Of course. You can burn your tunes to cd, and lose the DRM, so that you could play it anywhere else.
If I have to burn it to a CD to re-rip it afterwards, what is the whole point of buying via download vs. ordering a CD in the first place?
Quote:
There isn't any guarantee that the WMP will be around any longer, or Real's format, or Sony's, or any other. What about OGG Vorbus? do you think that will be here in 20 years? I doubt it.
Well, Ogg Vorbis is an open specification with an opensource implementation, so chances are it will still be around in 20 years time. After all, GIF is now 18 years old and still widely in use and JPEG is 13 and even stronger.
As a side note, when comparing music stores, you have to consider the DRM. With Napster, for exampole, you have to keep paying in order to keep the music, whereas with Apple you own it, alebit with some anti-copying devices.
I would support the theory that iTMS and the iPod are simply superior products to the competition's offerings.
Man, I hate it when people don't know the businesses they talk about (esp. when they trash them over and over again).
What you say is true for Napster's subscription service. However, you can still buy music from napster without having to pay a monthly fee, just like the iTMS.
I don't think it is realistic to expect Apple to licence WMA and its DRM from M$ (it ain't free) just so iPod users can shop at the competition's music stores.
I don't think it is realistic to expect Apple to licence WMA and its DRM from M$ (it ain't free) just so iPod users can shop at the competition's music stores.
It's also not realistic to license Freeplay so that people can buy songs from iTMS for their non-iPod players.
Let's face it: Apple doesn't need to change what their doing right now. iTMS and iPod are both getting stellar results for Apple and its shareholders.
Let's also face the fact that Apple *knows* that people can find ways around iTMS songs not working with non-iPod players. Apple *knows* that people can figure out a way to get music from Napster into iTunes. Apple *knows* that people can free their bought music from DRM. People can gripe, but options are available. Consumers are NOT totally locked out from having choices. The options just are a little less convenient.
It's also not realistic to license Freeplay so that people can buy songs from iTMS for their non-iPod players.
Let's face it: Apple doesn't need to change what their doing right now. iTMS and iPod are both getting stellar results for Apple and its shareholders.
Let's also face the fact that Apple *knows* that people can find ways around iTMS songs not working with non-iPod players. Apple *knows* that people can figure out a way to get music from Napster into iTunes. Apple *knows* that people can free their bought music from DRM. People can gripe, but options are available. Consumers are NOT totally locked out from having choices. The options just are a little less convenient.
Jobs did say, some time ago, in an interview, that Apple would license this back and forth, as well as introduce a subscription service IF THEY FELT IT WAS NECESSARY.
Sorry about the caps, but that had to be emphasized. They aren't just sitting with their arms folded and their eyes closed. They will do what they need to do.
How is it that tunes from other sites don't work with the iPod? My old 30GB model is stuffed with tunes, and none of them come from the iTMS. I would assume that any MP3 or AAC would work. So we're talking about two things. One: Windows media. The sooner that dies, the better. Two: other players. They won't play iTMS tracks, but that's no reason not to stock or buy iPods so much as a reason not to frequent the iTMS.
So what's the real argument?
Walmart expects, demands, better margins than other sellers. They muscle a lot of suppliers with their capacity to shift stock -- you give walmart a few points off the wholesale, they sell a few a points lower than competitors' retail, and voila, they shift a lot of units, make lots of money for themselves. For some manufacturers this helps them make a lot of cash by selling lots of units quickly; though their margins shrink, it can be a good deal for a manufacturer. There are times when it's also a bad deal, ie, when you alienate/piss off other retailers, hurt your brand value, and overextend you production capacity only to have Walmart demand further, very aggressive wholesale price cuts. Now you can't go back to other retail partners because they're invested elsewhere and you can get stuck doing business on Walmart's terms.
Apple had no other interest than protecting its brand, by not letting Walmart dictate the terms.
Let's be clear, none of this makes either company good or bad, just wise or unwise as it pertains to furthering their own business. Walmart ran into a company that's just as staunch about controlling pricing, margins, and MSRP, as they are. Apple refused to have the terms dictated to them. Walmart came around when they realized that even at Apple prices, the iPod is a good draw, and it's better to have them inthe flyer to draw the shopper in, than advertise a number of cheaper models that nobody wants.
