Macworld Forums

Watch out Apple, the arch enemy Napster has just announced an increase in revenue from $14 mill to $15 mill in just one quarter, thats a whopping 7% increase. Granted its an increase, but I think Apple's increase is what, 50%, 100% or more, I forget the figures. But I know they're real BIG. I would love see what the increase Apple will state, after the sales of the new iPod Shuffle and new iPods, come in next quarter. A bit more than 7% me thinks. I don't know how many countries Napster are in, or what Creative is doing, both seem to be bit players, but at least Creative are advertising. I wonder if people decide to buy a Creative player, but when they see the iPod range they buy an iPod instead, is Creatives advertising actually helping Apple? Oh the irony.

JohnZel,
wow, napsters total anuel revenu will almoast make up half of their marketing spending. sounds like a good solid foundation for a business to me. (also cant forget that moast of this money will go to the record industry)

JohnZel,

businesses need profit, not just revenue.

sonicthe100,

as I understand it, the record industry doesn't get all that much from Napster.

Napster are trading as if they were a digital radio broadcaster and using the same payments model.

They don't pay anything like as much to the record industry as iTMS do.

However I haven't seen any figures that reveal just how much is paid. If anybody knows, I'd love to hear.

I can't imagine the labels being remotely happy about that situation and it's another reason why I feel that Napster's business model is fundamentally flawed and can't flourish.

AlanAudio,
I would imagine that a large part of the attraction for the record industry is the detailed information about peoples listening habits they can get from it. sadly allowing them to target precisely the most popular music, and bombard the marked with even more with generic clones, sorry I mean ‘innovative new bands’ and reducing the money spent even more on anything even slightly different, that might be a risk to them

sonicthe100,

do they ignore the feedback from iTMS sales then ?

AlanAudio,
true,

they would with napster get complete detailes of peoples listning habets. but you do have a point

AlanAudio,
true,

they would with napster get complete detailes of peoples listning habets. but you do have a point

it did strike me as a bit odd though if they are only getting only small amount of the $15, considering they apparently are trying to charge even more for downloads (an entiire album online is already not that much less than a bought cd) there must be some attraction for them with the subscription

sonicthe100,

iTunes and the iPod do know exactly what you've been listening to and how many times. If you rate songs with preferences, they also know that too.

As far as I know, that information remains private and people might object if it were collected by Apple and passed on to a record company.

However, what if Apple offered to pass on your listening habits anonymously, but offer a sweetener in return ? Maybe some free downloads or special low prices. It would have to be an 'opt-in' arrangement, so that you have to explicitly choose it, otherwise things continue as at the moment.

They could sell some valuable marketing info and offer something to users for allowing them to do that.

AlanAudio,

I sort of stopped beeing so beholden to the most played songs after I muted iTunes (and then hid it, I think).

It played 'New Gold Dream' by Simple Minds continuously for 24 hours......

Now I hide my most played Smartlist.....

sonicthe100 said "…it did strike me as a bit odd though if they are only getting only small amount of the $15, considering they apparently are trying to charge even more for downloads…"

But this brings us back to the first point.

iTMS is making money, Napster isn't. The Labels can't realistically hike up their fees on a service that loses twice as much money as it earns. Therefore the only option is to try and get more money out of Apple. However if Napster ever made money, things would surely change.

However, although few would doubt the record companies wish to do that, Apple did say that they have a multi-year fixed-price contract with the Labels and the report in the FT claiming that they want a bigger share of the cash still hasn't been backed up by other sources that I'm aware of, so I file that story in the same bin as the similar story last spring.

It seems to me that the record labels would be much happier if there was a viable alternative to iTMS. All the time that Apple has a dominant position with regard to music downloads, there will be a reduction in the power of the Labels and less need for them to exist. It's very much in the interests of the Labels to divide and conquer, but it must be very frustrating for them to discover that alternatives aren't materialising in a sustainable form.

It can only be a matter of time before a new label starts up, either directly under Apple, or partnered with Apple, to sign up bands directly and market their products primarily on-line. The potential for reducing expense and eliminating middle men is enormous. Any artists who isn't locked into an existing record deal stands to do very well from an arrangement of that sort.

AlanAudio,

"It can only be a matter of time before a new label starts up, either directly under Apple, or partnered with Apple"

There were all those rumours last year of a pretty big settlement with Apple music that involved McCartney joining the Apple board. It would be interesting if they came up with some kind of "innovative" settlement that basically ended up with Apple buying Apple, and getting a pretty big music figurehead along with it.

JP.

Apple Certified System Administrator

J.P.,

I'd be very surprised if Apple weren't actively pursuing some sort of deal like that.

Clearly getting both Apple's together would be a really great solution. McCartney certainly doesn't need the money, but I could imagine him being very keen on an arrangement like that becoming a way to encourage new talent and take away some of the less attractive aspects of the music business. It would certainly complement his vision of the music academy. Equally, getting access to the Beatles back catalogue would also be a great prize for iTMS in terms of kudos, but I have my doubts about just how much financial value there would be in it ( and that's speaking as a Beatles fan ).

However, even without the musical Apple company, Apple Computers could still do something like that, but would probably have to do it at arm's length so as not to totally fly in the face of that disputed Apple Corps agreement.

I wouldn't hold your breath about such ideas, especially when you consider Apple [the Beatles one]'s appalling track record when it comes to new music, and Apple [the iTMS one]'s pretty dismal record when it comes to independent labels and artists. Things are gradually improving, but it's a long, slow and painful process. The two people I know that run record labels have been pretty much ignored and treated like s—— by Apple, and therefore are hardly jumping at the idea of working with the company. (And one of those labels is fairly big for an indie.) I myself decided to see what would happen if I asked Apple for details about placing my music on the store. Because I'm a solo artist, I thought the six-month wait for a response was down to that. According to the label bosses, it really isn't. It would surprise me for more to take Warp's route and launch their own service instead.

Just to add my experience, which kind of agrees with what Craig said.

I have a 40gb iPod that's almost full but so far only 3 albums are from ITMS. There are a couple of reasons for this but primarily it's the fact that they don't list anything I like!

My music tastes are quite diverse (even extreme) but ITMS only seems to offer stuff thats already popular, mainstream and 'safe'

If only they'd start to embrace the smaller independent labels I'm certain that their userbase and sales would increase massively.

Secondly the price of Album downloads is pretty similar to the price of other online traders for the 'real' CD. So I'd rather wait a day or two and get something tangible to hold and read while I'm importing it to my iTunes library