iTunes sells 2 Million Songs [Archive]

Wry Cooter

May 14, 2003, 10:11 AM

They could sell more if they greatly expand the catalog.

My biggest fear is that some of the labels are using the apple music store as test waters; if it floats, they will try it themselves. What they miss totally is, people go to the store that has ALL the music, representing all the labels. Even then, you see AOL for example, pushing download exclusives. Competition is going to increase with labels mistaking details of the business models such as one click and tying into jukebox software being the magic (when it is the conglomeration of inventory that does it),

I get the feeling that more is being added (or pulled) than iTunes Music Store is letting us know about in the weekly emails. I would like those emails to be more complete and detailed if this is so.

drastik

May 14, 2003, 10:13 AM

Originally posted by Swinny
Fantastic news...think it is just a shame that as yet the release of the service outside of the US seems to be totally up in the air.

Looks like a fantastic service, but I'm afraid as soon as M$ nick the idea and make it a worldwide concern, all Apple's hard work will be in vein quite frankly...in my opinion, an international release is far more important than a windows release.

You'lls ee an international release by the end of the year. All of the labels are working on international licencing issues and Apple has already set up a liason for European labels who are interested. I imagine Asia will soon have an Apple Music Man too.

bokdol

May 14, 2003, 10:18 AM

just think by years end you can use itunes to download any music from any contry. it will change the way we listen to music. more international music well become popular in america. just think that one track from Bali that you cant get here in america, but itunes has it... ohhhh ahhhhh... i am wetting in my pants:D

elo

May 14, 2003, 10:24 AM

First, this is great, even astonishing news. The fact that there wasn't a huge second-week dropoff indicates that people already may be looking at iTMS beyond the novelty factor. As the catalog is increased (and this needs to happen quickly), the numbers could even *increase* as people start to habitually turn to iTMS to check for their favorite tunes.

As far as beating Microsoft (and others) to the punch, there is hope for optimism here as well. Aside from the server farms, which Apple will lease from Akami, the only barrier to international release is contracts. This is an enormous barrier, however, because of the amount of legal work involved and in the convincing of record company executives to bet their future on this idea. On the former point, Apple has a small head start but famously efficient attorneys. On the latter, Apple may have a big advantage. Even if Microsoft produced a software/server solution tomorrrow, it would face the same challenge as Apple in convincing record companies to license their IP. Here, Microsoft's reputation as a company that selfishly bullies its business partners could really come back to haunt it.

Given that the service is about 4X more popular than Apple predicted, I wouldn't be surprised if Apple has greatly accelerated the timetable for iTunes for Windows development. My guess is that this will be ready to ship before all of the necessary agreements have been forged. But that situation favors Apple, if narrowly.

elo

e2chris

May 14, 2003, 10:31 AM

Anyone know if CD sales have dropped at all? just curious...

snahabed

May 14, 2003, 10:31 AM

Here is my question, which no one may know...

With respect to the international licensing... Is this to set up a region-distinct iTMS, or just add them to the main mix?

If iTMS ends up being all separated like DVD regions, I will be PISSED. The hugest thing that could out of all this is that Americans could get songs that are not RELEASED in the US, for a much more affordable cost than is now available.

As it stands, I think I have maxed out my iTMS purchases (only at 20), as there is only so much of this kind of music I have need for. I have to turn to other P2P solutions for all of my other needs, such as getting, for instance, the top 30 songs on the UK dance charts each week, or the b-side to a European single for a band that hasn't released stuff here.

anthonymoody

May 14, 2003, 10:33 AM

Apple® today announced that over two million songs have been purchased and downloaded from its revolutionary iTunes® Music Store since its debut 16 days ago. Continuing the trend set during the first week, over half of the songs purchased to date were purchased as albums, further dispelling concerns that selling music on a per-track basis will destroy album sales.

--------------------------------------------------------------------------------

Apple has previously announced that over 1 million songs had been sold during the first week of sales."

Actually, I read this as a pretty large dropoff. 1mm in 7 days, and the 2nd million took 9 days. That's a 29% week over week dropoff.

As for album sales vs/ per track, I think this has as much to do with the fact that many songs are available only as album sales as any other factor.

Don't get me wrong, I wish Apple the best in this endeavor, but basically the business is on a $50 million (top line) run rate, which is a small drop in the bucket for a company which does billions in revenues. Yes, the margins on this business are higher than hardware, but it''ll have to grow monumentally to make a material difference to Apples bottom line.