When you suceed, you dictate the terms. It's the same reason playstations, and xBoxes sell at the same price at walmart as they do anywhere else. Powerful brands, desired product, proven draw. If they want it, the manufacturer sets the agenda. No different with the iPod and Apple.
If they want it, the manufacturer sets the agenda.
Not necessarily. Walmart is well known in the industry for being a bully. They are so dead set on having low prices that they don't play nice a lot of times.
Manufacturers even have whole divisions that are set up in Bentonville, AR specifically to work with Walmart.
It's very important for Walmart to be seen in the industry as a powerful retail player. They would rather have press about losing a 'philosophical argument', than losing a market battle.
They can only muscle people that need Walmart's distribution channel. Apple doesn't. What's more, they interview itself indicates that not only did Apple NOT need Walmart, Walmart felt the need for more compelling consumer items in order to draw holiday customers.
Really powerful brands don't get muscled by Walmart.
[B]How is it that tunes from other sites don't work with the iPod? My old 30GB model is stuffed with tunes, and none of them come from the iTMS. I would assume that any MP3 or AAC would work. So we're talking about two things. One: Windows media. The sooner that dies, the better. Two: other players. They won't play iTMS tracks, but that's no reason not to stock or buy iPods so much as a reason not to frequent the iTMS.
You know. It's just the DRM. If you rip those songs from other sites onto a CD, you can put them onto the iPod. The CD rip removes the DRM - legally.
I think it more a question of iTMS music not working on non-iPod players, not the other way around. Am I wrong?
No, you're right.
Apple's Music Strategy 101, or "Why Apple Locks Everything Else Out (Right Now)."
We start with the question "Where can Apple make the most money regarding music?" This must be underscored by the premise that people want/have an mp3 player in concert with music purchased online for it.
If Apple keeps iTMS "ala carte" songs and iPods mutually exclusive for each other (as they currently are), anyone wanting an iPod will have to buy from the iTMS. Apple makes money from the iPod and (a little from) each song sold. Apple has always been very clear that iTMS is solely for the purpose of selling iPods.
If Apple allows non-iPod players to play music from the iTMS, Apple loses potential money on iPods but makes (a little) money from iTMS songs and licensing fees. Apple loses quite a bit because licensing fees probably won't cover what's lost from iPods not being sold. Bad news. So it is best for Apple to keep the iTMS and iPods exclusive to each other. People with iPods buy from iTMS. People buying from iTMS use iPods.
The Options
If iPod sales start to slip, Apple could license other DRMs to play on the iPod. Then everyone who's been "locked out" can buy an iPod and play the music they've bought at other stores. Boom, iPod sales go back up.
If iTMS sales start to slip, but iPod sales stay steady or soften a little, Apple could institute a subscription service on iTMS with the flip of a switch. Revenues would start to flow back in consistently every month and all is well with the iTMS. iPod sales stay steady.
"But CosmoNut," you ask, "Why doesn't Apple have a subscription service now?" The simple answer: They don't need one right now, and don't forget that making money of the iTMS is NOT Apple's biggest focus.
If the bubble bursts out from under Apple and iTMS AND iPod sales both begin to slip significantly, then Apple could both license other DRMs to play on iPods AND implement a subscription iTMS. More revenue (consistently) into iTMS through subscriptions and more iPods sold because they can play other DRMs.
Here's the important part. As long as Apple still wants to sell the iPod, there is NO scenario by which it makes sense for Apple to license the Freeplay DRM for non-iPod players. Doing so would only negatively affect iPod sales, which is the key to this whole thing.
Apple makes money from the iPod and (a little from) each song sold. Apple has always been very clear that iTMS is solely for the purpose of selling iPods.
In fact, a recent O'Reilly book reveals that the German iTMS, for one, makes a loss (of a few cents) on every song sold. I wouldn't be surprised if that is the case for (a few) other countries as well.
If iTMS sales start to slip, but iPod sales stay steady or soften a little, Apple could institute a subscription service on iTMS with the flip of a switch. Revenues would start to flow back in consistently every month and all is well with the iTMS. iPod sales stay steady.
"But CosmoNut," you ask, "Why doesn't Apple have a subscription service now?" The simple answer: They don't need one right now, and don't forget that making money of the iTMS is NOT Apple's biggest focus.
