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iTunes and iPod

Didn't someone complain about not being able to put their iTunes downloads on their portable MP3 player?

Turns out this is by design:
http://www.theregister.co.uk/content/6/33850.html

So now we have it on record: the music store is a loss leader. Jobs said Apple would pay its dues to the RIAA, then seek to make money where it could, from its line of hardware accessories. When the conversation turned to rivals such as eTunes and Napster, Jobs said: "They don't make iPods, so they don't have a related business where they do [make money]".

*****************

Apple doesn't WANT iTunes to work on anything but iPods, because that's where they plan to make a profit.

IMHO, Jobs just single-handedly killed iTunes. I think that if this little nugget becomes common knowledge, nobody will use it. In fact, this could hurt iPod sales if the reverse implication (that iPod can only play iTunes, which isn't true) becomes a common assumption.

Philo

Philo
Friday, November 07, 2003

a couple of days back I saw a new Rio player that can d/l songs from i-tunes windows and mac.

so much for apple's policy!

Prakash S
Friday, November 07, 2003

Apparently Steve Ballmer is a big iPod fan...

http://www.iwantmyflashtv.com/macboy/ballmersipod.swf

Interaction Architect
Friday, November 07, 2003

But everyone knows you can only play iTunes music on your iPod.  I just don't see what the big deal is.

abe
Friday, November 07, 2003

Hmm, usually it's the other way around. You buy the hardware but it's the software the real money maker. PCs and MS Windows are an example. Video games are another example.

Chi Lambda
Friday, November 07, 2003

I would fathom that the windows iTunes will do some good things for iPod sales overall  and good Mac advertising for windows users, so they will get their ROI. Loss leaders do seem to work pretty well.

Don't underestimate the religious potential of Mac-zealots. Even if iTunes for windows fails, they all see it as a big win for their cause against evil Bill.

I personally use iTunes - love it - and use my phone/PocketPC-pda as an MP3 player. I find the $.99 price to be a good enough deal to mess around with the formats a little to bridge the gap. I have always wanted an iPod, and sure, I'll admit, want one even more now. Yes, I am the same guy who will buy a Sony DVD just because I have a Sony TV.

I am reminded of the old Japanese proverb: "He who has a CD Player must also have CD's." In the case for Apple, it is the reverse.

m
Friday, November 07, 2003

So, Apple is commoditizing their compliments (the music service is a compliment to the iPod).  Not too much of a shock there.

Now, here's a question:

Apple isn't making money from the music store.  Other music services (MusicMatch, etc), are trying to offer prices that are competitive with the iTunes.  Are these services making a profit?

If they are, how?  Most of them don't have a hardware business to prop up their sales.  Are they doing something special to keep costs down that Apple can't do?

If they're not making any money either, then it stands to reason that this online music store fad could evaporate pretty quickly, except for companies that are using it as a complement to their hardware business (Apple and Dell).

Myron A. Semack
Friday, November 07, 2003

Only Sony can kill the Ipod.

ktm
Friday, November 07, 2003

You really don't like iTunes, do you?!

Okay, so music that you buy from the iTunes music store can only be downloaded to one kind of MP3 player, the iPod. But:

1. You can burn CDs from the music you buy from the iTunes Music Store, and those CDs will play in any CD player (portable, home stereo, computer, etc.)

2. You can also use iTunes as a jukebox on your computer, playing tunes that you buy or tunes that you rip from CDs.

So really, the only drawback is if you want to play that music on a portable MP3 player, and if your portable MP3 player isn't the iPod (currently the top-selling portable MP3 player by a long shot), then you're out of luck. Fine, then don't use iTunes.

Brad
Friday, November 07, 2003

http://reviews.cnet.com/4520-6450_7-5102324-1.html

Prakash S
Friday, November 07, 2003

I was the original "complainer"

Update.....

1) I had to burn the songs that I bought through ITunes to a CD.

2) I then proceeded to rip the songs back to ITunes as a Mp3 (This is the point at which I was hoping for a better solution).

3)Now that I have the song in Mp3 format I can copy it to my Pocket PC memory cards or burn another CD with MP3 encoding so my car stereo (which supports Mp3) & my DVD/CD Stereo in the house (which also supports Mp3) can play it.

I can work around the silliness but my point is: I bought the song - I own it - therefore why punish those of us who do it legally?

Meanwhile those of you who ilegally download the same songs via LimeWire / Kazaa etc - don't have to do any work arounds!!!!

Just doesn't make sense......

GenX'er
Friday, November 07, 2003

I understand the problems with the iTunes Music Store, DRM, and mp3 players, but I don't really care at the moment. I use a Mac with an iPod, and it works so well that I can't complain.

Fred2000
Friday, November 07, 2003

Fred2000 hit the nail on the head. For those that care, they figure out how to download from kazaa, re-rip, re-burn, and further fudge about until they get what they want. However, most users don't care.

ktm
Friday, November 07, 2003

"You really don't like iTunes, do you?!"

