PDA

View Full Version : iTunes Music Store - 25 Million Songs


MacRumors
Dec 15, 2003, 09:59 AM
Apple announced (http://www.apple.com/pr/library/2003/dec/15itunes.html) that the iTunes Music Store has now sold over 25 million songs since its launch in April 2003.

The 25 millionth song -- which was purchased on Friday afternoon was Let it Snow! Let it Snow! Let it Snow! (http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewAlbum?playlistId=899161&selectedItemId=1219229) by Frank Sinatra.

Apple also released that over $1 million in iTunes online gift certificates and allowances have been purchased since their addition on October 16th, 2003.

kwajo.com
Dec 15, 2003, 10:02 AM
yippie!

iMax531
Dec 15, 2003, 10:03 AM
It also says they're on track for 75 million... which is a few les than the 100 million that Jobs was shooting for... so something's gotta kick into gear soon. Hopefully the Pepsi deal will help. It;s a good start though

bommai
Dec 15, 2003, 10:07 AM
I thought they just crossed the 20 million line. Good to see them go to 25 million. Just keep it up now.

Java
Dec 15, 2003, 10:08 AM
Sounds good to me.

Websnapx2
Dec 15, 2003, 10:09 AM
I wonder if they are counting the Gift certificates as well in the 25 Million?

Viv
Dec 15, 2003, 10:10 AM
Still not slowing down then! I bet the others hate it:-)

Viv
PS so who voted negative? why!

whooleytoo
Dec 15, 2003, 10:11 AM
The 25 millionth song -- which was purchased on Friday afternoon was Let it Snow! Let it Snow! Let it Snow! by Frank Sinatra.

Frank Sinatra bought it? What are the the odds??? :D

yoman
Dec 15, 2003, 10:11 AM
woot

wPod
Dec 15, 2003, 10:12 AM
iTunes ROCKS!!! But I think we already knew this. What about other services? Does anyone know if they have been keeping up, or have been behind as normal?

JW Pepper
Dec 15, 2003, 10:15 AM
Apple must be close to their break even point now. I do not believe that this will be an on-gong non-contributor to revenues. Anything this sucessfull must be able to make a profit.

ryme4reson
Dec 15, 2003, 10:15 AM
Great news, I changed from one click shopping to the shopping cart because I found myself helping out Apple a little to often!

TMay
Dec 15, 2003, 10:18 AM
It would be nice to know what the split between mac and pc buyers, singles and albums, and weekly rate of growth since ITMS opened for windows users.

Whither Napster?

jholzner
Dec 15, 2003, 10:29 AM
Originally posted by ryme4reson
Great news, I changed from one click shopping to the shopping cart because I found myself helping out Apple a little to often!

Haha...I did the exact same thing! Now I review my cart avery week or so and decide if I really want it or not....also help me keep better track of how much I'm actually spending.

Ja Di ksw
Dec 15, 2003, 10:29 AM
Originally posted by Macrumors

The 25 millionth song -- which was purchased on Friday afternoon was Let it Snow! Let it Snow! Let it Snow! (http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewAlbum?playlistId=899161&selectedItemId=1219229) by Frank Sinatra.

Unbelievable, I think that was me!!!! :rolleyes:

(wonders how many people actually thought I was being serious until they read this last sentence, or worse, even after they read this last sentence)

mrsebastian
Dec 15, 2003, 10:49 AM
i know apple has said there's no money in selling music online, but i don't buy it. for sake of argument let's round off the number of songs sold in a year to 100 million. if apple makes a profit of 20 cents per song after all is said and done, that's still quite a bit of revenue! factor in promotions like they're going to have with pepsi and the numbers just get better.

EponymousCow
Dec 15, 2003, 10:55 AM
Originally posted by iMax531
It also says they're on track for 75 million... which is a few les than the 100 million that Jobs was shooting for... so something's gotta kick into gear soon. Hopefully the Pepsi deal will help. It;s a good start though

Actually, they are selling at 1.5million/week right now. If that rate continued for a year, they would sell 75million over that year. It won't even get them close to 100 million by April.

