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MacBytes
May 17, 2005, 07:34 AM
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Category: Opinion/Interviews
Link: Analyst sees stark future for iTunes (http://www.macbytes.com/link.php?sid=20050517083442)

Posted on MacBytes.com (http://www.macbytes.com)
Approved by Mudbug

iGary
May 17, 2005, 07:39 AM
All credibility lost right here:

"Downloads tend to be too expensive. If you were to download 10,000 songs at 99 cents each, you are talking about a lot of money."

Read no further.

840quadra
May 17, 2005, 07:54 AM
"iTunes is positioned to increase hardware sales for Apple. Other services focus on content. Apple is about to make the same mistake that they made in the PC world. They also lost their lead they had with computers in the 70s and 80s."

Really?

I would like to see his research results showing how many iTunes donloading customers actually own an iPod. I think the customer number would be higher then all of the total iPod devices sold to date.

Though I may be wrong.

the_mole1314
May 17, 2005, 08:04 AM
All credibility lost right here:



Read no further.

Why do I have a feeling that this "market research" involved watching a Napster ad, recieveing a check, then writing the article? Nothing to bolster your stock prices that have fallen after Yahoo announced a subscription model than have so called "experts" say you'll toppel the giant....

iGary
May 17, 2005, 08:14 AM
Why do I have a feeling that this "market research" involved watching a Napster ad, recieveing a check, then writing the article? Nothing to bolster your stock prices that have fallen after Yahoo announced a subscription model than have so called "experts" say you'll toppel the giant....

Exactly.

I'll repeat again:

Apple has the player, the jukebox and the store. No one else does.

End of story.

Applespider
May 17, 2005, 08:28 AM
I would like to see his research results showing how many iTunes donloading customers actually own an iPod. I think the customer number would be higher then all of the total iPod devices sold to date.


I'm not quite so sure about that one; I know more iPod owners who haven't downloaded music from iTunes (10 in my dept at work) than non-iPod owners who have (1 - Mum who's now thinking iPod).

Tho with over 10m iPods and 400m songs sold and it being unlikely that everyone's bought 40 songs, then there must be quite a few non-iPod owners buying too.

wordmunger
May 17, 2005, 08:58 AM
I'm not quite so sure about that one; I know more iPod owners who haven't downloaded music from iTunes (10 in my dept at work) than non-iPod owners who have (1 - Mum who's now thinking iPod).

Tho with over 10m iPods and 400m songs sold and it being unlikely that everyone's bought 40 songs, then there must be quite a few non-iPod owners buying too.

I bought over 100 songs from iTMS before I finally bought an iPod shuffle a couple weeks ago.

jkhanson
May 17, 2005, 09:16 AM
can I be an analyst? Does this guy actually get paid to put out this crap?

He assumes that Apple would change nothing in response to subscription services gaining market share. Like many others, he assumes that Apple will "repeat the mistakes it made in the PC world." Apple never enjoyed anything like the market share it has with iPods. All the economies of scale favor Apple. The ecosystem of third-party products is built primarily for the iPod. That was never the case with the Mac.

Down the road, I think it is very possible that Apple will license the iPod's operating system to other manufacturers. But this will only happen when margins fall to the point where there is more profit in selling the content than the players.

This guy may not have noticed, but introducing the Shuffle, while maintaining close to 90% market share of hard-drive players, has allowed Apple to seize greater overall market share during the past few months. It's hard to say how long this can continue, but there is a war over formats right now and Apple is in a very strong position. Why cave in to Microsoft now? I have to believe that Apple is keeping very close watch on market trends and consumer preferences. They will make the move at the right time.