Actually I have zero opinion about iTunes in general. I *do* support the licensed downloading of music for small fees, though I think RIAA should've been concentrating on that instead of their jihad/crusade against p2p for the last five years.

What I *don't* like are companies with good products making stupid mistakes. Like setting up a restrictive DRM regime and not prepping your support staff to treat confused customers gently, or having the CEO openly admit that he's trying to lock his revolutionary online music service to his hardware so he can make a profit. Even if that's the plan, IMHO it's a mistake to openly admit it.

But then, Jobs is an arrogant idiot, so this isn't really any kind of surprise.

Philo

Philo
Friday, November 07, 2003

Geez man. Loosen up. You have one third-hand account of someone who wasn't impressed with the Apple service, and a story from the Register (ugh) where some writer thinks that Steve Jobs is a lousy businessman.

So he's not making money on it. Big deal. So Joel doesn't make money off of having these forums. Big deal. They each have their reasons for doing so, one of them likely being advertising.

Think broader, how much is it worth to Apple to have millions of Windows PC's with AAC-formatted music on them? I don't know, but it's certainly worth something.

Of course he's locking it to the iPod. Apple is primarily a hardware company, and a very good one.

How much do you think it would cost to get the same amount of publicity as Apple got from porting iTunes to Windows? Lots. How much is it worth to them to have me using their software on Windows, and looking at their logo everyday when I run iTunes? Lots.

By the way...your grocery store probably sells milk at a loss too....ssshhhhhhh....

NC
Friday, November 07, 2003

So pardon me for pointing out what I consider to be bad business moves when I see them. This is a discussion board and you're saying I shouldn't discuss things?

Yeah, the grocery store probably sells milk at a loss. I'd still say it wouldn't be too bright for the owner of that store chain to proudly say in an interview "yeah, we sell milk at a loss to suck people in so we can make a profit on everything else we sell"

And of course I have to apply Philo's "Our sales would plummet" law here - would iTunes do as well if it said in large friendly words on the home page "WARNING - ITUNES MUSIC CAN ONLY BE CARRIED ON IPOD MP3 PLAYERS"? ;-)

Philo

Philo
Friday, November 07, 2003

The original article states that all music copyrights are held by a greedy cartel of 5 labels. Is this a fact or something they made up? I know that no cartel owns the copyrights to the songs from our punk band - it's a small indy label. And looking thorough my record collection, I am skeptical that many of the small labels represented there are really owned by one of 5 giant corporations, all of whom are evil.

Dennis Atkins
Friday, November 07, 2003

Philo, I'd be the last one to suggest that you or anyone limit the discussion. I'm just saying that I don't think he's an idiot for trying to take a long-view at things.

Using a product as a loss-leader is perhaps risky, but it does work in many situations. I used Musicmatch until iTunes came out, and I won't go back anytime soon.  The next time I look at an portable player I'll consider the iPod, and if I'm using iTunes at the point it will certainly affect my decision.

Why is it bad practice to announce your intentions? Would you still come here if Joel announced that these discussion groups are a way for him to get cheap advertising for his products? I would imagine so.  It's a very good way for him to sell products and services, and more power to him.

Besides, iTunes music doesn't have to be just for the iPod. It rips my music to MP3's just fine, and plays my existing MP3's very well. It's not a huge lock-in. Then again, I'm in Canada, so the online store doesn't work for me.

NC
Friday, November 07, 2003

Here's a list of the labels that are members of the Recording Industry Association of America:
http://www.riaa.com/about/members/default.asp

That's just one of the five label organizations.

Philo

Philo
Friday, November 07, 2003

IMHO, my iPod is my "gadget buy" of 2003. I travel a lot for business & for personal reasons -- my iPod and a good paperback make those long international flights in coach almost bearable. I like the size of the iPod, the 40Gb hard drive, the nifty buttons and the fact that my 40+ year old eyes can read the screen. I have never owned a Mac, so I was very happy when iTunes for Windows came out. I haven't played with it a lot, but I like the smart playlists and it is fun to browse the music store. For me, it's a winner.

elmay
Friday, November 07, 2003

Geez Philo, you seem upset about "having the CEO openly admit that he's trying to lock his revolutionary online music service to his hardware so he can make a profit." Are you only upset by hardware lock-in?  Microsoft's business model is all about software lock-in, but that' OK?  I find it ironic that someone that promotes Microsoft as much as you have in this forum is bothered by Apple's easy to get around iPod lock-in.  I wish I could easily export Microsoft Access (or substitute with any number of Windows only applications/games/etc)  to work on my iBook.  They even tried to lock out other web browsers from msn.com, but as long as it's not a hardware lock-in it's OK?  What a hypocrite.

woodb
Friday, November 07, 2003

[sigh]
I don't have a problem with lock-in. The whole point of my post was that I thought it was silly for Steve Jobs to openly admit iTunes is all about forcing people to buy iPods. Maybe it's just the lawyer in me, but I'm always amused when a corporate CEO freely admits to committing a possible antitrust violation in print.

I would think it equally silly if Bill Gates said in an interview "well of course our entire goal with giving away IE is to lock people into Windows"

Philo

Philo
Friday, November 07, 2003

Philo, the RIAA does not own all those labels! They are members of the RIAA, not owned by it. Nice try though.

