Originally Posted by slughead
They make $.33/song. They've sold 3 Billion songs. That's 1 Billion dollars (probably $100 million to run the store, so $900M Net).
You are confusing what Apple gets (not 33 cents, but 30 cents) per song, and how much is profit, which is estimated to be 5 cents, or less. The rest is used to pay for running the service, R&D, taxes, etc.
How many TV shows, I wonder? And how much do they make off each?
Apple has sold something over 95 million Tv shows, according to Apple. At $1.99 a show, and less per show for seasons purchases, the extimate is that they make about 10 cents profit per show, or a whopping $9.5 million in profit so far. Wow!
Given the above... no. The record companies wanted variable pricing which is USUALLY beneficial to the consumer.
Since your facts above are wrong, so are your conclusions based on them. Right now, the content companies, or at least one of them are in a war with Apple. We don't know what the end results would be if they won. But, do you assume they want to lower prices, and thus, lower their profits?
They know these songs are offered on other services for less.
They don't know their songs are selling for less on other sites, they negotiated those prices. They weren't standing on the sidelines watching it happen.
This is a very deliberate attempt to break Apple by undercutting their prices, with the intent of taking enough sales from them that they will feel as though they have no choice but to give in to some of the content companies demands.
It might work, and it might not.
But, you have no idea what might happen if it does work.
Luckily, their stubbornness has lead to companies selling mp3s, which is too awesome for words.
Again, this is all to reduce Apple's power over pricing.
Are you really naive enough to believe that if the content companies win this, they will continue to keep prices low?
That would be a joke on consumers like you.
It's not even vaguely possible that Universal is fighting to have lower prices. Do you think that Apple would resist lower pricing?
I think that if Universal said to Apple that they wanted to lower pricing on older music, Apple would have agreed.
No, this is to enable them to set their own pricing, which is unlikely to result, in the long run, in a pricing model that keeps the average price per song the same.
If that were true, then they wouldn't have complained that prices are too low.
'incentivized ' is not a word.
Actually, it is a word. Look it up.
Merriam-Webster's Collegiate Dictionary:
NBC is releasing its shows FOR FREE. Apple could very well have been lying about them wanting to double show prices. In fact, I bet NBC just wanted to raise prices on recent shows and lower prices on older shows. This would mess around with Apple's profit margins and they probably wouldn't make as much on recent shows as older ones.
Apple's not automatically the good guy. The content providers get to decide how their stuff is distributed. UMG and NBC have decided that they could make more money distributing through other channels. Apple decided that their demands would reduce profits by too much.
If Apple allows UMG and NBC to budge their prices, pretty soon the smaller providers will try the same.
It's all about money, and Apple makes PLENTY.
They are releasing all of those shows with ads that can't be bypassed. If you want shows like that, fine. Most people have shown that they don't.
What they are also trying to do is to sell combinations of shows that don't go together, for more money. That's the actual plan they have announced.
As we know now, what Jobs meant when he said that they wanted Apple to sell shows at those high prices, was that this combination of desirable shows paired with undesirable shows, would bring up the price of the show you want to buy, because you will be forced into buying a show that you don't want to buy, thus paying more for that one show.
Universal (or Vivandi) said that they weren't charging more for "a" show, and technically, they are right. They didn't point out that deal they wanted Apple to go with.