Besides, the future for Napster looks much bleaker with Yahoo now in the picture. How long can Napster take quarterly losses of $15-20 million? Before the new Yahoo service, they could perhaps count on market share growth to bring profitability, but that is highly in doubt at this point.

emw
May 17, 2005, 09:36 AM
All credibility lost right here:

Read no further.Yup, buying 10,000 songs on CD is a lot of money - no one would ever do that. :rolleyes:

nagromme
May 17, 2005, 10:11 AM
And not to belabor the obvious, but:

* Songs cost .99 only as singles--in which instance, they're MUCH cheaper than buying the whole CD for just one song. The average price I've paid for songs is around .70 (not counting freebies) because when you do want an album, the cost is usually less than .99/song. (And less than I can buy a physical CD for around here--convenience aside.)

* Few people NEED to fill 10,000 songs. Few people buy the really big players, and those that do often use the space for other kinds of data, or simply like the idea of the space "just in case" they someday need it.

* Even if you DO put 10,000 songs on your player, and even change them monthly, you can't listen to them all. What good does that quantity of songs loaded from Napster do you if you never hear them? If a tree falls in the woods... ?

* Imagine the labor and download time involved with finding and then obtaining 10,000 songs from Napster. Yeah, THAT'S a realistic scenario :rolleyes:

macFanDave
May 17, 2005, 10:32 AM
Martin Olausson is obviously a paid FUDster because he cannot even keep his story straight. He goes on and on about how much more expensive the iTunes model is compared to subscription models, but then he says:

He also notes that major record companies are "dissatisfied" with the revenue they receive from download sales.

OK. If they are dissatisfied with the revenue generated from download sales, how are they going be satisfied with the (much smaller) revenue generated by subscriptions? The FUD is caught in its own lies.

If revenue is the driving factor for the continuing participation of the major record companies, the obvious future is to not allow their wares to be distributed by the supposedly cheaper subscription model but to go exclusively with the fair download-and-own iTunes model.

SiliconAddict
May 17, 2005, 10:41 AM
All credibility lost right here:
Read no further.



Credibility regained here:

In fact, Milunovich earlier this week claimed that Apple could "flick the switch" and turn on a subscription service if they felt it necessary.

Bolded for emphasis. Tell me what possible incentive does Apple have to go to a subscription model if they are sitting at 70% online music sales, 90% hard drive based music player, and not having their sales nibbled at by subscriptions. I personally doubt they would be making more money off of a subscription based system then an outright purchase. Idiots. This is more Apple trashing because its trendy.

iGary
May 17, 2005, 10:45 AM
Credibility regained here:



Bolded for emphasis. Tell me what possible incentive does Apple have to go to a subscription model if they are sitting at 70% online music sales, 90% hard drive based music player, and not having their sales nibbled at by subscriptions. I personally doubt they would be making more money off of a subscription based system then an outright purchase. Idiots. This is more Apple trashing because its trendy.

I bet this guy doesn't own, nor does his company own, a single share of Apple, either.

SiliconAddict
May 17, 2005, 10:45 AM
Really?

I would like to see his research results showing how many iTunes donloading customers actually own an iPod. I think the customer number would be higher then all of the total iPod devices sold to date.

Though I may be wrong.


Well to be fair go to www.quicktime.com and look at the download for quicktime for Windows. You can't download just quicktime anymore. The only option is Quicktime WITH iTunes which I think is BS on Apple's part.

mklos
May 17, 2005, 11:05 AM
Well to be fair go to www.quicktime.com and look at the download for quicktime for Windows. You can't download just quicktime anymore. The only option is Quicktime WITH iTunes which I think is BS on Apple's part.

Yes, but you have the option to install either or. Apple did this to make it easier for noobies. You need to have QuickTime installed in order to use iTunes.

iMeowbot
May 17, 2005, 11:08 AM
Well to be fair go to www.quicktime.com and look at the download for quicktime for Windows. You can't download just quicktime anymore. The only option is Quicktime WITH iTunes which I think is BS on Apple's part.

They still have it separate for Win98. Is that actually a different build of QuickTime, or did they simply not bother to mention the NT family?

coolfactor
May 17, 2005, 11:18 AM
Well to be fair go to www.quicktime.com and look at the download for quicktime for Windows. You can't download just quicktime anymore. The only option is Quicktime WITH iTunes which I think is BS on Apple's part.

