iCloud record label deals may cost Apple $150 million

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Comments

  • Reply 21 of 40
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by digitalclips View Post


    My thoughts exactly

    But Soli proved us wrong!



    Nah, Groovy123 provided a factual basis. My figures are from the label's PoV.





    Quote:
    Originally Posted by shen View Post


    Clearly Apple thinks this is important, but I still don't get it. Apple often releases products that don't fit me or my life, but I still see how they are useful to others. This I just don't get. And people here have talked about it as a great idea in the past, so I am hoping someone can help me out...



    If they start charging the rumored cash for this, even if it is a small amount, what exactly am I getting for it? The ability to stream my own music to myself? I already have my music. Where and when will I use this? In the car where I don't have an Internet connection to stream it? Oh wait I have my phone to stream it! My iPhone! Which already has my music on it....



    Is this service aimed only at people with more music than they have space on their iPods? How many people will this really be a good deal for?



    Generally, the more I think about Apples upcoming stuff, the more brilliant and useful it seems, even if it is aimed at others more than myself insee a compelling case to be made. But unless there is a whole lot more to this, I am not impressed so far. Anyone help make a case to me for why this is a great thing?



    We keep hearing about these deals with the labels as if it's the focus of iCloud. I don't think it is. I think it's the loose lips outside Cupertino that are making seem that way. Even if we ignore all other aspects of automatic, peace-of-mind redundancy that digital downloads and syncing between these devices, I think you and others do get it, you just don't realize you get in the way it keep being presented.



    I see these deals as just a rewriting of a contract that previously didn't include this provision. Even if it's something you won't use ever or often it beehives Apple to get the content owners approval first, unlike their competitors did with a much simpler "locker" option.



    Besides always being able to re-download any lost content I've bought on iTunes Store the way I can with the App Store I hope this new deal allows for sharing of a song much in the same MS did with the Zune.



    I suspect your online music will be almost instantly available online because it'l use the same data your Genius playlist and recommendation data that you've been sending to Apple for a couple years. They're server will simply match that with the music you've bought and give you a resource link to that item, much like Time Machine and Dropbox's file system works.





    Quote:
    Originally Posted by magicj View Post


    Meanwhile, the B&N nook is selling 150% more books than Apple's iPad, iPhone, and iPod Touch combined, despite selling far fewer devices. There's clearly a need to improve in this area on Apple's part. Yet... nothing.



    You're comparing digital book sales to a HW device. That's even more foolish than comparing a free OS to a HW sale.



    I bet Apple sells more iBookstore books than iPads despite it being a separate app that needs to be downloaded and installed.





    Quote:
    Originally Posted by Porchland View Post


    I'm still not convinced that the ability to stream your iTunes purchases is worth $25 a year if most of the other cloud features are free, so I think Apple will have a few surprises that come with that $25.



    The big sell to me would be never having to sync my iPhone or iPad back to iTunes on my Mac, but that strikes me more as an evolutionary progression of iOS than something Apple would expect me to pay extra to be able to do.



    I can't imagine that it would $25/year just for music streaming. Jobs has long since stated that people want to ultimately own music so I can't imagine this as anything but an option for your owned music.



    You can already sync a great many aspects of your iDevices to MobileMe. All my most important items that I'm likely to change while using the device are synced.



    Next week I hope they 1) show iMac/iPhone/iPad Universal apps that syncs settings between devices OTA.
  • Reply 22 of 40
    zoetmbzoetmb Posts: 2,618member
    Quote:
    Originally Posted by solipsism View Post


    This might help put it in perspective. Between September 9, 2009 and February 24, 2010 Apple announced milestones of 8.6 billion and 10 billion for music sales, respectively. That's 1.4 billion songs in 168 days, or 8.3 million per day. If Apples only holds onto 30% the labels get $5,775,000 per day, or $173,250,000 per month, or over a half-billion per quarter.



    (I see others are focusing on how little of a drop in the bucket this is to Apple, whilst my calculations are how it's substantial to the labels.)



    Edit: Oops, I did my calsulations based on 99¢ pet song, not the now standard $1.29.