If the bubble bursts out from under Apple and iTMS AND iPod sales both begin to slip significantly, then Apple could both license other DRMs to play on iPods AND implement a subscription iTMS. More revenue (consistently) into iTMS through subscriptions and more iPods sold because they can play other DRMs.
Here's the important part. As long as Apple still wants to sell the iPod, there is NO scenario by which it makes sense for Apple to license the Freeplay DRM for non-iPod players. Doing so would only negatively affect iPod sales, which is the key to this whole thing.
Class dismissed. Don't forget tomorrow's exam. [/B]
Very good!
One more reason against a subscription.
At this time, there is NO agreement between the subscription companies and the music industry. This may be hard to believe, but it is true.
Since the subscriptions have started, money has been put in escrow accounts for the music industry, but has not been paid out. Other than the parties involved, no one knows how much money is being deposited in those accounts.
People might remember that not too long ago MS gave up in its negotiations with the music industry about subscription pricing, saying that they were too ridged, and were asking too much. The industry was demanding between $6.50 and $8.50 per individual subscription per month.
Match this to what Yahoo was charging.
The music industry said not long ago that they were at the end of their patience, and would not let negotiations go on much longer.
This leaves the question of what happens if they are not able to come to some agreement.
Will a lack of an agreement force the subscription companies to close their doors?
If that happens then:
Will those with subscriptions lose all of the songs?
Will some way be found to let them maintain some ability to use them?
Apple would be smart to stay away from this until it is resolved.
In fact, a recent O'Reilly book reveals that the German iTMS, for one, makes a loss (of a few cents) on every song sold. I wouldn't be surprised if that is the case for (a few) other countries as well.
Apple was losing money on each song sold here as well. They have to sell a certain minimum a month to cover costs. Below that no one can make money.
From what I've read, Apple is the only one making money on this. No one else is selling enough. The subscription companies can make money as well unless what I posted above ends up happening.
[B]That wasn't the same; that was to cover their initial investments. They have done that now.
It isn't just the initial investments that count. It's the costs of running the sites, cost for network bandwidth, updates, and upgrades to the sites, costs involved in updating the song databases, etc.
Those costs, while not exactly fixed, don't vary much as the number of song sales go up. When the number gets above whatever number is needed for break even, the start to make a small profit.
The money paid to the music industry is fixed per song, but, of course the total per song sold
[QUOTE[
No. For Germany, Apple pays more than they earn. Simple as that. [/QUOTE]
Where do you get those numbers from, and what would they be?
It isn't just the initial investments that count. It's the costs of running the sites, cost for network bandwidth, updates, and upgrades to the sites, costs involved in updating the song databases, etc.
Those costs, while not exactly fixed, don't vary much as the number of song sales go up. When the number gets above whatever number is needed for break even, the start to make a small profit.
I realize that. You're missing my point. It doesn't matter how many songs get sold: certain prices will stay fixed, as you said yourself. Therefore, unless pricing changes, German iTMS will continue to make a per-song loss.
Quote:
Where do you get those numbers from, and what would they be?
I doubt very much that Apple would be that dumb.
How is that dumb? They make a lot of revenues from iPods.
I realize that. You're missing my point. It doesn't matter how many songs get sold: certain prices will stay fixed, as you said yourself. Therefore, unless pricing changes, German iTMS will continue to make a per-song loss.
How is that dumb? They make a lot of revenues from iPods.
Bacause Apple isn't going to negotiate a deal where they never have a chance to recover their money.
They have to keep iTune finances seperate from those of the iPod. It's basic accounting. Jobs is too shrewd to allow this to happen.
If what you said was true, then the more songs they sold, the more money they would lose. I can't see that happening. Whatever you read must have misunderstood the situation.
Where did you get this info? I haven't seen it anywhere. It would have been big news, if true.
I should get my year-end financial report from them soon, as it has been released. It might have a breakdown.
EDIT! Sorry, didn't see the link at the bottom. It would be more helpful if I could read it.
Comments
Originally posted by melgross
Of course. You can burn your tunes to cd, and lose the DRM, so that you could play it anywhere else.
If I have to burn it to a CD to re-rip it afterwards, what is the whole point of buying via download vs. ordering a CD in the first place?
There isn't any guarantee that the WMP will be around any longer, or Real's format, or Sony's, or any other. What about OGG Vorbus? do you think that will be here in 20 years? I doubt it.