Take a 'nother look hoobie...

http://www.apple.com/quicktime/download/win.html

They label the QuickTime-only option for Win 98/ME because iTunes doesn't work with those versions, but the QuickTime is the same.

Fender2112
May 17, 2005, 11:48 AM
Credibility regained here:



Bolded for emphasis. Tell me what possible incentive does Apple have to go to a subscription model if they are sitting at 70% online music sales, 90% hard drive based music player, and not having their sales nibbled at by subscriptions. I personally doubt they would be making more money off of a subscription based system then an outright purchase. Idiots. This is more Apple trashing because its trendy.

Incentive? The other 30% :D

asif786
May 17, 2005, 11:48 AM
i must say, i love the new apple quicktime site design!

back on topic, i love downloading from itunes. there's a number of reasons why i do so:

i) in london a cd-single is 2.99-3.99. i find this a high price to pay when you only want one song..

ii) it's so convenient - i hear a song a like and i just search and buy. i can have the song found and downloaded within 15 seconds if i want. that's luxury.

iii) it's supporting apple. i would rather buy this song from apple instead of hmv. it's great to see the numbers and know that you contributed..

iv) i dont care much about quality. as long as it sounds decent, i'm happy. it's certainly better than some of the terrible encoding some other services give (except allofmp3).

the one thing i dont like is the fact that i cant listen to my music using itunes sharing (without authorization first). this kind of annoys me, but there's always ways around that if you can be bothered.

overall, i think itunes is great. i'm not much of a money saver, but there's no way i'm going to pay the recording industry 4 for a cd single.

and lastly, cd's make clutter. and i *hate* clutter. so there. :)

Fender2112
May 17, 2005, 11:54 AM
Well to be fair go to www.quicktime.com and look at the download for quicktime for Windows. You can't download just quicktime anymore. The only option is Quicktime WITH iTunes which I think is BS on Apple's part.

I was also a bit troubled about this. I can understand bundling QT when you download iTunes. But if all I want is QT i should not have to download iTunes to get it.

The only thing I can figure is that Apple is pushing Quicktime the same way MS pushes WMA by bundling it with other stuff.

cwtnospam
May 17, 2005, 11:57 AM
I can't believe the number of "analayts" who miss this point. They say on the one hand that paying 0.99/song is too costly, but on the other the record companies like the greater income from subscription services! The record companies know the truth: the subscription model costs the consumer more money, which allows them to make more money.

It's a zero sum game, so the model most preferred by the recording industry is the one consumers should avoid.
;)

NOV
May 17, 2005, 12:07 PM
The only benefit I see from other services is the fact they sell through a 'normal' website and not through a specialized application like iTunes. It's not a big thing but it may be a treshold in attracting potential new customers.

Fender2112
May 17, 2005, 12:11 PM
I have a feeling that in a year or two when things settle, there will a mix of paid and subscription services. These are two different models which allow customers to have a choice. It's not much different from the video business where rentals and purchases coexist.

I think Apple will offer subscriptions before the end of the year. Log in to iTunes and take your pick. Rent songs or buy the ones you like. Want a video? Click here to view on demand for 24 hours. Or click here to download a burnable copy.

It's coming, just a matter of time.

NOV
May 17, 2005, 12:16 PM
does a subscription service allows you to burn cd('s) from your rented stuff?

Fender2112
May 17, 2005, 12:17 PM
The only benefit I see from other services is the fact they sell through a 'normal' website and not through a specialized application like iTunes. It's not a big thing but it may be a treshold in attracting potential new customers.

I don't view this as a benefit. The user is at the mercy of compatibilty between the web site and web browser.

asif786
May 17, 2005, 12:22 PM
does a subscription service allows you to burn cd('s) from your rented stuff?

you pay extra to burn onto cd's. i think the uk napster charge something crazy like 1.9 to burn a song to cd (but don't quote me on that)

looklost
May 17, 2005, 12:23 PM
Really?

