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http://www.macnn.com/articles/03/06/06/apple.talks/

Apple talks to independent lables about music

updated 11:10 am EDT, Fri June 6, 2003

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Derek Sivers, President of CD Baby and Hostbaby, has posted , which took place last night: "There are 6-7 million copies of iTunes in use; there have been 3.5 million songs sold so far; Apple is selling about 500,000 songs a week now; More than 75% of songs have sold at least once; 45% of all songs have been bought as an album....Big labels don't get preferential treatment....'Everyone is going to get the exact same deal. It's not negotiable. It's take it or leave it.'...a special Music Store Encoder tool for Mac OS X will be released in 90 days or so."

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06/06, 11:18am | report spam | close Reply |
Honk

Indie Indie Indie

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06/06, 11:21am | report spam | close Reply |
2nd POST, BOOH YEAH!!!

This is good untill the competition gets off the ground, then the labels will take their catalogues to whomever offers up the best deal. We might cry about indie this and that, but it's top 40 that makes the money. Apple will eventually have to offer the bigger players better deals.

- the "BOOH YEAH" guy.

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06/06, 11:24am | report spam | close Reply |
Apple's cash

They have $4.1 Billion, not $41 Billion.

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06/06, 11:31am | report spam | close Reply |
10 previews/purchase?

* 10 previews (free 30 second listen) for every purchase. Meaning: 10 listens per buy.

???? Did I miss something here?

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06/06, 11:33am | report spam | close Reply |
7 million

500,000 songs a week isn't all that great considering...

500,000 + .30 (amount of profit per song IF THEY BUY SINGLE SONGS) - 150,000 a week... That's a little over seven million a year...

Actually, that's not bad considering it's something new... Give it time... and a NICE Windows port...

I smell profits...

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06/06, 11:33am | report spam | close Reply |
previews...

If I'm interpreting that correctly, that means people are listening to 10 song previews for every one track they buy.

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06/06, 11:35am | report spam | close Reply |
6th post Yah...

The labels will go will all of them... they aren't going to give one more/better songs then the next... As long as they are making money... they will be happy... (considering the alternative is pirating the songs)

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06/06, 11:40am | report spam | close Reply |
Re: previews...

I haven't even bought a single song yet (I'm from Europe) but I have been able to preview all songs I wanted so far. My guess is that guy at CD Baby must have misunderstood that part.

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06/06, 11:58am | report spam | close Reply |
...

I haven't bought any yet, because I'm no 18, so these idiots won't give me a credit card :).

I would be really happy however if alot of the independants got on the bandwagon, and I think they will...

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06/06, 12:25pm | report spam | close Reply |
Proofread?

Lables or labels?

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06/06, 12:38pm | report spam | close Reply |
1st POST PG2! BOOH YEAH!!

for now, this is only US mac users, so double that for world wide mac users, and roughly quadruple it when a windows port is added. Yes there are more like 20X the windows users, but actually paying customers will probably be about 4X, just like the increase in iPod sales, mebbe a squish more.

Once competition arrives the big labels will demand and get better deals.

-the 'BOOH YEAH' guy

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06/06, 12:45pm | report spam | close Reply |
7 mill, count different!

Apple receives 34 cents of each 99 cent song sold. Slightly OVER 1/3 goes to Apple. Apple pays a HUGE amount for servers, bandwidth, Akamai, .Mac, webmail, Homepage, etc. However; Since Apple already set up all servers for .mac - and since 60% of email is SPAM - it costs Apple a lot, hence charging for .mac......

If you want to see what Apple can earn in Music sales, try using the 34 cent profit ( sometimes more ) the rest goes to the labels, and distributed to artists ( Far better than $16.99 CD where 80 cents goes to artists! 4.7%)

At a sales rate of 500k sales per week, that is 62,050,000.00 (62 Million a year!) This seems reasonable even though sales may drop, and alternately spike a LOT when the Windows version ships ( &/or say 50% of Mac users actually USE OS X -so they can use iTunes 4 - Now about 12% are OS X users....which is remarkable for iTunes sales!)

This is why Apple's stock price went up about 40% on release of this service.......a formerly break even Quarter, in a tough economy, with poor CPU speeds, would now be a most profitable Quarter ever....and a good Q would be a series of new records......
Wait until they drop the x86 version of OS X, which dynamically recompiles PPC code and runs all Mac Apps without any recompiling, on any PC........whoa!

Just my .02 cents
Armas

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06/06, 12:51pm | report spam | close Reply |
uhhh no

check your math, with a half mill per week, times 52 weeks, Apple will gross 26 million TOTAL at this pace, they'll get a 3rd of that. Not as profitable as you think.

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06/06, 12:51pm | report spam | close Reply |
re: previews

He's talking about marketing - for every song bought 10 others are previewed. This is exposure on a rather large scale. Basically, one person listens to a bunch of previews and buys a few songs that they really like. Then their friend asks them about this song they heard on the radio and the friend knows what track it is and directs the other friend to the store. More Listens == More Sales!

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06/06, 01:17pm | report spam | close Reply |
Re: previews

> Lables or labels?

I agree 100%

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06/06, 01:27pm | report spam | close Reply |
to the shortsighted

apple is selling this many to

only mac users (3-5% of market)
only those with OSX (prob. half that market)
only those in america (prob. half those)

now when they ship the windows version AND go international will those shortsight folk on this board be a _little_ more impressed?

start slow.
hone the system.
release windows itunes.
get big.