However, there are many reasons to believe that the weekly rate will continue to accelerate. For one, the iPod seems to be the hot gift this Christmas, and that locks a lot of people into only being able to use iTMS. The other thing is the Pepsi giveaway. Just getting people to try the service when they win a free song means that they have to download iTunes at least. That makes the barrier to further purchases very low. Apple has said they are not counting the free songs towards their goal, but it would help accelerate new sales.

It wouldn't surprise me to see 100 million songs given away, maybe 50 million will be redeemed by a total of 20 million unique customers (I'm just guessing). If 5 million of those customers buy just one album in addition, that is ~50 million (assume 10 tracks per album) new sales for iTMS, which will make up the gap. Apple will have to make damn sure the store stays up and reliable, though.

EponymousCow
Dec 15, 2003, 11:02 AM
Originally posted by mrsebastian
i know apple has said there's no money in selling music online, but i don't buy it. for sake of argument let's round off the number of songs sold in a year to 100 million. if apple makes a profit of 20 cents per song after all is said and done, that's still quite a bit of revenue! factor in promotions like they're going to have with pepsi and the numbers just get better.

Actually, Apple's profit will be at best 10c per song. I think there is money in selling music online, but only if you sell in enormous volumes. That is why Apple is agressively courting the music download buisness. They have a mechanism to make short term profits off of it (selling iPods), while running the music store at a break-even level for a few years. At some point, iPods will become commodities (much like the walkman did), but by then Apple will be selling $1billion a year and reaping a $100 million profit. Then they can sell iPods at low margins to encourage people to download music.

That's my (unprofessional) analysis of Apple's profit strategy off of music.

Bear
Dec 15, 2003, 11:12 AM
Originally posted by EponymousCow
Actually, they are selling at 1.5million/week right now. If that rate continued for a year, they would sell 75million over that year. It won't even get them close to 100 million by April.

However, there are many reasons to believe that the weekly rate will continue to accelerate. For one, the iPod seems to be the hot gift this Christmas, and that locks a lot of people into only being able to use iTMS. The other thing is the Pepsi giveaway. Just getting people to try the service when they win a free song means that they have to download iTunes at least. That makes the barrier to further purchases very low. Apple has said they are not counting the free songs towards their goal, but it would help accelerate new sales.... Add to the above the factor of the iTunes Music store being available in other countries. This will also help the purchase rate increase.

jncrow
Dec 15, 2003, 11:24 AM
Originally posted by wPod
iTunes ROCKS!!! But I think we already knew this. What about other services? Does anyone know if they have been keeping up, or have been behind as normal?

Think this usatoday.com article is very good for that. USAtoday itunes article (http://www.usatoday.com/tech/news/2003-12-14-apple2_x.htm)

El Dandy
Dec 15, 2003, 11:26 AM
do the math, it's not much money, say for agument's sake this year they make their goal and sell 100,000,000 song. At .20 each of profit, that onle 5,000,000 bucks. For something on this large a scale for it to bring in a maximum of 5 million bucks a year isn't really all that much.

frankly
Dec 15, 2003, 11:26 AM
Originally posted by EponymousCow
Apple has said they are not counting the free songs towards their goal, but it would help accelerate new sales.

Apple never said that they weren't counting the Pepsi giveaway songs in their total songs sold count. In fact, they said exactly the opposite. When Steve Jobs laid out their goals of wanting to hit 100 million songs he then said one of the things that will help us reach that goal is... and he talked about the Pepsi giveaway.

The Pepsi giveaway is being given away by PEPSI, not Apple. Pepsi will have to pay Apple for every song that someone redeems. All 100 million songs are not going to be redeemed but I think a decent portion of them will be.

