Bottom Of The Barrel

iTunes, closing it's doors?

The Copyright Royalty Board is due to rule on a proposal by the National Music Publishers' Association to increase the royalty for a song download from nine cents a track to 15 cents. In a preemptive strike, Apple has already announced that there was no way that any of their [new] pricing structures would make money, and that if iTunes did not make money then the site would be shut down. Now I will grant that 66 percent hike in fees is a stiff one [that's what she said] however I find it hard to believe that giving up an extra 6 cents per song would sink Apple's biggest revenue center. Here is a graph showing the length of time it has taken iTunes to go from 0 to 5 billion songs sold:



What I see is a company who has gone from selling 968 to 6,370 songs per day. Even if their profit margin has always been 1 penny, they have 6.5 time more purchases everyday to profit from. Additionally, Apple has an 85 percent market share in online music and, in April, passed Wal-Mart as the No. 1 music retailer in the U.S.

On the other hand, perhaps Apple should close iTunes and allow someone else to enter the market and take over their 2 million songs sold per year market and see if they can make it profitable, using bit torrent as their platform for example. Distributing computing could yet find it's place. Does ELTunes [Ed and Lisa's Tunes] have a ring to it? I think it does...

Labels: Music

posted by TheWino @ 7:18 AM