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Apple again pushes iTunes subscriptions, attempts to block Spotify

post #1 of 47
Thread Starter 
Apple is said to again be talking with major music labels about offering a subscription music service for a monthly fee, while the company is also reportedly attempting to prevent the launch of streaming service Spotify in the U.S.

According to the New York Post, Apple is again in talks with major record labels about a service that would allow unlimited access to iTunes music for a monthly fee. It was said that iTunes boss Eddy Cue was personally calling labels in recent weeks, trying to push a deal forward.

"One source said the service could have tiered pricing ranging from $10 to $15, although there are issues to be ironed out, including how much music would be included in each tier and how long customers would be able to access that content," author Claire Atkinson wrote.

Unlike in the past, when the labels have outright rejected Apple's offer, it is said that executives in the music industry are "supportive of the idea and believe it could re-energize digital music sales."

Music executives are also looking to the U.S. launch of European streaming music service Spotify, but another report from CNet claims that Apple has said to the record labels it fears the launch of Spotify could reduce album sales.

"In meetings in Los Angeles recently, Apple executives told their music industry counterparts that they had serious doubts about whether Spotify's business model could ever generate significant revenues or profits, according to two sources with knowledge of the discussions," the report said.

Apple's position is said to be that it's tough to sell something that's given away by someone else. Author Greg Sandoval also said that Apple is working on a cloud-based music service that could be tied in to a subscription plan.

Spotify has been pushing hard for a 2010 launch of its service in the U.S., but its ability to arrive stateside depends on deals with record labels. Music sales have been flat in 2010, and executives are concerned that a Spotify launch may only compound the issue.

Rumors of a cloud-based iTunes streaming service have existed for some time, and reports have indicated that Apple has long pushed for one, but lacks the necessary agreements to launch it. Evidence of Apple's future plans came with the company's late-2009 purchase of streaming music service Lala.
post #2 of 47
I don't use Spotify much but I know enough about it to know that it isn't free. If you want unlimited access to Spotify music, you need a pro account which costs £10 per month. ($15)

There is a free option, but the quality is lower, it doesn't work with the Spotify iPhone/Windows Phone app, and you can only listen for a limited period of time per month before it kicks you off. Plus there are ads between songs.
post #3 of 47
Quote:
Originally Posted by AppleInsider View Post

the company is also reportedly attempting to prevent the launch of streaming service Spotify in the U.S.

What if they outcompete them instead? Did Apple learn nothing from its recent brushes with the law?

Apple needs to launch a BETTER service, not prevent a good service from entering into competition.
post #4 of 47
Spotify got cøCk blocked by Apple..
post #5 of 47
Quote:
Originally Posted by appl View Post


Apple needs to launch a BETTER service, not prevent a good service from entering into competition.

Problem is, it's not a level playing field. Spotify can get deals from the labels that Apple struggles with. Which I don't think is too fair.
post #6 of 47
Quote:
Originally Posted by appl View Post

What if they outcompete them instead? Did Apple learn nothing from its recent brushes with the law?

Apple needs to launch a BETTER service, not prevent a good service from entering into competition.

i agree. resorting to MS tactics just shows how scared they are.
post #7 of 47
The music industry is so dense. The reason digital music sales need rejuvenating is the $1.29 per song pricing. Take it back to 99¢ and sales will recover. I want to own my music, not rent it.
post #8 of 47
Quote:
Originally Posted by iPlaid View Post

The music industry is so dense. The reason digital music sales need rejuvenating is the $1.29 per song pricing. Take it back to 99¢ and sales will recover. I want to own my music, not rent it.

Exactly. No one who truly appreciates music would ever go for a subscription service.

It's just for the folks who want some kind of noise laying in the background to soothe their paranoia/nerves like having the radio on so you don't fell lonely. Sadly however, this is a very large number of people.

What I don't get is that Apple always used to be about simple offerings and not giving people too many stupid choices. They still do this with their products in that one can't customise ... well anything at all, yet when it comes to the media offerings now it's all tiered pricing, variable rentals and sliding prices based on artificial availability constraints etc.

They are just caving on all fronts to the f*cking media idiots.
post #9 of 47
Quote:
Originally Posted by Prof. Peabody View Post

Exactly. No one who truly appreciates music would ever go for a subscription service.