TM

Wry Cooter

May 14, 2003, 10:36 AM

Originally posted by e2chris
Anyone know if CD sales have dropped at all? just curious...

Not in my case, I've bought some this week. Not everything is online. Although I'm sure my online downloading behavior is slowed by not having broadband at the moment.

So far my iTMS purchases have been cherry picking greatest hits collections that I don't think are all that great, save the songs I want. And replacing a few CDs (or tracks from same) that have been stolen over the years. As well as that vinyl I haven't replaced with CDs yet.

Snowy_River

May 14, 2003, 10:39 AM

Hmmm...

First 1 million songs - seven days.

Second 1 million songs - nine days.

It looks to me like there might be a little bit of a slow down here. Perhaps this will gradually continue until we reach an equilibrium... Maybe we'll see the US Mac market eventually settle somewhere around half a million songs per week?

entropy1980

May 14, 2003, 10:44 AM

Anybody else think they should post a counter for how many songs have been sold? Amazon does something like that around the holidays... it would be kind of cool to see the numbers climb!

yzedf

May 14, 2003, 10:47 AM

2 million songs does not mean 2 million transactions.

1/2 were bought as album. what is there on average... 10-13 songs per album?

1,000,000 single songs bought = $990,000

83,333 albums bought (avg of 12 songs per album) = $832,499 (at $9.99 per album)

About $1.8 million...

So that is something like 1,083,333 transactions over 16 days. 67,708 per day. 2821 per hour. 47 pre minute. 0.78 per second.

Not bad at all. And just think, this is only available to about 1 in 20 people that own a computer today.

Snowy_River

May 14, 2003, 10:48 AM

Originally posted by Swinny
Looks like a fantastic service, but I'm afraid as soon as M$ nick the idea and make it a worldwide concern...

I wouldn't worry too much about that. From what we know, the main issue facing Apple for both international and Windows release is one of licensing. Clearly, anyone else wanting to get into this game is going to face that same issue. Apple has already demonstrated to the record companies that it can be successful, so they are going to be far happier giving the licensing to Apple first, rather than turning around and handing it to someone else with an unknown product.

lmalave

May 14, 2003, 10:48 AM

Originally posted by anthonymoody
Don't get me wrong, I wish Apple the best in this endeavor, but basically the business is on a $50 million (top line) run rate, which is a small drop in the bucket for a company which does billions in revenues. Yes, the margins on this business are higher than hardware, but it''ll have to grow monumentally to make a material difference to Apples bottom line.

TM

You lack vision. For what is essentially a trial run, the iTMS is a runaway success. There are lots of ways that Apple can grow the iTMS, and they will happen on different timetables. First, the original 200,000 song selection is paltry. Now that the store is built and launched, I'm sure Apple will be in a song-ripping frenzy for quite some time. I think eventually the iTMS will be the place to obtain just about any music under the sun. Second, the international stores will happen very soon - the only barrier is really just legal and licensing issues. Lastly, of course, is the launch of iTMS for Windows. This is a very big deal for the major labels and they will only allow this once they are very comfortable with the iTMS model. Fortunately, if the small OS X user base keep buying millions of songs, I think this will convince the major labels that iTMS for Windows will be a lucrative revenue stream for them...

Snowy_River

May 14, 2003, 10:52 AM

Originally posted by yzedf
...

Not bad at all. And just think, this is only available to about 1 in 20 people that own a computer today.

Uh... 1 in 20 people in the US that own a computer today...

Let's not pretend that the US is the whole world. That can make people hate the US. :)

ipiloot

May 14, 2003, 11:09 AM

Originally posted by elo

As far as beating Microsoft (and others) to the punch, there is hope for optimism here as well. Aside from the server farms, which Apple will lease from Akami, the only barrier to international release is contracts.

There is one more barrier. Which isn't easy to overcome. I'ts Amazon's one-click buy. Apple is the only company in the world that is licenced it. And I bet that Amazon kicks Bill in the ass if that man want's the licence too.

Would You use the service if You had to authorize every time You buy a song?

FlamDrag

May 14, 2003, 11:12 AM

I agree with the user who posted about iTMS being a testing ground for the for the big labels. I read an article (on wired.com I think...) that said that only 3 of the 5 big labels have signed on for the windows version of iTMS. The other two stated exactly that - that this is a testing ground and they're not sure about the whole concept yet (not a quote).

I'm no so sure about each label striking out on their own though. A one-stop shopping service makes much more sense to me. As an average music listener, I have no idea what label each artist is on, so I'd never find the music I want. Plus the iTMS way encourages me (not enough however...) to browse for music and find more stuff I like to listen to and consequentially purchase.