Later, Frank

blogo
Dec 15, 2003, 11:29 AM
Also remember that the service is US-only at the moment.

El Dandy
Dec 15, 2003, 11:30 AM
Originally posted by frankly
Apple never said that they weren't counting the Pepsi giveaway songs in their total songs sold count. In fact, they said exactly the opposite. When Steve Jobs laid out their goals of wanting to hit 100 million songs he then said one of the things that will help us reach that goal is... and he talked about the Pepsi giveaway.

The Pepsi giveaway is being given away by PEPSI, not Apple. Pepsi will have to pay Apple for every song that someone redeems. All 100 million songs are not going to be redeemed but I think a decent portion of them will be.

Later, Frank

Alright, alright, we had this argument in the 20 million songs post, let's not start it up again

spencecb
Dec 15, 2003, 11:41 AM
This is refreshing to see Apple the market leader in certain areas for once...starting with the iPod, and now with the iTunes Music Store...way to go, Apple!

winmacguy
Dec 15, 2003, 11:44 AM
Originally posted by iMax531
It also says they're on track for 75 million... which is a few les than the 100 million that Jobs was shooting for... so something's gotta kick into gear soon. Hopefully the Pepsi deal will help. It;s a good start though

Dont forget that at this time of the year people are more interested in buying presents and iTMS gift certificates and iPods than actually down loading music. Factor in all the people who get Gift certificates and /or iPods in their christmas stockings all across the US and I think youll see a sharp rise in down loads. Then hopefully SJ will announce iTMS international store for the rest of the world in SF and you should see a HUGE spike in down loads. The current download numbers are only from US Mac users and the 50% of the US PC market with Win 2000 or XP at home who have perchased an iPod, this wont necessarily be the how portion of that market. So I would say that 100 million down loads a year will be pretty achieveable once the rest of the world gets on board

billyboy
Dec 15, 2003, 11:55 AM
Why do journalists keep on and on about only being able to use iTMS music with an iPod, and anyone with an iPod is unable to play any music from any of the other stores? If you reformat, surely you can play any track from any store on any MP3 player, or is that not true?

jncrow
Dec 15, 2003, 11:56 AM
Originally posted by winmacguy
Dont forget that at this time of the year people are more interested in buying presents and iTMS gift certificates and iPods than actually down loading music. Factor in all the people who get Gift certificates and /or iPods in their christmas stockings all across the US and I think youll see a sharp rise in down loads. Then hopefully SJ will announce iTMS international store for the rest of the world in SF and you should see a HUGE spike in down loads. The current download numbers are only from US Mac users and the 50% of the US PC market with Win 2000 or XP at home who have perchased an iPod, this wont necessarily be the how portion of that market. So I would say that 100 million down loads a year will be pretty achieveable once the rest of the world gets on board

Probably an understatement at that point. If everything drops in to place in the timeframe you suggested 100 million will fly by.

arn
Dec 15, 2003, 12:18 PM
Originally posted by billyboy
Why do journalists keep on and on about only being able to use iTMS music with an iPod, and anyone with an iPod is unable to play any music from any of the other stores?

iTunes Music Store sells "Protected AAC" songs.

the other services sell "Protected WMA"

the iPod won't play the protected WMA, and none of the other music players play Protected AAC.

arn

slipper
Dec 15, 2003, 12:19 PM
Originally posted by Macrumors
iTunes Music Store has now sold over 25 million songs since its launch in April 2003.
WOW! iTunes is definately making it big. $25million gross, DAMN!!!



Originally posted by El Dandy
do the math, it's not much money, say for agument's sake this year they make their goal and sell 100,000,000 song. At .20 each of profit, that onle 5,000,000 bucks. For something on this large a scale for it to bring in a maximum of 5 million bucks a year isn't really all that much.

you gotta be nuts. a 20% PROFIT margin on such a large scale like that is great.

pimentoLoaf
Dec 15, 2003, 12:20 PM
Alas, you may not find any iPods to play tunes on (the following from CBS MarketWatch):

IPod in demand

Online music pirates may still be thriving, but that doesn't mean legit efforts aren't gaining traction.