I would like to see his research results showing how many iTunes donloading customers actually own an iPod. I think the customer number would be higher then all of the total iPod devices sold to date.

Though I may be wrong.

Well I'm one of those people who buy music from itunes but don't own an ipod, and have no future plans to buy one either. In fact I know 4 others who purchase their music from itunes but don't own ipods.
I don't think Apple will jump over to subscription even if they lose some of the market, instead I expect them to offer more service and products to complement the ownership of music, like videos, pdf booklets, ect. If you copy a CD into your itunes library you can click the arrow next to the artist's name and go to the itunes music store to view more music from that artist to purchase. Things like these will help Apple from having to entering the cut-rate pricing of subscription music.

jdechko
May 17, 2005, 01:57 PM
If you copy a CD into your itunes library you can click the arrow next to the artist's name and go to the itunes music store to view more music from that artist to purchase.

Im not sure what you were saying with this statement, but you can already do that in iTunes. On the general preferences tab, there is a checkbox for "Show Links(->) to Music Store".

If you already knew that, then I apologize, but if you didnt, now you know...

skwoytek
May 17, 2005, 02:35 PM
I thought this 10,000 songs at $.99 / Rent vs Buy had been put to rest. Haven't we all done the math (http://www.palmerdeville.com)?

shamino
May 17, 2005, 03:11 PM
Yeah, right. 10,000 songs at $0.99 each is $9,900. This is obvious.

But now let's compre it against buying 10,000 songs on CD singles. These typically cost $3-5 each, so that would cost $30,000-$50,000. So why doesn't the media tell the world that CD singles are a stupid idea?

How about buying 10,000 songs on CD albums. At 8-12 songs per album and $8-18 per album, those 10,000 songs will cost $6,666-$22,500. So why doesn't the media tell the world that CD albums are a stupid idea?

Phone companies charge $3-5 per song for 30-second excerpts (sold as ring-tones). This is even worse than CD singles. So why doesn't the media tell the world that downloadable ring-tones are a stupid idea?

Notice how they only call something stupid when it's coming from Apple. Notice how they are perfectly happy with much worse deals when those deals come from record companies, or phone companies. Notice how they say nothing about music-purchasing from the Microsoft-stores (like WalMart and others) when their prices are often higher than Apple's?

iGary
May 17, 2005, 03:25 PM
When Napster, Yahoo, MS or Real have a player, jukebox and store worth anything, let's talk.

Until then...all these "journalists" need to...

**** :D

Fender2112
May 17, 2005, 04:44 PM
Notice how they only call something stupid when it's coming from Apple. Notice how they are perfectly happy with much worse deals when those deals come from record companies, or phone companies. Notice how they say nothing about music-purchasing from the Microsoft-stores (like WalMart and others) when their prices are often higher than Apple's?

Keep in mind that these people are used to Windows and Microsoft. :D

Fender2112
May 17, 2005, 04:47 PM
When Napster, Yahoo, MS or Real have a player, jukebox and store worth anything, let's talk.

Until then...all these "journalists" need to...

**** :D

I'm going to agree on this. Until someone else offers a total integrated package, iTune + ITMS + iPod, there really is nothing to compare or talk about.

macnulty
May 17, 2005, 08:50 PM
"Olausson believes that Apple's mistake is tying iTunes to the iPod."

Come again?

840quadra
May 17, 2005, 09:12 PM
Well to be fair go to www.quicktime.com and look at the download for quicktime for Windows. You can't download just quicktime anymore. The only option is Quicktime WITH iTunes which I think is BS on Apple's part.

Good point,

But I believe part of that is because of the new video integration into Itunes for some of the available music videos on the Itunes Music store. I am sure people would be equally disappointed finding out that they needed to download and install a program later, just to watch the music video that came with the album they just purchased on the music store.