Well, Ogg Vorbis is an open specification with an opensource implementation, so chances are it will still be around in 20 years time. After all, GIF is now 18 years old and still widely in use and JPEG is 13 and even stronger.
Originally posted by mynamehere
As a side note, when comparing music stores, you have to consider the DRM. With Napster, for exampole, you have to keep paying in order to keep the music, whereas with Apple you own it, alebit with some anti-copying devices.
I would support the theory that iTMS and the iPod are simply superior products to the competition's offerings.
Man, I hate it when people don't know the businesses they talk about (esp. when they trash them over and over again).
What you say is true for Napster's subscription service. However, you can still buy music from napster without having to pay a monthly fee, just like the iTMS.
More Info
Originally posted by funkfeend
I don't think it is realistic to expect Apple to licence WMA and its DRM from M$ (it ain't free) just so iPod users can shop at the competition's music stores.
It's also not realistic to license Freeplay so that people can buy songs from iTMS for their non-iPod players.
Let's face it: Apple doesn't need to change what their doing right now. iTMS and iPod are both getting stellar results for Apple and its shareholders.
Let's also face the fact that Apple *knows* that people can find ways around iTMS songs not working with non-iPod players. Apple *knows* that people can figure out a way to get music from Napster into iTunes. Apple *knows* that people can free their bought music from DRM. People can gripe, but options are available. Consumers are NOT totally locked out from having choices. The options just are a little less convenient.
Originally posted by CosmoNut
It's also not realistic to license Freeplay so that people can buy songs from iTMS for their non-iPod players.
Let's face it: Apple doesn't need to change what their doing right now. iTMS and iPod are both getting stellar results for Apple and its shareholders.
Let's also face the fact that Apple *knows* that people can find ways around iTMS songs not working with non-iPod players. Apple *knows* that people can figure out a way to get music from Napster into iTunes. Apple *knows* that people can free their bought music from DRM. People can gripe, but options are available. Consumers are NOT totally locked out from having choices. The options just are a little less convenient.
Jobs did say, some time ago, in an interview, that Apple would license this back and forth, as well as introduce a subscription service IF THEY FELT IT WAS NECESSARY.
Sorry about the caps, but that had to be emphasized. They aren't just sitting with their arms folded and their eyes closed. They will do what they need to do.
So what's the real argument?
Walmart expects, demands, better margins than other sellers. They muscle a lot of suppliers with their capacity to shift stock -- you give walmart a few points off the wholesale, they sell a few a points lower than competitors' retail, and voila, they shift a lot of units, make lots of money for themselves. For some manufacturers this helps them make a lot of cash by selling lots of units quickly; though their margins shrink, it can be a good deal for a manufacturer. There are times when it's also a bad deal, ie, when you alienate/piss off other retailers, hurt your brand value, and overextend you production capacity only to have Walmart demand further, very aggressive wholesale price cuts. Now you can't go back to other retail partners because they're invested elsewhere and you can get stuck doing business on Walmart's terms.
Apple had no other interest than protecting its brand, by not letting Walmart dictate the terms.
Let's be clear, none of this makes either company good or bad, just wise or unwise as it pertains to furthering their own business. Walmart ran into a company that's just as staunch about controlling pricing, margins, and MSRP, as they are. Apple refused to have the terms dictated to them. Walmart came around when they realized that even at Apple prices, the iPod is a good draw, and it's better to have them inthe flyer to draw the shopper in, than advertise a number of cheaper models that nobody wants.
When you suceed, you dictate the terms. It's the same reason playstations, and xBoxes sell at the same price at walmart as they do anywhere else. Powerful brands, desired product, proven draw. If they want it, the manufacturer sets the agenda. No different with the iPod and Apple.
Originally posted by Matsu
If they want it, the manufacturer sets the agenda.
Not necessarily. Walmart is well known in the industry for being a bully. They are so dead set on having low prices that they don't play nice a lot of times.
Manufacturers even have whole divisions that are set up in Bentonville, AR specifically to work with Walmart.
It's very important for Walmart to be seen in the industry as a powerful retail player. They would rather have press about losing a 'philosophical argument', than losing a market battle.
