"It's not a way to make a lot of money," acknowledges Jobs. No, it's a way to help sell iPods. Apple says sales of the music-storing, high-profit-margin palm-size gadgets almost quadrupled between the quarters before and after iTunes' launch. Apple's approach borrows from a proven business tactic. "Westinghouse created radio shows to sell radios," notes Lee Black, an analyst with Jupiter Research. AOL Music takes a cut from songs sold through MusicNet, but its ka-ching comes from the 16 million visitors it delivers each month to advertisers like Coca-Cola.
So just music delivery is not the economic driving force for now. The music industry is taking too big a cut.
So for any new company to enter the iTMS business, it will need to sell ads like crazy (unlike Apple) or it will have to be a record company itself or it will have to be after "presence" more than the income from the downloads themselves, in other words, Microsoft.
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http://www.time.com/time/magazine/ar...485739,00.html
To me the most telling part is....
"It's not a way to make a lot of money," acknowledges Jobs. No, it's a way to help sell iPods. Apple says sales of the music-storing, high-profit-margin palm-size gadgets almost quadrupled between the quarters before and after iTunes' launch. Apple's approach borrows from a proven business tactic. "Westinghouse created radio shows to sell radios," notes Lee Black, an analyst with Jupiter Research. AOL Music takes a cut from songs sold through MusicNet, but its ka-ching comes from the 16 million visitors it delivers each month to advertisers like Coca-Cola.
So just music delivery is not the economic driving force for now. The music industry is taking too big a cut.
So for any new company to enter the iTMS business, it will need to sell ads like crazy (unlike Apple) or it will have to be a record company itself or it will have to be after "presence" more than the income from the downloads themselves, in other words, Microsoft.