I don't think it's out of the question for iTMS to break the ground and others to take the biggest portion of the overall pie.

iTMS is a relatively low-risk proposition for the labels.

My biggest complaint is the library of music is still pretty limited. Like I said, I'm not a hard-core music listener (I know little about indie bands etc) and even *I* can't find stuff that I want to buy.

Second complaint is that unless I really know what I want, it's hard to just find additional good stuff. The section about "others who have bought this, also bought..." is interesting, but usually completely irrelevant. I do expect it to pick up as use increases and more data is available. I browse almost nightly ready to buy SOMETHING and just can't find anything that I'd like. (yes I use the suggestion button)

I'd give iTMS a 40% chance to be THE weapon of choice for downloading legal music in 2 years. Just a guess.

I love the service, and for what it is right now (two weeks into it's life) it's great. But improvements need to come quickly and en masse for it to be #1...or even 2 or 3...

IJ Reilly

May 14, 2003, 11:13 AM

Originally posted by Snowy_River
Hmmm...

First 1 million songs - seven days.

Second 1 million songs - nine days.

It looks to me like there might be a little bit of a slow down here. Perhaps this will gradually continue until we reach an equilibrium... Maybe we'll see the US Mac market eventually settle somewhere around half a million songs per week?

Don't try to make too much of the forest by looking at two trees. Most new products follow an S-curve in sales growth. If the ITMS doesn't fizzle early on, this suggests that the real, rapid growth is yet to come.

Flowbee

May 14, 2003, 11:17 AM

Originally posted by lmalave
You lack vision. For what is essentially a trial run, the iTMS is a runaway success. There are lots of ways that Apple can grow the iTMS, and they will happen on different timetables. First, the original 200,000 song selection is paltry. Now that the store is built and launched, I'm sure Apple will be in a song-ripping frenzy for quite some time. I think eventually the iTMS will be the place to obtain just about any music under the sun. Second, the international stores will happen very soon - the only barrier is really just legal and licensing issues. Lastly, of course, is the launch of iTMS for Windows. This is a very big deal for the major labels and they will only allow this once they are very comfortable with the iTMS model. Fortunately, if the small OS X user base keep buying millions of songs, I think this will convince the major labels that iTMS for Windows will be a lucrative revenue stream for them...

All good points that I was just about to make.

In addition, as more people get broadband connections in the home, the Music Store will see more traffic. I have several friends who are still on dial-up, and haven't downloaded more than 1 or 2 songs because of the time it takes. (I've suggested that they use the 'shopping cart' and do their downloading overnight.)

Also, with dial up, the 30-second previews are difficult to listen to (rebuffering).

anthonymoody

May 14, 2003, 11:22 AM

"You lack vision. For what is essentially a trial run, the iTMS is a runaway success. There are lots of ways that Apple can grow the iTMS, and they will happen on different timetables. First, the original 200,000 song selection is paltry. Now that the store is built and launched, I'm sure Apple will be in a song-ripping frenzy for quite some time. I think eventually the iTMS will be the place to obtain just about any music under the sun. Second, the international stores will happen very soon - the only barrier is really just legal and licensing issues. Lastly, of course, is the launch of iTMS for Windows. This is a very big deal for the major labels and they will only allow this once they are very comfortable with the iTMS model. Fortunately, if the small OS X user base keep buying millions of songs, I think this will convince the major labels that iTMS for Windows will be a lucrative revenue stream for them..."

And you've been drinking your own Cool Aid.

1) the 200,000 songs represents the 80/20 rule...it may not be all the songs in the world but it's much of what the mainstream buying public wants...so they could triple songs available but that will almost certainly NOT come anywhere close to tripling sales

2) you think it'll be "the place to obtain just about any music under the sun" yet you have no understanding of Apple's marketing of the service, how much money they'll spend on it, or how much money it costs to effectively launch a worldwide brand/product or service. As an example, Microsoft spent *over $1 billion* in marketing on the XBox in its first year on the market. Apple spends less than 1/10 of that TOTAL on ALL its products and services...and look what kind of market share they have

3) you're dismissing the hurdles to launch internationally as "really just legal and licensing issues" - that is so completely naive that it's embarrassing. Have you ever worked with the IP lawyers at the labels? I didn't think so. I have. There's a reason that they consider working with Apple an experiment that they are extremely concerned about rolling out to a wide (i.e. PC using) audience.

