iTunes: Windows Users Download 1 Million Songs in 3.5 Days!

Mr. Nice Guy · October 20, 2003, 14:02

http://news.com.com/2100-1046_3-5093...l?tag=nefd_top

Quote:

Apple whistles a happy 1 million iTunes
Last modified: October 20, 2003, 8:50 AM PDT

By Ina Fried
Staff Writer, CNET News.com

Apple Computer said Monday that 1 million copies of its iTunes software for Windows have been downloaded since its introduction on Thursday.

The Cupertino, Calif.-based company also said it has sold more than 1 million songs in that same time, a significant increase from the typical rate of 500,000 or 600,000 songs the company had been selling in recent weeks.

"We're off to a great start, and our competition isn't even out of the starting gates yet," Apple CEO Steve Jobs said in a statement.

Apple executives told CNET News.com on Friday that the pace of downloads has been brisk, but the company did not quantify the number of copies of the software that had been downloaded. Jobs introduced the software on Thursday at a star-studded event in San Francisco that featured a performance by Canadian singer and songwriter Sarah McLachlan.

Response to the software has been mixed, with the company garnering a lot of praise, particularly from users of the Mac version of the software who are now using it on both Macs and PCs. However, some customers--including those who use Windows 2000 Professional--have said they experienced various difficulties when running the software.

Apple said it is looking into the problems, which have caused some machines to freeze after iTunes is installed.

The Mac maker is counting on the Windows version of iTunes and the music store to help further boost sales of its iPod digital music player. Apple executives have said the company doesn't make money on the music store but that the software can be a "Trojan horse" to sell more iPods.

WAAAAAY 2 GO WINDOWS USERS, AND APPLE!!!

FlameFlash · October 20, 2003, 15:08

Now that's just plain cool.

Let's hope that all of those users actually keep the app.

laurentius · October 20, 2003, 16:58

Nice. Any information on when it comes to europe?

Mr. Nice Guy · October 20, 2003, 17:56

Quote:

Originally posted by laurentius
Nice. Any information on when it comes to europe?

Hints from Apple put the target month at May 2004.

And remember, patience is a virtue.

Asher · October 20, 2003, 18:59

The more songs people purchase, the more money Apple loses. iTunes is a loss-leader to get people to buy the iPod.

Mr. Nice Guy · October 20, 2003, 19:30

Quote:

Originally posted by Asher
The more songs people purchase, the more money Apple loses. iTunes is a loss-leader to get people to buy the iPod.

No. The iPod has 30% market share and 56% revenue share out of all MP3 player sales; couple that with the ITMS and this means

for Apple!

EDIT: Click here and scroll down to the last page (this is Apple's most recent SEC filing).

Asher · October 20, 2003, 19:59

What does that have to do with what I said?

iTunes does not generate a profit, Jobs has said this himself. He went on to say he doesn't think anyone can make a profit off of online music sales alone.

iTMS exists to drive iPod sales. Due to RIAA's extraordinary licensing fees, Apple loses money off of iTunes and off of each song sold. The idea is they'll make money back with increased iPod sales. It's like console hardware, where it's sold at a loss but game sales counter that.

Mr. Nice Guy · October 20, 2003, 20:02

Quote:

Originally posted by Asher
What does that have to do with what I said?

iTunes does not generate a profit, Jobs has said this himself. He went on to say he doesn't think anyone can make a profit off of online music sales alone.

iTMS exists to drive iPod sales. Due to RIAA's extraordinary licensing fees, Apple loses money off of iTunes and off of each song sold. The idea is they'll make money back with increased iPod sales. It's like console hardware, where it's sold at a loss but game sales counter that.

Revenue means profits.

Link please.

Asher · October 20, 2003, 20:16

Quote:

Originally posted by Mr. Nice Guy
Revenue means profits.

Quote:

Link please.

http://news.com.com/2100-1041_3-5092559.html?tag=mac.nn

Quote:

"The iPod makes money. The iTunes Music Store doesn't," Apple Senior Vice President Phil Schiller told CNET News.com in an interview Thursday after the launch of the Windows version of the store.

Schiller said the music store is close to profitability but is still losing money. Apple doesn't see the business as having much long-term profit potential either.
...
Apple has said in the past that the store was not profitable, but it has said little about the business model. Analysts have said the costs could well exceed the 99 cents per song that Apple typically gets.

Rather than trying to wring profits out of a few pennies per song, Apple said it is counting on a Windows version of its music store to help drive iPod sales higher. The company has sold about 1.5 million iPods so far, with roughly half of those being bought by Windows users, Schiller said.

Mr. Nice Guy · October 20, 2003, 20:39

Alright, something ain't right here, but let me assure you it has nothing to do with Apple, the iPod, or the ITMS.

I'll get back to you later. . .

Agathon · October 21, 2003, 00:07

Quote:

Originally posted by Asher
The more songs people purchase, the more money Apple loses. iTunes is a loss-leader to get people to buy the iPod.

This is extremely an extremely poor reading of what was actually said.

Have you not heard of economies of scale? As it stands the music store is close to breaking even. It is certainly not the case that the more people buy, the more Apple will lose. This is the sort of thing people fail first year economics papers for.

Presumably, the iTMS, which was close to proftability just serving mac customers will do better than break even if it doubles its revenues, which it is going to do pretty easily. But even if it does, it does not justify tying up so much capital for such small returns - that is, unless there are additional benefits.

Mr. Nice Guy · October 21, 2003, 00:29

Quote:

Originally posted by Agathon
. . .that is, unless there are additional benefits.

Like a much higher stock price?

Asher · October 21, 2003, 00:33

Quote:

Originally posted by Agathon
Have you not heard of economies of scale?

Yes, I've done a paper on it.