    At 8.3 million songs per day, that's a bit over 3 billion songs a year. And while I realize the time periods don't match exactly, the RIAA reported only 1.9 billion equivalent song downloads for the calendar year 2009 (1.138 billion song downloads + 76.4 million album downloads which they multiply by 10 to get a song equivalent). So the numbers don't seem to sync up - someone's numbers are off by at least a third (also since Apple doesn't have 100% of the business.)
  • Reply 23 of 40
    magicjmagicj Posts: 406member
    Quote:
    Originally Posted by solipsism View Post


    You're comparing digital book sales to a HW device. That's even more foolish than comparing a free OS to a HW sale.



    I bet Apple sells more iBookstore books than iPads despite it being a separate app that needs to be downloaded and installed.



    solipsism, why do you continue to post when you have no idea what you're talking about? Is someone paying by the post?



    Apple's iBook store has 10% of the e-book market. B&N's nook bookstore has 25% of the e-book market.
  • Reply 24 of 40
    steven n.steven n. Posts: 1,226member
    If it really was partially based on number of uploaded tracks.



    Google is offering 20,000 tracks and wanted to pay the labels 100,000,000 USD. Apple, my bet, will offer 4,000-5,000 tracks and it is costing 150,000,000 USD.



    When Google was saying the labels were unable to see the future, they really meant the labels wanted 600,000,000 USD and Google was thinking, we would actually have to charge for that and have a customer relationship with our products.
  • Reply 25 of 40
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by zoetmb View Post


    At 8.3 million songs per day, that's a bit over 3 billion songs a year. And while I realize the time periods don't match exactly, the RIAA reported only 1.9 billion equivalent song downloads for the calendar year 2009 (1.138 billion song downloads + 76.4 million album downloads which they multiply by 10 to get a song equivalent). So the numbers don't seem to sync up - someone's numbers are off by at least a third (also since Apple doesn't have 100% of the business.)



    Where is the RIAA link? I used Wikipedia as my starting point to get specific dates and quantities.
    From there there are plenty of citations about milestones, some right from Apple's own PR. Looks like they did nearly 4 billion for calendar year 2009.
    • January, 2009 — 6 Billion

    • February, 2010 — 10 billion
  • Reply 26 of 40
    magicjmagicj Posts: 406member
    Quote:
    Originally Posted by Blastdoor View Post


    My guess as to what that strategy is --- sell a "cheap" iPhone with very low capacity at a very low subsidized price, but then make money off of a monthly iCloud subscription fee. That iCloud subscription would be necessary for the phone to work at all, and it's where all of a person's files would be kept, including music. If a strategy like this were to allow Apple to dramatically increase the number of iPhones that get sold while maintaining high profit margins, then $150 million would be well worth the price.



    That's at least a reasonable idea.



    But if all you took out of the phone was the storage, would it really lower the cost that much? Perhaps such a phone would have to be closer to a iPod, i.e. weak processor, no touch screen. Get rid of all that stuff and I could see the price dropping.
  • Reply 27 of 40
    charlitunacharlituna Posts: 7,217member
    Quote:
    Originally Posted by Wurm5150 View Post


    $150M? That's nothing. Apple makes that much in a couple minutes. They already made $150M after I finished typing this comment.



    From what my sources told me that is $150M flat paid to get them to sign up. And then they get a cut of the signups. Which is why any rumor of a free trial that doesn't say 'restricted to what you bought on iTunes' is bogus. The labels wouldn't agree to any other terms on that one.
  • Reply 28 of 40
    peteopeteo Posts: 402member
    Quote:
    Originally Posted by Steven N. View Post


    If it really was partially based on number of uploaded tracks.



    Google is offering 20,000 tracks and wanted to pay the labels 100,000,000 USD. Apple, my bet, will offer 4,000-5,000 tracks and it is costing 150,000,000 USD.



    When Google was saying the labels were unable to see the future, they really meant the labels wanted 600,000,000 USD and Google was thinking, we would actually have to charge for that and have a customer relationship with our products.