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06/06, 02:05pm | report spam | close Reply |
How dumb is...

the President on CD Baby. A message has now been posted on their website stating that Apple legal has ordered them to take down the page. His excuse is that he thought it was all a "joke." Yeah right! Sure, Apple and any other company goes around talking deals and wants them to leak out over the net before they are finished. That's standard practice. (Since you can't hear the tone of my voice, I am being sarcastic btw.)

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06/06, 02:09pm | report spam | close Reply |
RE: credit card

Hey... to the "I'm 18 and can't get a credit card" loser... get a freakin job, open a checking account, and get a debit card. They can act as Visa cards, you ignoramus. And then, give Apple all your freaking money. Do it NOW!

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06/06, 02:19pm | report spam | close Reply |
Sorry - took details down

Sorry - I took the details down from that page.

It wasn't wrath or lawyers that asked me to pull it. It was a friend of mine that works there.

I sincerely didn't know yesterday's presentation was supposed to be confidential. In fact I thought it was like an indie-music press conference.

Nobody's mad, though. Honest mistake.

Sorry guys!

--
Derek Sivers, CD Baby
http://www.cdbaby.com

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06/06, 02:35pm | report spam | close Reply |
Oy...hope you aren't

...in TOO much hot water...

Did you sign an NDA, or was it just "understood" that you were supposed to keep quiet?

Hopefully the powers that be will be merciful. It sounds like you're really geeked about this, would hate to see you lose your partnership deal (or whatever) over it.

Besides, I just checked and you carry a waykewl group fronted by the sister of a good friend of mine--Ms.Led (aka Lesliwood) (the name of the band, not my friend lol..)

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06/06, 02:54pm | report spam | close Reply |
Profit

It's not necessarily super important for the music store to make tons of money for Apple directly if it in any way pushes the sales of Macs or iPods. It does seem to be making a nice profit and that should only increase when the Windows client is released but I reckon the profit from the store will pale in comparison to the increased profit from iPods. Also, it's important to realize that, without this service, Mac users could easily be locked out of legit music music services or be treated as second class citizens. That kind of thing has been an argument against the purchase of Macs in the past and Apple really doesn't need to deal with it.

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06/06, 02:57pm | report spam | close Reply |
Re; Armas

Yeah, you may want to re-check your math. It's not 500k in profit, it 500k songs sold per week, or $170,000 per week for Apple.

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06/06, 04:35pm | report spam | close Reply |
re: ...

The iTunes Music Store happily accepts Visa or MC debit cards, dude. No credit card necessary.

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06/06, 04:44pm | report spam | close Reply |
Profit

When will you people (and Wall Street) get it through your thick skulls that this is NOT ABOUT PROFIT???

Yes, Apple gets about 33 cents off each 99 cent sale.

MINUS bandwidth
MINUS operating cost
MINUS credit card charge (yes, APPLE pays that!)
MINUS advertising
MINUS etc, etc.

Even if you look at that 33 cents as revenue rather that profit: that's still $170,000/week, or let's call it $8.8M/year.

Apple makes that much in revenue on a slow *day.*

This is not about money. It is about empowerment, it is about ancillary sales (iPods etc), it is about exposure, it is about evolution/revolution.

That it will make Apple some pocket change is *ancillary.*

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06/06, 05:22pm | report spam | close Reply |
Re: 7 mill

If you want to see what Apple can earn in Music sales, try using the 34 cent profit ( sometimes more ) the rest goes to the labels, and distributed to artists ( Far better than $16.99 CD where 80 cents goes to artists! 4.7%)

What makes you think that somehow the artists are going to get all, or even a larger chunk of that remaining 66%. They could still be given the lame 4.7%, or 2 cents (or whatever).

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06/06, 05:56pm | report spam | close Reply |
Royalties

Artists get approximately the same amount in royalties through the iTMS as they do from CD sales. Nothing's changed on that front ... YET!

However, 2 cents (or whatever it is) is better than 0 cents from illegal copying, so I don't imagine the artists will be complaining (except in the larger sense that royalties are too low overall, which I agree with)

... and perhaps the iTMS will help bring about change in that regard (as small labels with low overhead appear, who will help artists sell their music more directly to their audience). CD Baby has already indicated that it plans to use its partnership with the iTMS to do exactly that.

The revolution is underway.

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06/06, 09:48pm | report spam | close Reply |
Royalties

Actually, only artists with big labels still get the same $ per song/cd as they used to. However, independents will be getting all or most of it, and making a lot more money than the bigger labels (at least on a per song/cd basis). This will drive new artists and old to an independent status, so that they get more of the money. The only problem is going to be quality over quantity, now that the bar for entry into the marketplace is set so low.

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06/07, 09:35am | report spam | close Reply |
music store encoding tool

what i'm interested in---besides getting a better selection on iTMS---is the music store encoding tool. looking forward to that leaking out to people, as it offers better quality than what is built in to iTunes currently.

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01/22, 10:57am | report spam | close Reply |
MUSIC LABEL

HOW CAN I GOT INTO THE MUSIC GAME CAUSE I CAN SING BUT IM LOOKING FOR A GOOD LABEL NOT JUST A PLAYING ARUND THING. MY BOYFRIEND CAN MAKE GOOD MUSCI TO HIS NAME IS ARIB AND MY NAME IS BRITTANY

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Apple talks to independent lables about music

updated 11:10 am EDT, Fri June 6, 2003

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