometimes

Jan 25, 2005, 07:04 PM

Originally posted by euchomai:
iTunes as a music player is working fine for me, I just hate that I am stuck to an iPod for my iTunes downloads. I'd like to play AAC on another mp3 player, maybe a cool little Sandisc or something. I'm stuck though, I'll end up buying another iPod, but I'd like to choose from a few more companies.

I thought there was another flash player that played AAC. Not iTMS AAC, but non-DRMed AAC. Can't remember which one though.

euchomai · Jan 25, 2005, 09:40 PM

Originally posted by Superchicken:
Why? Have you ever tried any of those? I can understand wanting something flash based, in which case the shuffle should fit your itch. I don't see why you wouldn't want to use an iPod.

Well, I want a player that has an FM radio and possibly voice recording in the form factor of a shuffle. I also want it to have a screen, I've tried to not want a screen, but my brain can't let a screenless iPod enter into my possession.

Mafia · Jan 25, 2005, 09:55 PM

Originally posted by euchomai:
Well, I want a player that has an FM radio and possibly voice recording in the form factor of a shuffle. I also want it to have a screen, I've tried to not want a screen, but my brain can't let a screenless iPod enter into my possession.

agreed about the voice recording and screen. i have no need for an fm tuner but it'd be nice.

Luca Rescigno · Jan 25, 2005, 09:57 PM

Also the iPod is really freakin' expensive. Even the shuffle is a lot of money for some people. A couple days ago I bought an MP3 CD player at Target for $20. Pretty damn good deal considering a CD can hold almost 700 MB, and I can fit about a dozen in a small CD wallet. Yeah, it's not as portable, but it's still fine, and there's absolutely no beating the price.

Unfortunately, my purchased iTunes music won't work with it. I have to burn my purchased music to audio CDs and re-import them in MP3 format to get them to work. Had I decided to download them illegally instead, it would be much more convenient.

I don't blame Apple for this. It's not like they can use encrypted MP3s; a device as simple as an MP3 CD player might not be able to decrypt them anyway, even if it were possible to create encrypted MP3s. I just wish AAC would catch on among portable audio devices and become mainstream. And it wouldn't hurt if Apple loosened its DRM to allow you to convert songs to MP3, though I suppose that's the greedy record companies' fault.

Anyway, I'm just saying that while Apple is totally justified in selling all their music in AAC format, and while they can't do anything about the DRM restrictions, I'm still disappointed that I have to go to such lengths to listen to music that I purchased legally. There are plenty of people who have non-iPod MP3 players. Most hard drive players are iPods, of course, and they're one of the best hard drive MP3 players. I mean, if I were going to spend $200+ on an MP3 player, I'd definitely get an iPod. But there are lots of other MP3 players out there.

Mafia · Jan 25, 2005, 10:00 PM

Originally posted by Luca Rescigno:
Also the iPod is really freakin' expensive. Even the shuffle is a lot of money for some people. A couple days ago I bought an MP3 CD player at Target for $20. Pretty damn good deal considering a CD can hold almost 700 MB, and I can fit about a dozen in a small CD wallet. Yeah, it's not as portable, but it's still fine, and there's absolutely no beating the price.

Unfortunately, my purchased iTunes music won't work with it. I have to burn my purchased music to audio CDs and re-import them in MP3 format to get them to work. Had I decided to download them illegally instead, it would be much more convenient.

I don't blame Apple for this. It's not like they can use encrypted MP3s; a device as simple as an MP3 CD player might not be able to decrypt them anyway, even if it were possible to create encrypted MP3s. I just wish AAC would catch on among portable audio devices and become mainstream. And it wouldn't hurt if Apple loosened its DRM to allow you to convert songs to MP3, though I suppose that's the greedy record companies' fault.