    Theres going to a limit to how many tracks you can have?

    What the hell is the point of streaming then?

    5,000 * 3Mb per a track is only 15 gigs. So only if you have a low end iPod/iPhone/iPad will it matter. Also who has 5,000 iTunes purchased songs?



    I just don't see the music locker being worth it. Now if it was a music subscription (all you can eat), then I'm in.
  • Reply 29 of 40
    jd_in_sbjd_in_sb Posts: 1,600member
    Steve could find $150 million lost in his couch!
  • Reply 30 of 40
    blastdoorblastdoor Posts: 2,681member
    Quote:
    Originally Posted by magicj View Post


    That's at least a reasonable idea.



    But if all you took out of the phone was the storage, would it really lower the cost that much? Perhaps such a phone would have to be closer to a iPod, i.e. weak processor, no touch screen. Get rid of all that stuff and I could see the price dropping.



    It's not really that getting rid of the storage reduces the cost, it's that getting rid of the storage forces you to use the cloud service. The cost isn't actually lowered much at all. It's just that instead of being paid up front, it's paid over time through iCloud fees. Basically I'm suggesting that Apple would be getting in on the carrier model of subsidizing a phone but then recouping that subsidy through monthly fees, but for apple it would be iCloud fees.



    Note that what I'm describing probably wouldn't really be very appealing in the US. This would be more of a developing world thing, where carriers often won't subsidize a phone and require that the full price be paid up front.



    I also doubt that what I'm describing will happen immediately. We might not hear about it at WWDC. The iCloud that is announced next week might be a new step along the road to what I'm describing.



    Or my guess is totally wrong and Apple is starting to get a little sloppy with their cash, which would be a shame (but not impossible).
  • Reply 31 of 40
    gatorguygatorguy Posts: 23,379member
    Quote:
    Originally Posted by Blastdoor View Post


    My guess as to what that strategy is --- sell a "cheap" iPhone with very low capacity at a very low subsidized price, but then make money off of a monthly iCloud subscription fee. That iCloud subscription would be necessary for the phone to work at all, and it's where all of a person's files would be kept, including music. If a strategy like this were to allow Apple to dramatically increase the number of iPhones that get sold while maintaining high profit margins, then $150 million would be well worth the price.



    Isn't that Google's exact plan for ChromeBooks? Sell 'em cheap, charge monthly subscription and lock the users in to Google's ecosystem with cloud-stored files.
  • Reply 32 of 40
    cvaldes1831cvaldes1831 Posts: 1,832member
    They would be "advance" payments, not "advanced."
  • Reply 33 of 40
    zoetmbzoetmb Posts: 2,618member
    Quote:
    Originally Posted by solipsism View Post


    Where is the RIAA link? I used Wikipedia as my starting point to get specific dates and quantities.
    From there there are plenty of citations about milestones, some right from Apple's own PR. Looks like they did nearly 4 billion for calendar year 2009.
    ? January, 2009 ? 6 Billion

    ? February, 2010 ? 10 billion



    Here's the latest RIAA stats for 2009 and 2010:

    http://76.74.24.142/548C3F4C-6B6D-F7...5E2AB93610.pdf
  • Reply 34 of 40
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by zoetmb View Post


    Here's the latest RIAA stats for 2009 and 2010:

    http://76.74.24.142/548C3F4C-6B6D-F7...5E2AB93610.pdf



    Thanks for the link. Your calculations match mine but I don't see a discrepancy. RIAA is all the music is the US, nor does it account for all the markets in which iTunes Store exists.
  • Reply 35 of 40
    triggstriggs Posts: 28member
    Quote:
    Originally Posted by magicj View Post


    I'm in the same boat you are. This looks to me to be nothing more than determination to have a cloud product despite 6 or so years of yawns from consumers regarding their previous cloud products.



    Meanwhile, the B&N nook is selling 150% more books than Apple's iPad, iPhone, and iPod Touch combined, despite selling far fewer devices. There's clearly a need to improve in this area on Apple's part. Yet... nothing.