But Apple may have other reasons.

Fender2112
May 17, 2005, 10:38 PM
Good point,

But I believe part of that is because of the new video integration into Itunes for some of the available music videos on the Itunes Music store. I am sure people would be equally disappointed finding out that they needed to download and install a program later, just to watch the music video that came with the album they just purchased on the music store.

But Apple may have other reasons.

The gripe here is that you can't download JUST Quicktime for XP. It it bundled with iTunes. I needed to update Quicktime on my XP box a week or so ago. When I clicked the download button, iTunes began to download. I thought I clicked the wrong button by mistake. But didn't. I don't really care to have iTunes on my XP machine at work (I have other ways to kill time :D ). But I needed Quicktime and as a result I was forced to update iTunes.

Apple's motives here are quite questionable. It's seems more like something Microsoft would do.

solvs
May 18, 2005, 12:31 AM
Well to be fair go to www.quicktime.com and look at the download for quicktime for Windows. You can't download just quicktime anymore. The only option is Quicktime WITH iTunes which I think is BS on Apple's part.
Ugh, you're right. I used to get it here:

http://www.apple.com/quicktime/download/standalone/

Maybe it will come back for version 7. I hope. Not exactly as bad as M$, but certainly along the lines of Real. You know, there's a thing called QuickTime alternative for Windows right? Works pretty well actually.

Happy with iTunes, but I don't like forced bundling.

billyboy
May 18, 2005, 05:41 AM
Yes I am having my doubts about Apple's direction right now regarding Quicktime and iTunes. We all know Quicktime is free, so imagine my horror when a Windows mate emails me and says he isnt going to install QT for $29 just to watch my video download. If you dont go to the right page, it isnt at all obvious that Apple supply a version of QT free, for every Windows system from 3.1 A bit sort of RealPlayerish if you ask me.

And re iTunes, as someone said, if you are in the driving seat like apple, whatever anyone else comes out that sounds good, Apple just add it in to their service. Copying is a luxury afforded the first or fastest out the blocks!

coolfactor
May 18, 2005, 07:41 AM
The gripe here is that you can't download JUST Quicktime for XP. It it bundled with iTunes.

No, no, no... QuickTime 6.5 is the same for XP as it is for 98 and ME... they just don't make that very clear cuz they want as many people as possible to download iTunes. It's a bit deceptive, but the standalone QuickTime is there as the second option.

coolfactor
May 18, 2005, 07:43 AM
Yes I am having my doubts about Apple's direction right now regarding Quicktime and iTunes. We all know Quicktime is free, so imagine my horror when a Windows mate emails me and says he isnt going to install QT for $29 just to watch my video download. If you dont go to the right page, it isnt at all obvious that Apple supply a version of QT free, for every Windows system from 3.1 A bit sort of RealPlayerish if you ask me.

And re iTunes, as someone said, if you are in the driving seat like apple, whatever anyone else comes out that sounds good, Apple just add it in to their service. Copying is a luxury afforded the first or fastest out the blocks!

I disagree. Apple isn't making it difficult.... the page is split down the middle... the Free version on the left, clearly labelled, and the Pro upgrade details on the right. Nothing like Real's site, which is very confusing.

killmoms
May 18, 2005, 09:14 AM
does a subscription service allows you to burn cd('s) from your rented stuff?
I'd imagine not... then you could just get as much stuff as you wanted, burn CDs, and cancel service (within time constraints, of course). They might though, on the premise that the quality is reduced such that ripping it again would sound pretty crap. However, given the RIAA's current paranoia, I'd say that's unlikely. You'd probably have to buy the songs/album as per usual in order to burn.

iJaz
May 19, 2005, 06:00 AM
does a subscription service allows you to burn cd('s) from your rented stuff?
Nope, for that you have to buy the songs.

macnulty
May 19, 2005, 08:15 PM
How could anyone compare Apple/Quicktime with Real. That's just unreal.
:D