Anyway, I'm just saying that while Apple is totally justified in selling all their music in AAC format, and while they can't do anything about the DRM restrictions, I'm still disappointed that I have to go to such lengths to listen to music that I purchased legally. There are plenty of people who have non-iPod MP3 players. Most hard drive players are iPods, of course, and they're one of the best hard drive MP3 players. I mean, if I were going to spend $200+ on an MP3 player, I'd definitely get an iPod. But there are lots of other MP3 players out there.

ya that sucks, i wish that aac -> mp3 program was still around.

macaddict0001 · Jan 26, 2005, 12:25 AM

why can't you put them on other players.
whoops been answered. turns out you can.

mitchell_pgh · Jan 26, 2005, 12:35 AM

I like owning my music. Sure a subscription is cool because you get access to all the music, but at the end of the day, you have a hold in your bank account and nothing to show for it.

SeSawaya · Jan 26, 2005, 01:13 AM

I make 65� on every song I sell on iTunes

CD baby gets like 10� and Apple gets the rest.

I know they make money through deals with the record companies.

Apple Pro Underwear · Jan 26, 2005, 08:03 AM

Originally posted by SeSawaya:
I make 65� on every song I sell on iTunes

CD baby gets like 10� and Apple gets the rest.

I know they make money through deals with the record companies.

I think no matter how much they are making, i am sure it varies... iTMS is not a loss leader anymore like the way it formerly was.

They must be breaking even at the very very least and making a sizeable profit at the most.

and i am taking this moment to salute buy.com's version of a music store (i resure to even type the url in here). they came out with a big fuss and stupid parady commercials but where they at now? not even mentioned with the "big guns". HAHAHA suckers.

Superchicken · Jan 26, 2005, 03:47 PM

Dang I forgot all about Buy Music... hehe... remember when MacNN had a link to it hehee

Mr Heliums · Jan 26, 2005, 03:55 PM

Originally posted by Millennium:
The funny thing is, Apple never expected the iTMS to make a profit. It was set up as a loss leader to get people to buy iPods. However, as it so happened, it has actually made them a small profit, which is just gravy.

If that were true, the iPod would have surely accepted .WMA files. The only incentive to keep iPods on AAC is to make sure people use the iTunes music store.

Mr Heliums · Jan 26, 2005, 03:56 PM

Originally posted by SeSawaya:

I know they make money through deals with the record companies.

How so?

BRussell · Jan 26, 2005, 04:58 PM

Originally posted by Mr Heliums:
If that were true, the iPod would have surely accepted .WMA files. The only incentive to keep iPods on AAC is to make sure people use the iTunes music store.

I don't think Apple would have that much of a problem with iPods using WMA DRM. I just don't think they feel it's necessary. What Apple doesn't want is other people's music players being able to use iTMS DRM. Then people might not buy as many iPods.

(You can convert WMA to be useable on iPods with the Windows iTunes, BTW, just not DRM WMA. IMO.)

Mafia · Jan 26, 2005, 05:22 PM

Originally posted by Mr Heliums:
How so?

i don't know but i'm assuming record companies want their songs on iTMS since it sells the most out of any online music store.

Apple Pro Underwear · Jan 26, 2005, 06:28 PM

Originally posted by Mr Heliums:
How so?

Maybe the Label pays for banners on the iTMS

10,000 grand for top level appearance

Jan 26, 2005, 09:03 PM

Originally posted by Luca Rescigno:

Unfortunately, my purchased iTunes music won't work with it. I have to burn my purchased music to audio CDs and re-import them in MP3 format to get them to work. Had I decided to download them illegally instead, it would be much more convenient.

Wait. Your MP3 CD player won't play regular audio CDs?

dampeoples · Jan 26, 2005, 09:14 PM

Originally posted by hayesk:
Wait. Your MP3 CD player won't play regular audio CDs?

And that's all the fault of Apple

PurpleGiant · Jan 26, 2005, 09:15 PM

Originally posted by Apple Pro Underwear:
Maybe the Label pays for banners on the iTMS

10,000 grand for top level appearance

Unless this has changed since iTMS first came out, Apple did state that all banners and ads are not endorsed or paid for, it is just the choice of the iTMS editors.