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Record, tech industries struggle to earn profit

updated 11:55 pm EST, Fri November 14, 2003

\'Net music sales struggle

As paid music sites from Rhapsody to Napster reinvent themselves in time for the holidays, , reports CBS MarketWatch. "The music industry's failure at selling its products online and the continued availability of songs through illegal file-sharing have led analysts to cut projected sales of online music in 2006 to $1.4 billion -- a quarter of their estimate two years ago." Even the biggest success in online-music sales -- Apple's ITunes -- is "basically a loss leader meant to drive sales of IPod portable music players," the article says, to paraphrase Apple Chief Executive Steve Jobs.




by MacNN Staff

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  1. MacNN.com Reader

    Joined: Dec 1969

    0

    ummm

    I don't think the author of the article gets the point. iTMS is a loss-leader for Apple because Apple only gets $.10 on the dollar for stuff sold there. That does not mean it loses money for the music industry as well.

    Considering that the music industry pays essentially nothing for the songs to be put on iTMS, I would say they are making a fairly nice profit on it.

    Just more junk journalism

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    Also...

    There's never going to be money made since RIAA's fees are so high.

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    re: Also...

    "There's never going to be money made since RIAA's fees are so high."

    Huh?? Are you saying that the record companies are never going to make money because the recording industry fees are too high? Or are you saying that Apple will never make money because of the fees?

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    Re: ummm

    You said everything I was thinking. I hate distorted story. In the first part of the sentence they talk about record company's profit, on the second part of the sentence they switch to Apple's profit just to support their proposition.

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    iTunes breaks even...

    ...ipods break records (guiness, not music).

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    I thought it was good ...

    Especially when you do the math like they did and see how many songs have to be downloaded before you get to $1 billion per year. I doubt very much that this big rush of everybody and their dog to have a paid music download service is going to last. I predict that in a year there will only be 2 or 3 music download services left. Apple will be left for sure, since this effort supports their sale of iPods (which are making a big wad of cash for Apple). Microsoft is starting a service, and they are likely to stay in, as they have very deep pockets, and they could make money if their technology shows up in other people's players (including Windows Media Files ....). I doubt WallMart's service will be successful. They are the experts in loss leaders, but how they will link online downloads to other purchases which generate profit, I have no idea. Roxio and the others are going to lose a bunch of money and then get out. That's my 2 cents!
    Cheers!

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    Who will dominate evt?

    So Apple pioneers. The music industry takes over because that's where most of your .99$ go and where the rights are. 'Till that point I hope Apple will have sold enough iPods and AAC format music so that we will keep apple support (and format) in the future. Or could it be that AAC really becomes the universal format for music download?

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    I'm so sick of the

    Asinine manner in which the "cost of piracy" is calculated. If every one of the downloaded P2P songs equated to one song not sold by the record companies then it might make sense. However, there is no way of knowing whether or not "pirates" would have or will purchase legit music on a one to one basis (not likely). It's a fallacy of association and amateurish.
    There is no doubt an association between P2P and failing record sales but the RIAA's "model" is doubtful. More FUD.

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    31%

    I read somewhere that the music industry's profit has dropped 31% since it first started wining about napster all those years ago. I don't think piracy has done them in, I think that they are just trying to cover up cause they haven't produced much good music since then. LOL, just a personal opinion.

  1. MacNN.com Reader

    Joined: Dec 1969

    0

    Hey now

    What exactly is ITunes, or IPod? Do you mean to say iTunes and iPod. Let's get it straight. Capitalizing the "i" makes you look like a Wintel troll.

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