It's just for the folks who want some kind of noise laying in the background to soothe their paranoia/nerves like having the radio on so you don't fell lonely. Sadly however, this is a very large number of people.

What I don't get is that Apple always used to be about simple offerings and not giving people too many stupid choices. They still do this with their products in that one can't customise ... well anything at all, yet when it comes to the media offerings now it's all tiered pricing, variable rentals and sliding prices based on artificial availability constraints etc.

They are just caving on all fronts to the f*cking media idiots.

I don't get what you are talking about... Generally, most people want subscriptions to content. They don't want to buy everything they consume....

I subscribe to Netflix to rent the movies I just want to see once, I buy DVDs of movies I want to own...

Why should music be any different?
post #10 of 47
Quote:
Originally Posted by Dave K. View Post

I don't get what you are talking about... Generally, most people want subscriptions to content. They don't want to buy everything they consume....

I subscribe to Netflix to rent the movies I just want to see once, I buy DVDs of movies I want to own...

Why should music be any different?

Exactly. Subscription for music is what I want. The music I want to listen to changes almost every other day, so being able to pick from anything I want is perfect.

This is also one place where the Zune Pass is awesome. For the $15 a month, you get to also keep 10 tracks a month as mp3s...so it pretty much pays for itself.
post #11 of 47
Quote:
Originally Posted by iPlaid View Post

The music industry is so dense. The reason digital music sales need rejuvenating is the $1.29 per song pricing. Take it back to 99¢ and sales will recover. I want to own my music, not rent it.

True, they still try to sell lossy files at lossless prices.
post #12 of 47
Kinda funny how Apple is looking out for the Music and TV guys. They are always looking for a
way to have people actually pay for stuff.

Things kinda settled down when iTunes started offering music at a low price, (supposedly most
people are honest).

Now, with the new AppleTV, same thing all over again. Apple is trying to give them a model that will actually PAY them for their content. But all the Networks are very suspicious. They will proba-
bly work hand in hand with Google and the other guys before Apple gets a decent offer. Don't know how legally they can offer that exclusively to only the competition, but.
post #13 of 47
Quote:
Originally Posted by Prof. Peabody View Post

No one who truly appreciates music would ever go for a subscription service.

I suspect Apple's market studies say otherwise, or they wouldn't be pursuing it.

A subscription would be a win-win with consumers like me. I average $5-$7 a month on music tracks, but I would spend $10-$12 on a subscription service to get access to a much bigger selection of music. It would be great for sampling full albums or new artists that I wouldn't otherwise check out and classical/jazz albums that I would like to have access to but wouldn't necessarily listen to very often.

I get a better consumer experience for a small additional cost, and Apple/music labels make $60 a year in additional revenue. If you still can still purchase tracks for $.99-$1.29 -- and I don't see Apple requiring you to opt into a subscription plan -- there's no downside.
post #14 of 47
Quote:
Originally Posted by Dave K. View Post

I don't get what you are talking about... Generally, most people want subscriptions to content. They don't want to buy everything they consume ....

Quote:
Originally Posted by Porchland View Post

I suspect Apple's market studies say otherwise, or they wouldn't be pursuing it ...

You both misunderstand what I wrote.

I said "anyone who really appreciates music," by which I mean people who care about it a lot or are audiophiles etc. I also said that the majority would probably want the streaming thingie.

The average person is okay with AM radio. That doesn't mean they are really into music, it means they like to have music (or something) playing in the background of their lives sometimes.

In the same way that anyone really into cinema has a movie collection and worries about quality and owning the best copy etc., someone who is really into music has a music collection, owns a lot of music and has the same general concerns.

I don't think this is a majority of folks at all, but the people in this group includes myself so I was commiserating with the previous poster (who also seems to be in this group), about how it seems crazy (to people like me or them), that anyone would want the bulk streaming of content, (sometimes with commercial interruptions), that Spotify offers or the bulk licensing of content that iTunes is presumably going to offer.
post #15 of 47
Quote:
Originally Posted by appl View Post

What if they outcompete them instead? Did Apple learn nothing from its recent brushes with the law?

Apple needs to launch a BETTER service, not prevent a good service from entering into competition.