Demand for the IPod is outpacing supply to such an extent that Apple's (AAPL) popular portable digital music player may not be available come Christmas, according to a recent report. In the quarter ending in September, Apple shipped 336,000 IPod units, a 140 per cent increase from a year ago.

Most stores in New York have sold out of the larger capacity models, reported FT.com, and they don't expect to get more before the holidays.

Mason
Dec 15, 2003, 12:21 PM
Originally posted by El Dandy
do the math, it's not much money, say for agument's sake this year they make their goal and sell 100,000,000 song. At .20 each of profit, that onle 5,000,000 bucks. For something on this large a scale for it to bring in a maximum of 5 million bucks a year isn't really all that much.

20% of 100,000,000 is 20,000,000.

crees!
Dec 15, 2003, 12:35 PM
Originally posted by jncrow
Think this usatoday.com article is very good for that. USAtoday itunes article (http://www.usatoday.com/tech/news/2003-12-14-apple2_x.htm)

Nice how the article shows a picture of an old iPod.

winmacguy
Dec 15, 2003, 12:40 PM
Originally posted by jncrow
Probably an understatement at that point. If everything drops in to place in the timeframe you suggested 100 million will fly by.

I would say so considering the population base of Canadian, European, UK Mac And PC users are able to buy iTMS and all of us down in New Zealand and Australia.

jncrow
Dec 15, 2003, 12:44 PM
Originally posted by crees!
Nice how the article shows a picture of an old iPod.

You noticed that also huh...wonder how avid of itunes/ipod users this jounalist is?

winmacguy
Dec 15, 2003, 12:49 PM
Originally posted by slipper
WOW! iTunes is definately making it big. $25million gross, DAMN!!!




you gotta be nuts. a 20% PROFIT margin on such a large scale like that is great.

You guys are all missing the point of iTMS. It is not designed to make a profit as such. It is designed to pay for its self obviously. I has been designed to make down loading of music legal, cheap so that you dont need to pirate songs because the tracks only cost .99c US. And it is designed to seductively grab a good percentage of the PC users market both in the US and world wide this expanding the Mac consumer market.

While there are a lot of players either entering the market now and coming online next year, Unless they have their own MP3 play to carry the songs and provide a bottom line profit or are prepared to lose a lot of money in attempt to knock out the competition like Microsoft vs Apple most of them will go out of buiness much like most of the companies in the dot.com boom because accountants and share holders dont like it when their companies bottom line is showing up in the red.

winmacguy
Dec 15, 2003, 12:53 PM
Originally posted by pimentoLoaf
Alas, you may not find any iPods to play tunes on (the following from CBS MarketWatch):

IPod in demand

Online music pirates may still be thriving, but that doesn't mean legit efforts aren't gaining traction.

Demand for the IPod is outpacing supply to such an extent that Apple's (AAPL) popular portable digital music player may not be available come Christmas, according to a recent report. In the quarter ending in September, Apple shipped 336,000 IPod units, a 140 per cent increase from a year ago.

Most stores in New York have sold out of the larger capacity models, reported FT.com, and they don't expect to get more before the holidays.

Very true, I actually read the article and posted a reply at the weekend.
The replies that came back were that it was only effecting department stores and not Apple stores or Apple's online store. So if customers really wnat an iPod they can visit their nearest Apple store or buy one online.

macMaestro
Dec 15, 2003, 12:53 PM
Apple has this on their front page. This isn't a low-key press release.

macMaestro
Dec 15, 2003, 12:57 PM
The graphic:

ryanw
Dec 15, 2003, 01:22 PM
I think that comes out to 1.2 song a second...