How do economies of scale come into affect with intellectual property, Agathon? Further, since Apple is charged a flat-rate per song from the record company, economies of scale mean nothing here.

Quote:

Presumably, the iTMS, which was close to proftability just serving mac customers will do better than break even if it doubles its revenues, which it is going to do pretty easily. But even if it does, it does not justify tying up so much capital for such small returns - that is, unless there are additional benefits.

Apple themselves have said they doubt it will be profitable in the long-term, who are you to disagree with them?

Mr. Nice Guy · October 21, 2003, 00:46

Quote:

Originally posted by Asher
Apple themselves have said they doubt it will be profitable in the long-term, who are you to disagree with them?

Apple themselves doubted that the ITMS would do so well. Their initial goal was to sell 1 million tunes in 6 months, yet they did that in the first week. So they set a new goal: 10 million songs in 6 months, yet they did that in just 4 months. Their latest goal is to sell 100 million songs from the day iTunes (for the Mac) was launched until one year later, which I believe is April 28, 2004. Their deals with AOL and Pepsi should undoubtedly ensure that they will exceed their goal once again.

Who are you to agree with them?

Asher · October 21, 2003, 00:50

Oh come on, don't tell me you were fooled.

It's PR to do **** like that. Set very conservative goals, then release press releases promoting it since it's selling beyond all expectations!

It's the same thing governments here do, very conservative budget and very conservative budget estimates, then every year we have a surprisingly unexpectedly enormously huge surplus, and everyone throws a party for Ralphie...

It's all PR, babe, all PR.

Mr. Nice Guy · October 21, 2003, 00:54

What's PR?

Asher · October 21, 2003, 00:59

Aw man, this forum is great.

It's like everyone here is in their own little world.

Mr. Nice Guy · October 21, 2003, 01:01

Oh, by the way, unlike Canada, we haven't seen any surpluses in the U.S. in the past few years. Economic forecasts down here have been just about right.

Asher · October 21, 2003, 01:05

/me was speaking of Alberta.

Every year we have a surplus, and every year the Government "estimates" $1B and we end up with ~$4B. It's a brilliant PR move.

laurentius · October 21, 2003, 05:38

Aw sorry to get back to on-topic guys, but I'm still impressed by the huge popularity of iTunes, makes me wonder if I should get an Ipod myself...Are all the songs in AAC format? No mp3, or wma at all?

May 2004 sounds about right time, since I wont have much money to buy iPod before that anyway

Drake Tungsten · October 21, 2003, 09:26

Quote:

Are all the songs in AAC format? No mp3, or wma at all?

Yeah, they're all in AAC. No mp3 or wma at all.

Mr. Nice Guy · October 21, 2003, 14:20

Quote:

Originally posted by laurentius
Aw sorry to get back to on-topic guys, but I'm still impressed by the huge popularity of iTunes, makes me wonder if I should get an Ipod myself...Are all the songs in AAC format? No mp3, or wma at all?

May 2004 sounds about right time, since I wont have much money to buy iPod before that anyway

Note that there is no need for an iPod to use the ITMS. You can still download any music you want and listen to it on your computer; you just can't take it with you unless you burn it as audio CDs/DVDs. But in any case, I would be sure to back up your music on data CDs/DVDs in case something happens to your data.

FlameFlash · October 21, 2003, 22:30

/me shrugs.

Heck with your opinion on how most Apple users are in their own little world, Asher (we already know your stance there). What's your honest opinion on iTunes itself? Let's not quote new sources, I'm asking for opinion here.

Asher · October 21, 2003, 22:57

iTunes on Window is bloaty, slow, and virtually uncustomizable. It's useless as far as I'm concerned.

There are 100 other players that do everything iTunes does 100 times better, and not resource hogs and performance slouches and don't lock you into a rare and obscure format Apple refuses to let others use...

Mr. Nice Guy · October 22, 2003, 02:02

Quote:

Originally posted by Asher
. . .and don't lock you into a rare and obscure format Apple refuses to let others use...

Is history repeating itself here? We already discussed this earlier. Apple DOES NOT own the AAC format, nor do they own Fairplay; instead they have licensed their commercial use of these technologies from Via Technologies and Veridisc just as other third-party companies could do the exact same thing.

Why does Apple own AAC and Fairplay if Asher says so?

Asher · October 22, 2003, 02:15

I never said Apple owns AAC.

AAC didn't come from Via Technologies, btw, it came from Dolby, Fraunhaffer, Nokia, and Sony IIRC.

But Apple's m4p isn't AAC, it's a proprietary offshoot of AAC that combines Fairplay with AAC. And even though Apple didn't develop Fairplay, Apple has an exclusive license to use it since it was developed under contract for them. Go ahead, list someone else who uses it...

So yes, history is repeating itself here -- you still haven't a clue what you're talking about.

.M4P files are proprietary to Apple and cannot be played on anything other than iTunes or iPods -- period.

FlameFlash · October 22, 2003, 10:08

And how is this different from certain Windows Media file formats?

Asher · October 22, 2003, 12:43

MS basically begs people to license it, while Apple won't let people license it.

Hence why 40+ portable audio players use WMA and 1 uses Apple's AAC variant, and how WMA-playback is a standard feature on most new DVD players alongside MP3.

I can listen to WMA in hundreds of audio player programs on my computer, and on a ton of devices. Not the case with Apple.

FlameFlash · October 22, 2003, 14:32

Interesting...

So why are iPods some of the most popular MP3 players? Don't they hold a rather large share of the personal digital music player market?

Also, what are the copy protections on WMA?

Mr. Nice Guy · October 22, 2003, 14:35

iTunes does have a feature that will convert your music to MP3 and burn it to CDs for you.