The labels wouldn't allow Apple to sell music on the same terms as Spotify even if they wanted to.
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post #16 of 47
I have both Spotify and Napster accounts and stream through my Sonos, (thanks to recent Spotify integration) and both work very well. I use my iPhone/iPad via Sonos controller app and it's pretty good, although i, like many Sonos users, would love to see AirPlay support. Although i don't mind using someone elses software, i really want to see seamless integration through the iOS.

Spotify is more expensive than Napster but you do get a desktop client which is useful. I hope you get it over in the US as it's just another great feature to use with your iPhone/iPad for those who have Sonos.

What's the market share for Sonos in the US? I imagine it's more popular than here in the UK. Maybe the recent Spotify integration with Sonos has something to do with it. If Spotify gets the go ahead in the US then there's going to be a lot of happy iPhone/iPad users with Sonos players.

Maybe Apple are close to something themselves. Some hardware/software integration with big companies like Sonos?
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post #17 of 47
Verizon is the shadow company behind Spotify to destroy Apple and make a Verizon iPhone.
post #18 of 47
Quote:
Originally Posted by Prof. Peabody View Post

You both misunderstand what I wrote.

I said "anyone who really appreciates music," by which I mean people who care about it a lot or are audiophiles etc. I also said that the majority would probably want the streaming thingie.

The average person is okay with AM radio. That doesn't mean they are really into music, it means they like to have music (or something) playing in the background of their lives sometimes.

In the same way that anyone really into cinema has a movie collection and worries about quality and owning the best copy etc., someone who is really into music has a music collection, owns a lot of music and has the same general concerns.

I don't think this is a majority of folks at all, but the people in this group includes myself so I was commiserating with the previous poster (who also seems to be in this group), about how it seems crazy (to people like me or them), that anyone would want the bulk streaming of content, (sometimes with commercial interruptions), that Spotify offers or the bulk licensing of content that iTunes is presumably going to offer.

I agree with you, and I'm under the impression Apple has a way to convince the average person that they need this service, while at the same time convincing the music labels they will make gobs of cash by letting Apple control how it is marketed (including the price.)

In my mind, it is the same hangups that plague SIRI/XM, that people already have a way to listen to radio, why pay for it? Especially given that there are still commercials. However, Apple has the brainpower to market it properly and crush the skeptical arguments. Now they just have to convince the labels they will make money, and more money than trying to stick to the CD/brick-and-mortar model.
post #19 of 47
Quote:
Originally Posted by Mr Underhill View Post

Some hardware/software integration with big companies like Sonos?

I believe the term you are looking for is AirPlay.
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post #20 of 47
Quote:
Originally Posted by monstrosity View Post

Problem is, it's not a level playing field. Spotify can get deals from the labels that Apple struggles with. Which I don't think is too fair.

Maybe, maybe not. This is a rumor on a rumor. There are several parties here, and it's hard to gauge the truth, if there is any.
post #21 of 47
Quote:
Originally Posted by Dave K. View Post

I don't get what you are talking about... Generally, most people want subscriptions to content. They don't want to buy everything they consume....

I subscribe to Netflix to rent the movies I just want to see once, I buy DVDs of movies I want to own...

Why should music be any different?

Subscription we already have , it is called radio. I pay by listening to ads.
post #22 of 47
Quote:
Originally Posted by cmf2 View Post

I believe the term you are looking for is AirPlay.

Yes. I made it a bit obvious didn't i
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post #23 of 47
Quote:
Originally Posted by Dorotea View Post

Subscription we already have , it is called radio. I pay by listening to ads.

The problem I see is that radio offers little to no input over the playlist, and most stations have a very limited playlist.

Radio ads are punishment to me, I don't understand why people put up with the style of ads generally used in radio, especially for prerecorded content. Sports and live content, OK, I get that, to an extent, but the ads are still needlessly irritating.
post #24 of 47
There are a few problems with this story.

First, the source: The New York Post is not where Apple leaks to the press.

Second, this story is backwards -- its the labels who have been pushing Apple to develop a subscription based model for music, not the other way around. The labels tried Rhapsody, Napster and a dozen other ways to monetize music in a subscription model, and it just doesn't work. I recall one label executive telling me that the only way music subscription would ever work is if Apple decided it was cool and did it -- and guess what? Apple doesn't want to do it.