60 sec * 60 min * 24 hours * 240 days (8 months) = 20736000 seconds

25 million songs / 20736000 seconds = 1.20563 songs per sec


So probably 30 songs were sold in the time it took me to write this post ...

Sabenth
Dec 15, 2003, 01:48 PM
a step in the right direction now lets take over the world HA HA HA EVIL LAUGH !!!!

GO ?

iPC
Dec 15, 2003, 02:37 PM
Originally posted by mrsebastian
i know apple has said there's no money in selling music online, but i don't buy it. for sake of argument let's round off the number of songs sold in a year to 100 million. if apple makes a profit of 20 cents per song after all is said and done, that's still quite a bit of revenue! factor in promotions like they're going to have with pepsi and the numbers just get better.
Actual number is supposedly less than 1 cent per song. The whole exercise is done to generate iPod sales. SJ has said as much.

20 cents is a pipe dream:

RIAA - 60-70%
servers/bandwidth
credit card companies
adverts

iChan
Dec 15, 2003, 05:52 PM
Originally posted by macMaestro
The graphic:

that cd album cover montage looks absolutely fantastic. i like it. but it does make me wonder the significance of 25 million...

punter
Dec 15, 2003, 07:47 PM
yes steve jobs said it's all for the ipod sales, but he could be lying.

Also Destra just launched an online music store in australia with advertised 99c (AU) prices, but in reality they're all $1.99

DestraMusic.com

Oh and it's WMA :( BOOO

wdlove
Dec 15, 2003, 08:02 PM
Originally posted by macMaestro
The graphic:

I saw that at apple.com, it's very impressive. Congratulations to Apple and Steve Jobs.

iChan
Dec 15, 2003, 08:12 PM
i don't knwo why, but enrique inglesias stands out sooo much, maybe it's his mole...

(I know it's on the other side of his face, any enrique-lovers out there... I was just kidding)

tychay
Dec 15, 2003, 08:36 PM
Originally posted by bommai
I thought they just crossed the 20 million line. Good to see them go to 25 million. Just keep it up now.

The 20 million came from a Rolling Stones article. It was then taken by Paul Thurrot to generate a very poorly done graph that implied that iTunes Music Store sales had crashed.

Arn pointed out (apparently correctly) that there is a significant lag between when the interview happened and the article was published.

That doesn't stop people from spreading Paul Thurrot's crap as fact. Given that he is a known Microsoft astroturfer (http://catb.org/~esr/jargon/html/A/astroturfing.html), I'm not surprised (http://winsupersite.com/) that he made this "mistake". Don't expect him to be eating crow, though I do wonder if he got any MVP dollars (http://mvp.support.microsoft.com/) for it.

BTW, just because Apple makes just north of 20cents/song doesn't mean that this is profit. First, you are assuming that all songs are sold individually (about half are sold in albums). Second, marketing takes a huge chunk (they had this free iPod/day giveaway for instance). Third, credit card takes a huge chunk (If you purchase only one song a day, almost all of the 20 cents will go to the credit card company/bank. Apple mitigates this by aggregating purchases through separation of AUTH and CAPTURE, shopping carts, gift certificates, and allowances). Fourth, bandwidth costs money and R&D must be recovered (though bandwidth isn't a huge issue because Apple already purchases in huge blocks for their trailers site).

Take care,

MyLeftNut
Dec 15, 2003, 08:39 PM
Yes...that Destra thingy could be a concern...people outside of America are generally not aware that they cant purchase songs from iTunes just yet. I know two people who recently bought iPods not knowing this and being surprised to hear from me that purchasing may not be available until early next year. These are PC users mind you. So c'mon Apple hurry up....

Good to know that Apple has some positive mindshare in the PC world...

slipper
Dec 16, 2003, 01:48 AM
Originally posted by winmacguy
You guys are all missing the point of iTMS.
im not missing the point, the guy that im quoting is missing the point. im just pointing out that a 20% profit on such a large scale like that is great.

winmacguy
Dec 16, 2003, 03:17 AM
Originally posted by El Dandy
do the math, it's not much money, say for agument's sake this year they make their goal and sell 100,000,000 song. At .20 each of profit, that onle 5,000,000 bucks. For something on this large a scale for it to bring in a maximum of 5 million bucks a year isn't really all that much.