They can only muscle people that need Walmart's distribution channel. Apple doesn't. What's more, they interview itself indicates that not only did Apple NOT need Walmart, Walmart felt the need for more compelling consumer items in order to draw holiday customers.
Really powerful brands don't get muscled by Walmart.
Originally posted by Matsu
[B]How is it that tunes from other sites don't work with the iPod? My old 30GB model is stuffed with tunes, and none of them come from the iTMS. I would assume that any MP3 or AAC would work. So we're talking about two things. One: Windows media. The sooner that dies, the better. Two: other players. They won't play iTMS tracks, but that's no reason not to stock or buy iPods so much as a reason not to frequent the iTMS.
You know. It's just the DRM. If you rip those songs from other sites onto a CD, you can put them onto the iPod. The CD rip removes the DRM - legally.
I think it more a question of iTMS music not working on non-iPod players, not the other way around. Am I wrong? Haven't followed this too closely.
As for the rest, I'm sure the argument is economic, not philosophical.
Originally posted by Matsu
I think it more a question of iTMS music not working on non-iPod players, not the other way around. Am I wrong?
No, you're right.
Apple's Music Strategy 101, or "Why Apple Locks Everything Else Out (Right Now)."
We start with the question "Where can Apple make the most money regarding music?" This must be underscored by the premise that people want/have an mp3 player in concert with music purchased online for it.
If Apple keeps iTMS "ala carte" songs and iPods mutually exclusive for each other (as they currently are), anyone wanting an iPod will have to buy from the iTMS. Apple makes money from the iPod and (a little from) each song sold. Apple has always been very clear that iTMS is solely for the purpose of selling iPods.
If Apple allows non-iPod players to play music from the iTMS, Apple loses potential money on iPods but makes (a little) money from iTMS songs and licensing fees. Apple loses quite a bit because licensing fees probably won't cover what's lost from iPods not being sold. Bad news. So it is best for Apple to keep the iTMS and iPods exclusive to each other. People with iPods buy from iTMS. People buying from iTMS use iPods.
The Options
If iPod sales start to slip, Apple could license other DRMs to play on the iPod. Then everyone who's been "locked out" can buy an iPod and play the music they've bought at other stores. Boom, iPod sales go back up.
If iTMS sales start to slip, but iPod sales stay steady or soften a little, Apple could institute a subscription service on iTMS with the flip of a switch. Revenues would start to flow back in consistently every month and all is well with the iTMS. iPod sales stay steady.
"But CosmoNut," you ask, "Why doesn't Apple have a subscription service now?" The simple answer: They don't need one right now, and don't forget that making money of the iTMS is NOT Apple's biggest focus.
If the bubble bursts out from under Apple and iTMS AND iPod sales both begin to slip significantly, then Apple could both license other DRMs to play on iPods AND implement a subscription iTMS. More revenue (consistently) into iTMS through subscriptions and more iPods sold because they can play other DRMs.
Here's the important part. As long as Apple still wants to sell the iPod, there is NO scenario by which it makes sense for Apple to license the Freeplay DRM for non-iPod players. Doing so would only negatively affect iPod sales, which is the key to this whole thing.
Class dismissed. Don't forget tomorrow's exam.
Originally posted by CosmoNut
Apple makes money from the iPod and (a little from) each song sold. Apple has always been very clear that iTMS is solely for the purpose of selling iPods.
In fact, a recent O'Reilly book reveals that the German iTMS, for one, makes a loss (of a few cents) on every song sold. I wouldn't be surprised if that is the case for (a few) other countries as well.
Originally posted by CosmoNut
If iTMS sales start to slip, but iPod sales stay steady or soften a little, Apple could institute a subscription service on iTMS with the flip of a switch. Revenues would start to flow back in consistently every month and all is well with the iTMS. iPod sales stay steady.
"But CosmoNut," you ask, "Why doesn't Apple have a subscription service now?" The simple answer: They don't need one right now, and don't forget that making money of the iTMS is NOT Apple's biggest focus.
If the bubble bursts out from under Apple and iTMS AND iPod sales both begin to slip significantly, then Apple could both license other DRMs to play on iPods AND implement a subscription iTMS. More revenue (consistently) into iTMS through subscriptions and more iPods sold because they can play other DRMs.
Here's the important part. As long as Apple still wants to sell the iPod, there is NO scenario by which it makes sense for Apple to license the Freeplay DRM for non-iPod players. Doing so would only negatively affect iPod sales, which is the key to this whole thing.