Steve Jobs is on record saying many, many, many times over -- "People want to own their music"

I see nothing that's changed that.

However, Apple is slamming into a brick wall with the studios, some of which are connected to the record labels, over movies and televisions shows. The studios are terrified the same thing will happen to movies and television that happened to music -- even though it already has. Anyone with a BitTorrent client can tell you that. These aren't the brightest bulbs on the Christmas tree we're dealing with.

The studios could be trying to squeeze Apple into cooperating, but I think Apple has enough drag to play hardball. We'll have to see.

My gut instinct tells me that this story is BS.
post #25 of 47
Um, a subscription service would NOT "re-energize digital music sales", as most people would just listen to the music as part of their subscription, simply because most music today is not stuff you want to hear years from now.

What this would do, would be to hike profits at the major labels, because the labels would be able to pay their artists even LESS than they do now, as a purchase should result in a 'payment' of 5-10 cents to the artist (possibly a little more if they are also the songwriter), but a play as part of a subscription would be a payment that is only a small fraction of a cent.

The labels WILL wind up keeping a higher percentage of all revenues than they do under the current system of sales. Also, most people don't spend $10 on music every month now, so it:

-increases profits for the labels
-makes their revenue stream larger and more predictable/regular
-people get even less than they currently do
post #26 of 47
Quote:
Originally Posted by Maxbee View Post

its the labels who have been pushing Apple to develop a subscription based model for music, not the other way around.

I think some of us want it too. Welcome to the forum.
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post #27 of 47
Quote:
Originally Posted by Prof. Peabody View Post

You both misunderstand what I wrote.

I said "anyone who really appreciates music," by which I mean people who care about it a lot or are audiophiles etc. I also said that the majority would probably want the streaming thingie.

The average person is okay with AM radio. That doesn't mean they are really into music, it means they like to have music (or something) playing in the background of their lives sometimes.

In the same way that anyone really into cinema has a movie collection and worries about quality and owning the best copy etc., someone who is really into music has a music collection, owns a lot of music and has the same general concerns.

I don't think this is a majority of folks at all, but the people in this group includes myself so I was commiserating with the previous poster (who also seems to be in this group), about how it seems crazy (to people like me or them), that anyone would want the bulk streaming of content, (sometimes with commercial interruptions), that Spotify offers or the bulk licensing of content that iTunes is presumably going to offer.

Audiophiles and music collectors are not the target audience. SACD and DVD-Audio failed. The majority is people who have music in the background listening, to something they hopefully like. Services like Pandora are successful because people can listen to music they like. And it's cheap at $3.00/month for ad-free service or FREE for ad-included service. Apple sees that and wants a streaming service that will then hook the customer into iTunes for those people "compelled" to buy music. And everyone who pays $15/month for music is nuts. Haven't you heard of vTuner internet radio service. It's free, no subscription required and streams music from all over the world.
post #28 of 47
Apple closed the LaLa site in May 2010.
Does anyone know how their server farm in North Carolina has come along?
I think Jobs knows that having streaming music between all of your devices will make Mac the platform that a lot of people would like to be using (like myself).
Just my take.
post #29 of 47
Quote:
Originally Posted by FredAppleHead View Post

Audiophiles and music collectors are not the target audience. SACD and DVD-Audio failed.

That's a good point, those formats seemed like BS. My impression is that the biggest reason those formats sounded better is because the sound didn't have aggressively applied dynamic range compression, and we can get better from CD if customers only demanded it. While the fanss of SACD/DVDA were talking about how it sounded so much better because of the sample rates and the detractors were talking about how the sample rates are overkill, both sides missed the possibility of differences in DRC accounting for the differences in sound quality, in other words, a lot of posturing that focused on the wrong things.
post #30 of 47
Quote:
Originally Posted by JeffDM View Post

That's a good point, those formats seemed like BS. My impression is that the biggest reason those formats sounded better is because the sound didn't have aggressively applied dynamic range compression, and we can get better from CD if customers only demanded it. While the fanss of SACD/DVDA were talking about how it sounded so much better because of the sample rates and the detractors were talking about how the sample rates are overkill, both sides missed the possibility of differences in DRC accounting for the differences in sound quality, in other words, a lot of posturing that focused on the wrong things.