4) you cite rolling it out to windows users as a very big deal for the majors. I agree, though not for the reason you cite. The labels' concern has nothing to do with comfort with the business model per se. It's the usage/rights associated with the downloads that concerns them. There's a reason that the services launched by the majors themselves - pressplay and musicmatch, have such restrive usage (i.e. copying, burning, etc) provisions...

As I said, dont get me wrong, but to herald what we've seen so far, and the likely prospects, as the 2nd coming, is simply naive.

TM

Jaykay

May 14, 2003, 11:36 AM

I would be interseted to know some of the stats for other online music services, see how better apple is doing. AAnybody know where to find some?

jxyama

May 14, 2003, 11:37 AM

How would they handle price differences? (For international iTMS.) Will they tie your credit card billing adress to the prices shown on iTunes? I sure hope they don't regionalize the songs. I'd like to have access to Japanese music if that ever launches...

I don't think the 29% drop in sales for the second week is a big deal. Blockbuster movies routinely see significantly bigger drops after the opening weekend. The bigger question is where will it stablize?

Other questions:
1) How many Mac users that are able to use iTMS (i.e. U.S. users) are yet to use the service? (I haven't tried iTMS yet, but I am mightly tempted. I fear that once I get into it, I'll drop a ton of money without really realizing how much I've spent!

2) How many people were induced to "switch" because of iTMS?

3) Would it be possible for educational institutions (who owns more Macs - proportionally speaking - and usually have fast internet connection) to set up an iTMS "station" where students can purchase songs and download into their iPod or burn an audio CD? How to handle credit card info on a public computer? Or will hardheaded school teachers argue that students should not be using school resources to download music? :D

I don't think other companies will be able to duplicate Apple... There will always be some clever finance guy in their department who wants to make finance based (instead of user based) decisions. If such wasn't the case, why would anyone come up with a fee based service or rental based service? Can you imagine a music store where you have to pay $20 a month to get in then you can ask the clerk for all the cd singles you want while there, but one at a time..? Sure, it might be economically sensible but it's so far off the norm of most music buyers, it's silly.

MorganX

May 14, 2003, 11:39 AM

Originally posted by maradong
cool,
but imagine the number of songs if the service is aviable worldwide not just the us, and for every pc user apple/wintel/linux

Imagine if Apple had a larger library. I've bought 40 and still can't find all I want.

yzedf

May 14, 2003, 11:42 AM

Originally posted by Snowy_River
Uh... 1 in 20 people in the US that own a computer today...

Let's not pretend that the US is the whole world. That can make people hate the US. :)

Sorry about that.

Since it is a US only service, I was using US numbers. World wide market share I think is only 2.1% now...

dongmin

May 14, 2003, 11:46 AM

Originally posted by FlamDrag
I agree with the user who posted about iTMS being a testing ground for the for the big labels. I read an article (on wired.com I think...) that said that only 3 of the 5 big labels have signed on for the windows version of iTMS. The other two stated exactly that - that this is a testing ground and they're not sure about the whole concept yet (not a quote).

I'm no so sure about each label striking out on their own though. A one-stop shopping service makes much more sense to me. As an average music listener, I have no idea what label each artist is on, so I'd never find the music I want. Plus the iTMS way encourages me (not enough however...) to browse for music and find more stuff I like to listen to and consequentially purchase.

It's completely moronic that all the labels aren't jumping all over this. The iTMS is about as pure a form of capitalism as you can have. What else has:

1. instant gratification
2. minimal transactions/transportation costs for record cos.
3. minimal transaction costs for consumers
4. low 'cost of entry' for consumers ($.99 a song--less than a cup of coffee!)
5. reasonable level of DRM (more than CDs)
6. minimal cost to expand the selection (no inventory costs) and hence create more potential sales

Sure the labels can try to offer a similar service themselves or find someone who'll do it cheaper, but no one else can make this whole thing as easy and pleasurable for the consumer, which is a big reason why it's been so successful.

arn

May 14, 2003, 11:54 AM

Originally posted by Jaykay
I would be interseted to know some of the stats for other online music services, see how better apple is doing. AAnybody know where to find some?

According to a wired article:

http://www.wired.com/news/digiwood/0,1412,58706,00.html

Lee Black, an analyst with Jupiter Research, said he'd also heard unofficially that 200,000 songs were downloaded on opening day. He said if the number is correct, it rivals half the number of legal downloads last year from all the competing online services.

So, last year, all the other legal download services combined sold about 400,000 songs.

Apple has sold 2 million in 16 days.

arn

Rocketman

May 14, 2003, 12:17 PM

Originally posted by yzedf
2 million songs does not mean 2 million transactions.