Class dismissed. Don't forget tomorrow's exam.
Very good!
One more reason against a subscription.
At this time, there is NO agreement between the subscription companies and the music industry. This may be hard to believe, but it is true.
Since the subscriptions have started, money has been put in escrow accounts for the music industry, but has not been paid out. Other than the parties involved, no one knows how much money is being deposited in those accounts.
People might remember that not too long ago MS gave up in its negotiations with the music industry about subscription pricing, saying that they were too ridged, and were asking too much. The industry was demanding between $6.50 and $8.50 per individual subscription per month.
Match this to what Yahoo was charging.
The music industry said not long ago that they were at the end of their patience, and would not let negotiations go on much longer.
This leaves the question of what happens if they are not able to come to some agreement.
Will a lack of an agreement force the subscription companies to close their doors?
If that happens then:
Will those with subscriptions lose all of the songs?
Will some way be found to let them maintain some ability to use them?
Apple would be smart to stay away from this until it is resolved.
Originally posted by Chucker
In fact, a recent O'Reilly book reveals that the German iTMS, for one, makes a loss (of a few cents) on every song sold. I wouldn't be surprised if that is the case for (a few) other countries as well.
Apple was losing money on each song sold here as well. They have to sell a certain minimum a month to cover costs. Below that no one can make money.
From what I've read, Apple is the only one making money on this. No one else is selling enough. The subscription companies can make money as well unless what I posted above ends up happening.
Originally posted by melgross
Apple was losing money on each song sold here as well.
That wasn't the same; that was to cover their initial investments. They have done that now.
They have to sell a certain minimum a month to cover costs. Below that no one can make money.
No. For Germany, Apple pays more than they earn. Simple as that.
Originally posted by Chucker
[B]That wasn't the same; that was to cover their initial investments. They have done that now.
It isn't just the initial investments that count. It's the costs of running the sites, cost for network bandwidth, updates, and upgrades to the sites, costs involved in updating the song databases, etc.
Those costs, while not exactly fixed, don't vary much as the number of song sales go up. When the number gets above whatever number is needed for break even, the start to make a small profit.
The money paid to the music industry is fixed per song, but, of course the total per song sold
[QUOTE[
No. For Germany, Apple pays more than they earn. Simple as that. [/QUOTE]
Where do you get those numbers from, and what would they be?
I doubt very much that Apple would be that dumb.
Originally posted by melgross
It isn't just the initial investments that count. It's the costs of running the sites, cost for network bandwidth, updates, and upgrades to the sites, costs involved in updating the song databases, etc.
Those costs, while not exactly fixed, don't vary much as the number of song sales go up. When the number gets above whatever number is needed for break even, the start to make a small profit.
I realize that. You're missing my point. It doesn't matter how many songs get sold: certain prices will stay fixed, as you said yourself. Therefore, unless pricing changes, German iTMS will continue to make a per-song loss.
Where do you get those numbers from, and what would they be?
I doubt very much that Apple would be that dumb.
How is that dumb? They make a lot of revenues from iPods.
My information is from fscklog.
Originally posted by Chucker
I realize that. You're missing my point. It doesn't matter how many songs get sold: certain prices will stay fixed, as you said yourself. Therefore, unless pricing changes, German iTMS will continue to make a per-song loss.
How is that dumb? They make a lot of revenues from iPods.
My information is from fscklog.
Bacause Apple isn't going to negotiate a deal where they never have a chance to recover their money.
They have to keep iTune finances seperate from those of the iPod. It's basic accounting. Jobs is too shrewd to allow this to happen.
If what you said was true, then the more songs they sold, the more money they would lose. I can't see that happening. Whatever you read must have misunderstood the situation.
Where did you get this info? I haven't seen it anywhere. It would have been big news, if true.
I should get my year-end financial report from them soon, as it has been released. It might have a breakdown.
EDIT! Sorry, didn't see the link at the bottom. It would be more helpful if I could read it.
Originally posted by BRussell
Walmart tried to force Apple to put Windows Media songs on their iPods? Why in the world should Walmart care what plays on an iPod?
[edit] Oh, nevermind, I forgot that Walmart had its own music download store.
*cough*SonyBMG*cough*