I agree. CD done right can sound really good. I guess what sent me off on my tirade was the comment that people that listen on AM aren't really into music. Just the opposite I think. If you love music, music, whether it's 128kbps compressed MP3/AAC, 24/192 FLAC or other lossless format, on vinyl, CD, cassette or via satellite; is going to move you. I would love to have heard Dorsey and his big band on AM over a simple tube AM radio back in the day. What is killing music are pre-programmed radio stations loaded with commercials and the same music over and over. Listener's, while stuck to their preferences, would like to discover new music and streaming music services fill this need.
post #31 of 47
Okay, first the record and media companies need to admit who their competition is:
Lime-wire, Bit-Torrent, etc.

Then they need to work on giving people what they want (within reason) and let profits follow:

Music: <$1 DRMfree single price songs (only way to compete with pirating... and it WORKS! Apple has it right, people (in general) want to own their music if it's cheap enough.)

Video Content: <~$1 per hour content rental, or <$15/mth. People don't mind renting/subscribing to video content as they only view movies/shows once or twice. The per content hour means. 30 minutes TV shows rent for $0.49, 1 hour shows $0.99, movies $1.99.

It's pretty simple. They need to realize they have the ability to distribute to a huge volume cheaply. If they price the product correctly they can achieve impulse purchases with little thought or concern. At this tipping point their volumes sky-rocket.

Example: iTunes @ $0.99

They need to keep as much pricing below $1 as possible. Movie rentals are understandable at $1.99.

Of course Netflix has shown subscription works for video, so that is a no brainer as well at the right price.
post #32 of 47
Quote:
Originally Posted by emulator View Post

True, they still try to sell lossy files at lossless prices.

Then convert your lossy files to lossless.



(See what I did there?)
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post #33 of 47
Quote:
Originally Posted by appl View Post

What if they outcompete them instead? Did Apple learn nothing from its recent brushes with the law?

Apple needs to launch a BETTER service, not prevent a good service from entering into competition.

Quote:
Originally Posted by screamingfist View Post

i agree. resorting to MS tactics just shows how scared they are.

What are you guys talking about? Read the article. Despite the click-bait headline, what's being described is Apple making the business case for their way over the other guy's, just as you would expect them to do.

Sharing with the labels their opinions about the relative merits of Spotify vs. iTunes isn't going to lead to any "brushes with the law", aren't "MS tactics", doesn't "prevent" anyone from entering the market and doesn't make them "scared." It just means they go in and say "We think Spotify is a bad economic choice for you and what we can offer is better." And why wouldn't they say that? You think everyone else is all "Yeah, whatever, use what you want, no skin off our back"?

If someone has some evidence that Apple backed that up with veiled or explicit threats to refuse to sell any vendor's content who refused to cooperate (and what other leverage does Apple have?) then you have something to wax indigent about.
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post #34 of 47
Quote:
Originally Posted by Dave K. View Post

I don't get what you are talking about... Generally, most people want subscriptions to content. They don't want to buy everything they consume....

Because "content" is an undifferentiated mass with no distinctions among media? You don't have any music in you iTunes folder more than a year or two old?

Quote:
I subscribe to Netflix to rent the movies I just want to see once, I buy DVDs of movies I want to own...

Why should music be any different?

How many people watch a movie or television show more than once? How many people listen to a song more than once?

Different.
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post #35 of 47
Ping is the new thing that Apple can offer to the music industry in order to get more artists in front of consumers. That is something new to consider. Apple didn't create Ping or Genius Mixes because they love music. They did it to expose people to more things for them to buy in the iTunes store.

Apple is a business that needs us to purchase more and more stuff for it to continue to exist.

If programmers would write programs that could work properly forever on any future hardware and computer manufacturers would make computers that would last, then profits for Apple would drop over time. As it is, new features on new computers allow bigger programs with more features, which eventually means older programs won't work on new hardware.

Eventually all of the lossless music we're buying won't work on future hardware due to different formats that will be created. Then we'll need to repurchase our music or buy conversion hardware and software.

We might as well subscribe to Zune for streaming content. If they would up the quality of their free downloads each month Zune would be a great streaming source. I don't see what Apple has to offer over Zune. I'm not one to use Ping and I didn't ever use Genius mixes.