Dennis Atkins
Friday, November 07, 2003

Ah, sorry - I was thinking "five groups of labels" (except that doesn't make sense either, since I think there's only 1-2 minor players other than RIAA).

My fault. The author is talking about the "big five":
http://musicians.about.com/library/big5/blbig5.htm

Philo

Philo
Friday, November 07, 2003

In other shocking news, my bic refills don't fit in my Uni-Ball pens!!

abe
Friday, November 07, 2003

And the "Initiative for Software Choice" isn't about software choice.  Now I find that silly.

woodb
Friday, November 07, 2003

If I'm correct, there aren't any other players on the market which implement the AAC coded. All music downloaded from iTMS is in AAC, so it seems obvious that no other players can play it save the iPod. Wait until some companies implement AAC support in their devices, somebody will hack a way to get music on them.

Andrew Murray
Friday, November 07, 2003

Wow, a whole third of my cd collection indeed is from big five companies. At least I think so -- I mean these 'independent' labels like Rounder, Caroline,  etc are really independent, right.

What if a big five only 'distributes' the cd and the publisher is someone else -- like Peter Gabriel's Real World label is 'distributed' by Virgin. Does Virgin own Gabriel? Is he jsut their shill or is it really his label that he controls and thus 'out' of the Big Five?

Dennis Atkins
Friday, November 07, 2003

I remember seeing the breakdown of the .99 was something like 20 cents to Apple. So this doesn't mean that Apple is losing money "per song", it's just that it's not a point where all the networking, hardware and software costs are being covered by sales. Isn't what Apple is doing like Amazon, B&N and Borders trying to achieve profitability in the online bookseller space? Also, it's not like traditional music stores (or even chains) make that much money at least now.

Walter Rumsby
Friday, November 07, 2003

who actually makes the money in the music business? puff daddy and his lawyer? it seems like the margins are razor thin at every step in the chain, whether the music is distributed digitally or through a shop.

rz
Saturday, November 08, 2003

Check out the Capitol Records building when you're in LA.

The money goes to the record producers. A handful of "superstar" acts get wads of money thrown at them now and then, but that's a bell curve that burns out quickly (either they end their fifteen minutes or else they're successful enough to start their own label)

Philo

Philo
Saturday, November 08, 2003

I've read the same report in a number of places and one of them (but I can't remember where) said that the actual transcript emphasises that iTMS just breaks even and apple makes money on iPod sales - the competition are price competitive with iTMS and are unlikely to make as much money on downloads or on hardware sales (as the other players are lower margin devices); therefore the competition need to find revenue from elsewhere or will go under. 

Zealot
Saturday, November 08, 2003

I'd be guessing the store is running on Apple hardware/software (e.g. rack-mounted G4s, OS X, etc) so Apple's hardware/software costs have to be less than their competitors.

Of course once you source the hardware/software it's a sunk cost. And economies of scale aren't what they are in the "physical" world when you're dealing with streaming/downloading bits - i.e. costs don't necessarily shrink.

Walter Rumsby
Saturday, November 08, 2003

This is a transcript of Courtney Love's speech to the Digital Hollywood online entertainment conference, given in New York on May 16, 2000.

http://www.cdbaby.net/articles/courtney_love.html

interesting to see where the money goes...

ko
Monday, November 10, 2003

For what it's worth, I believe Jobs is trying to talk down the competition's stock prices.  He wants everyone to think only Apple has a chance to make money off digital music, so that everyone trying to make a "digital music play" buys AAPL and not, say, MusicMatch.

Jim Rankin
Monday, November 10, 2003

Firstly, Jobs is mostly posturing. Since his is the company with the best hardware + software solution, it makes sense to belittle the competitors without such.

Secondly, with $100's of millions of sales next year, you can bet that iTMS will be making a *lot* of money.

Third, I would expect Apple to license the DRM to other hardware/software manufacturers as appropriate. Not Windows-style. More like Palm- or Tivo-style.

pb
Monday, November 10, 2003

Just like they will license the Mac OS to other hardware makers...

pdq
Monday, November 10, 2003

Just a quick question.  I have downloaded Itunes for Windows XP and am in the process of putting my CD collection onto it, which I'll then send to my Ipod.  Now the problem:  I only have 10GB of space on my hard drive, so I'm intending to save 10GB's worth of CDs,  send them to my Ipod (its a 40GB so no space worries there), delete them off my hard drive, then start again with the next batch.  Only from what I can make out, Itunes deletes any songs off the Ipod which arn't arnt in Itunes library everytime I hook it up to my PC.  Is this true?  In which case I'd loose all my previous songs each time I connect!  Help!!!!!!!!!    Any help or guidance on how I can avoid this would be greatfully received.  Many thanks

Haydn Pearson
Tuesday, March 16, 2004

how do you put songs from limewire onto itunes?

josh
Tuesday, May 18, 2004

i dont know!

fucknuts
Wednesday, June 30, 2004

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