1/2 were bought as album. what is there on average... 10-13 songs per album?
1,000,000 single songs bought = $990,000
83,333 albums bought (avg of 12 songs per album) = $832,499 (at $9.99 per album)
About $1.8 million...

Steve has GOT to be in heaven this week.

1. Apple is a music company and the biggest almost overnight.
2. Pixar is releasing NEMO and let's face it, it will rock.
3. The Powerbook releases met with wide cheers.
4. The noise surrounding forthcoming 970 based Macs is positive and loud.

As for stock, buy on rumor, sell on news, so it may be quite some time till it reflects anything exciting. One of the disadvantages to having billions in the bank. Stock price is largely treated like bonds.

He DID say it was the year of the laptop. Please let there be a 970 based Powerbook right away . . . .

I may have to send Steve one of the few things he does not already have: a rocket!

Rocketman

http://www.v-serv.com/-upload/avatar.jpg

Wombatronic

May 14, 2003, 12:30 PM

Originally posted by anthonymoody
1) the 200,000 songs represents the 80/20 rule...it may not be all the songs in the world but it's much of what the mainstream buying public wants...so they could triple songs available but that will almost certainly NOT come anywhere close to tripling sales

Just like to comment on this. I disagree completely, just so you know. :)

If you look at the demographic that is keen to get current pop songs, I would wager that most of them 1) are able to get the tracks of P2P, 2) are capable of justifying it to themselves (for lack of $, say), and 3) are probably not where ITMS is getting their revenue. I do not think the yuppy mac demographic is after this stuff as much as the us at-large demographic. Of course, this is speculation, and it would obviously be cool to learn more about the distribution of purchases.

Also, since most of the pop bands nowadays are so ephemeral, most people are not really looking to fill out a back catalog of their work, either having it already or not being interested in it.

Anyhow, I think there are a bunch of reasons to think that increasing the catalog could increase sales. Imo, the biggest hurdle they have is to increase the visibility of the new tracks. Doesn't do anyone any good to add the new stuff if you don't know that it will be there. I have stopped looking because (aside from some jazz) I can not find anything other than top 40 hits and stuff from the 80s. :(

noel4r

May 14, 2003, 12:37 PM

how many do you all think they'll sell in one year?

Mudbug

May 14, 2003, 12:41 PM

How many of you (I guess this would make a good poll - any mods reading?) have gone out and bought a physical album to listen to since the launch of iTMS? If you have, was it one that was available on iTMS or not?

DrGruv1

May 14, 2003, 01:02 PM

AAC at 128 is OK at BEST....

I've downloaded about forty-fifty bucks of albums and songs, thought it was so cool. But listening to them through my Mackie 624 studio monitors, they quickly become tiring and lack in depth.

I've said (pro audio newsgroup) apple would have to improve the bit rate before I'd try again...

(he said as he downloaded a few more songs I had to hear right now...)

Hopefully more will want a higher quality and apple will increase the res. of the files

-Michael Droste

Jerry Spoon

May 14, 2003, 01:04 PM

Originally posted by noel4r
how many do you all think they'll sell in one year?

If Apple doesn't open up to the international market or pc users, I would guess about 35 million in the first year, averaging 3 million a month. They can't stay on the pace they're on now, but it will still be a monumental success. Of course, if they open up to mac users outside the US or pc users, that number is going to be a lot bigger.

vniow

May 14, 2003, 01:09 PM

Originally posted by lmalave
Tonight I might buy the new Album from the Yeah Yeah Yeahs.

Get it get it get it get it get it get it get it get it get it get it.

Worth every penny.

Originally posted by arn
So, last year, all the other legal download services combined sold about 400,000 songs.

Apple has sold 2 million in 16 days.

arn

http://forums.macrumors.com/attachment.php?s=&postid=251718

vitrector

May 14, 2003, 01:10 PM

Originally posted by Mudbug
How many of you (I guess this would make a good poll - any mods reading?) have gone out and bought a physical album to listen to since the launch of iTMS? If you have, was it one that was available on iTMS or not?

I went out on a binge and bought about 8 albums last weekend. The reason I went the the store was to buy an album that I saw on the iTMS. Personally, I am unsatisified with the 128 kbs encoding, and less concerned about the drm, but somewhat concerned (no resale value, unlike CDs).

While I have bought 2 albums and several songs off the iTMS, I will likely be buying more CDs then iTMS albums.