    I look at it this way.. by turning your music library into a streaming service it "offloads" the music storing responsibilities of your iDevice, doing one or both of 2 things: (1) reducing the amount of memory needed per iDevice - this could have a bigger play if Apple were to release an iPhone mini or iPod Touch Nano or something, and (2) continues to shift the focus of iDevices away from their "music player" legacy and more into the App Machine or PDA category. The benefit here is that it continues to raise the brand image of Apple's products vs. the competition. I.e. an "MP3 player" will be a cheap little thing that hangs on a hook in K-Mart, packaged in a bubble wrapper a-la the Sony Walkman knockoffs of the 1980's and 1990's
  • Reply 36 of 40
    asdasdasdasd Posts: 5,685member
    Quote:
    Originally Posted by peteo View Post


    Theres going to a limit to how many tracks you can have?

    What the hell is the point of streaming then?

    5,000 * 3Mb per a track is only 15 gigs. So only if you have a low end iPod/iPhone/iPad will it matter. Also who has 5,000 iTunes purchased songs?



    I just don't see the music locker being worth it. Now if it was a music subscription (all you can eat), then I'm in.



    How much space do you think the average user has on his iPhone, or iPad after apps, and the system gobbles up its percentages? The iPod app on the iPhone is just that - an app. If any other app needed 5G to work, you would complain.



    But lets digress for a moment. Apple want to win the high end and the low end. This locker part of the iCloud is, i think, mainly for the low end consumer. It means Apple can produce a 4G model iPhone next year, or an 8G iPad with low component specs. You might turn your nose up at it, however it would still have the Apple brand and it would no more harm that brand than the Apple Nano does. The high end would be better option , after al the higher end user can have his 5000 tracks on his device and play on the plane or the tube, or in the signal deficient countryside. But for the poorer user, the locker is a god send.



    In China, Eastern Europe, India a $200-$300 iPhone would walk of the shelves. And I bet they may go cheaper. An iPhone in 2012 with a 2 year old processor, 4G of disk, 256 ( 128?) RAM, could sell for peanuts and play all your musicand store all your apps.



    The locker will do that too, I assume. Run out of disk space for an app bought on the iPhone and it will offer you a screen to put some of your apps in the locker. All Apple need to know is if a guy already owns the app, and they have it all ready - the digital cost is zero. The time to upload is zero. So run out of space on the device and you can move apps to the locker. The only complication there is they may have to store data, with your app. Thats possibly what the NC centre is for (it seems a lot of space otherwise, as streaming can be handled by the CDN's like Akamai.)



    They will also, at some point, produce a streaming radio type service. Maybe not tuesday. With fair use policy you can actually play songs for your friends. Ping may become useful again. If thye want to do spotifiy, no better company. I see it happening



    Apple are really confident about this because they know they can stream music with few glitches - the 30 second clips, they know they can store credit care details, and they know they have the NC centre. Hard to see what can go wrong. Touch wood.
  • Reply 37 of 40
    asdasdasdasd Posts: 5,685member
    And it that was tl'dr - this an amazing thing for Apple. Google must be pissed.
  • Reply 38 of 40
    docno42docno42 Posts: 3,709member
    Quote:
    Originally Posted by asdasd View Post


    And it that was tl'dr - this an amazing thing for Apple. Google must be pissed.



    Google? Amateur hour by the guys who sole business model is selling advertising by any and all means possible
  • Reply 39 of 40
    charelcharel Posts: 93member
    What if iCloud is not about music at all, but music is just part of it. What if it is the beginning of doing away with the PC for syncing and starting iOS devices out of the box.

    For those, who are just starting, without a huge legacy of contend they may use their Apple products without ever to invest in a PC at all.

    That will be a huge advantage for Apple over MS and Google.



    Monday will put us out of our speculative misery and Steve will reveal all.
  • Reply 40 of 40
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by Charel View Post


    What if iCloud is not about music at all, but music is just part of it.



    I am hoping. Cloud music by itself doesn't interest me at all, and I suspect that it isn't compelling for more than one out of three people. If it's not a lot more than an entertainment service I predict a collective yawn.
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