This will be the factor that limits other companies. There will be many companies that start up next year and most will probably use the .wma fromat as they will be PC based for obvious reasons. Most services will probably launch with a great deal of fanfare and hooplar and be playable on every other device out there except the iPod (for obvious reasons). Many will be cheaper and possibly carry more songs.

The advantages that Apple has over these companies:
1 iTMS is simple and customer friendly and very stylish
2 iTMS world wide is gaining fantastic press coverage being rated the Invention of 2003 by Time Magazine, coverage in Fortune 500 for the business model of 2003
3 the iPod is selling like a rocket world wide to a large proportion of PC users providing Apple with a huge bottom line profit
4 the iPod is the coolest gadet to be seen with in 2003
5 Apple has got promos lined up starting with the Pepsi 100 million song give away being advertised at the 2004 Superbowl which will get more customers into the iPod
6 PC users who use the iPod are also starting to switch and consider switching to Apple computers when they realise how easy they are to use so Apple is winning there as well
7 McDonalds are also rumoured to be coming on Board with a 1 Billion song giveaway not long after the Pepsi deal. That equates to approximately 3 songs for every person in the US
8 Apple fans world wide and clamoring for iTMS to become available in their respective countries.
9 Countries outside the US doing iPod promos and give aways on the radio, tv, news papers etc. Most of these giveaways will likely go to PC owners who may then consider switching to Apple for the same reasons.
10 with Every Apple product purchase from a PC owner Apple gains more market share
11 More iPod sales still coming from an increasing world wide market
12 iTMS gift certificates
13 iTMS does not do subscriptions

Either way Apple will gain a greater market share.
Panther has just been voted the best Operating system by Australian PC magazine for 2003

TomSmithMacEd
Dec 16, 2003, 05:41 PM
I like the sound of this. Espeically the 1 million in gift certificates!

tychay
Dec 16, 2003, 06:59 PM
Originally posted by winmacguy
This will be the factor that limits other companies.

Actually, I see other companies as competing by not putting as much advertising dollars behind their campaigns as Apple. This may work for Rhapsody (Real) and Napster (Roxio). Note that both companies rely on a subscription model which has better margins and a more consistent income. (However, I wonder what the churn on those models is like.)

iTMS world wide is gaining fantastic press coverage being rated the Invention of 2003 by Time Magazine, coverage in Fortune 500 for the business model of 2003

I want to note here that both Time and Fortune Magazine are owned by Time Warner (ne้ AOL) which is the largest record label until Sony and BMG merge. So I'll question these particular examples.

However, examples like the Rolling Stone article may be a great example. This magazine is owned by Wenner Media which is independent of the labels (to my knowledge) and is also in business with an iTunes competitor: the little known eMusic.

Either way Apple will gain a greater market share.

Not necessarily true. According to reports Apple has somewhere near 50% market share in the MP3 player market and 80% of the downloadable music market (less if you count by revenue due to subscription based services--though it's hard to compute that due to bundled deals like Real SuperPass). If Apple were to gain marketshare in those two areas, that would be cause for worry.

whooleytoo
Dec 17, 2003, 07:04 AM
What I find strange is that Apple says the iTunes store exists just to sell iPods, but surely if they opened the iPod to other music stores by supporting WMA format as well, they'd sell more?

It also would be a good way of 'switching' users of other music stores to iTunes (they buy an iPod for WMA, realise it supports AAC as well so they start using iTMS).

Perhaps Apple wants to 'lock down' the market by controlling the format the music is distributed in, but I have a hard job believing Apple will be able to maintain that kind of monopoly in the long run.