Apple isn't being innovative by creating a streaming cloud based music delivery service. They just have more iTunes users than the other services out there. That gives them a little bit of an advantage.

Since I want to get an open source player that works with Linux I'm going with the SanDisc Sansa Fuse. It plays music in the FLAC format.
post #36 of 47
Wait, what? The music industry is in trouble? What? How? Didn't Apple, the iPod and iTunes single-handedly save them? Wasn't Apple making them tons of cash? Oh my bad, Apple was making tons if cash for themselves. SJ's master plan didn't work out so well I see, that's why songs are now $1.29. Labels are offsetting Apple's cut, and you wonder why print and TV are reluctant to do things the "Apple" way. SJ is only a prophet when there's a profit in it for him. Now there's a competitor trying to do things a little different and Apple execs go running making sure only their hands are allowed into the music industry. I love Apple products but these are bully tactics.
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post #37 of 47
Spotify is a great service and I've been a member for around a year now.

I love how there's a client for everything... Mac, Windows, iOS, Android, Symbian and even Windows Mobile. No matter where I access Spotify, it syncs down my playlists. I can even share playlists with friends or create a shared playlist. Like iTunes, everything has it's own URL too, so I can quickly share individual songs and albums with people. It's a great way to discover new music.

It's a shame that it won't be coming out in the US any time soon.
post #38 of 47
too bad there isn't any good music or talent out there. this is the real reason why there are no sales.
post #39 of 47
Quote:
Originally Posted by Mr Underhill View Post

I think some of us want it too. Welcome to the forum.

Thanks for the welcome.

Well, perhaps some do want it -- however, I think if that many people really wanted a music subscription service, things like Rhapsody would have done much better than it has. All subscription models for music, so far, have failed abysmally as a business model.

I did a number of panel debates on this topic back when Universal was trying to squeeze Apple a few years ago about this very subject, and its an interesting topic for sure.

The label guys all use the phrase "it's about the access" -- but to the consumer, it's simply another rental model. The moment you stop paying the subscription fee, you lose all of your music. There's no value for the customer. Content is accessible and fairly cheap, and quite honestly, people are generally willing to pay for content, and music is an easy one, it sells itself.

Consider this: At 15 dollars a month it will cost you 180 dollars a year to get that access with truly nothing in return. People have a much deeper psychological connection to music. It isn't like film or television or even print content. With that same 180 dollars you can purchase your content and enjoy it over and over again throughout your lifetime. As in right now -- I'm listening to The Pretenders first album, released in 1979. I will listen to this hundreds of more times before I die. Spending 10 dollars to own that content is an easy decision.

Now, does that mean that Apple isn't going to do a subscription model? They very well may. No one really has any idea what they're building in North Carolina, and a subscription model is something the labels absolutely have been pushing Apple to do for several years now. They know that the only way subscription works is if Apple is behind it.

What Apple wants is to be the ubiquitous destination for all of your content, all consumed on their devices -- music, film, television, books, communication, web, games, you name it. If that means that they have to do this in order to facilitate their long term goals, we might just see it happen.

But the pressure point on this isn't coming from Apple, it's the record labels. The Post story is absolutely wrong in that detail.
post #40 of 47
Quote:
Originally Posted by dasanman69 View Post

Wait, what? The music industry is in trouble? What? How? Didn't Apple, the iPod and iTunes single-handedly save them? Wasn't Apple making them tons of cash? Oh my bad, Apple was making tons if cash for themselves. SJ's master plan didn't work out so well I see, that's why songs are now $1.29. Labels are offsetting Apple's cut, and you wonder why print and TV are reluctant to do things the "Apple" way. SJ is only a prophet when there's a profit in it for him. Now there's a competitor trying to do things a little different and Apple execs go running making sure only their hands are allowed into the music industry. I love Apple products but these are bully tactics.

Any reseller must make a margin in order to justify selling the product. Not only was iTunes store not really a big profit center, Apple's cut was hardly a big deal except to the labels, who were trying to squeeze down the margins on resellers and their artists and keep most of the money for themselves. Even the highest estimates for per-track net profit (revenue minus expenses) doesn't go as high as a dime a track. Others seem to estimate it to be around a nickel per track.
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