BTW: The record labels really should be all over the iTMS:
1. DRM included (NOT in CDs!!!)
2. Used music market = dead for DRM music
3. Impulse buying (hey I bought a bunch of stuff even though I prefer CDs!!)
4. Low inventory cost - even old stuff and unpopular stuff can be kept available at minimal incremental overhead, hey every sale counts!
5. More and more people buy CDs just to rip them for their computer/MP3 player - CDs will become far less popular with the convenience of on-line music stores (this will save the music industry huge money not to have to press and distribute CDs).

....

NeXTCube

May 14, 2003, 01:30 PM

Originally posted by Mudbug
How many of you (I guess this would make a good poll - any mods reading?) have gone out and bought a physical album to listen to since the launch of iTMS? If you have, was it one that was available on iTMS or not?

I've got iTunes 4 and a cable modem, but I went out last weekend and bought four new CDs (and six vinyl records) anyway because one of the local record shops was having a big sale! :)

I've looked briefly at the iTunes catalog, but it seemed like almost everything I was interested in I already owned - my tastes are pretty boring and mainstream - and since I can't use AAC files with my Archos Jukebox, that limits the value of the files that Apple's selling.

wilco

May 14, 2003, 01:35 PM

Without any significant advertising.

I may be wrong, but I've yet to see a single tv spot promoting the service.

Mudbug

May 14, 2003, 01:37 PM

Originally posted by wilco
Without any significant advertising.

I may be wrong, but I've yet to see a single tv spot promoting the service.

Just the one shown at the unveiling. I've yet to see one elsewhere as well

mactastic

May 14, 2003, 01:41 PM

Originally posted by wilco
Without any significant advertising.

I may be wrong, but I've yet to see a single tv spot promoting the service.

I haven't seen any either, but I think some spots were shot right before the iTMS release... remember the casting call for people who were not shy about their singing voices.

chewbaccapits

May 14, 2003, 01:46 PM

All I know is that I haven't bought a CD in years....Yes, years, yet, I was intrigued with the music store. Now, I've spent more money in the ITMS than I have ploping for overpriced CDs. Great going Apple. Here's to 10 million more!!!

Jerry Spoon

May 14, 2003, 01:48 PM

Originally posted by wilco
Without any significant advertising.

I may be wrong, but I've yet to see a single tv spot promoting the service.

The only thing I've seen is an ad in the last two weeks Newsweek magazines on the inside front cover advertising the service along with the iPod and iMac as a complete music solution thing. I didn't read it too closely. They've got a girl jamming out listening to her iPod and the text very small to the left of the two page spread.

Mudbug

May 14, 2003, 01:52 PM

Originally posted by Jerry Spoon
The only thing I've seen is an ad in the last two weeks Newsweek magazines on the inside front cover advertising the service along with the iPod and iMac as a complete music solution thing. I didn't read it too closely. They've got a girl jamming out listening to her iPod and the text very small to the left of the two page spread.

there's a full page ad on the back of the current issue of Time Magazine with a Gibson Guitar all alone on a white background with AppleMusic.com underneath in black type. That's all I've seen.

zigi

May 14, 2003, 01:52 PM

Originally posted by Swinny
Fantastic news...think it is just a shame that as yet the release of the service outside of the US seems to be totally up in the air.

Looks like a fantastic service, but I'm afraid as soon as M$ nick the idea and make it a worldwide concern, all Apple's hard work will be in vein quite frankly...in my opinion, an international release is far more important than a windows release.

Yeah, I think it should be Apple's top priority to get a worldwide consumer base on the Mac before moving it to Windows. I know there are ongoing talks, but an article the other day said something about international release by the end of the year. It would be very disappointing if it takes this long.

Freg3000

May 14, 2003, 01:57 PM

I hope that Apple gets 50 million within the first year. That is very optimistic, but I really just like the overall sound of the number. Imagine a press release....

Over 50 million songs sold via iTMS. :)

nuckinfutz

May 14, 2003, 01:59 PM

Actually, I read this as a pretty large dropoff. 1mm in 7 days, and the 2nd million took 9 days. That's a 29% week over week dropoff.

Bad Math. Divide to get your daily rate for each week then subtract the 9 day total from 7 day. You'll find the drop off was roughly 22%

you think it'll be "the place to obtain just about any music under the sun" yet you have no understanding of Apple's marketing of the service, how much money they'll spend on it, or how much money it costs to effectively launch a worldwide brand/product or service. As an example, Microsoft spent *over $1 billion* in marketing on the XBox in its first year on the market. Apple spends less than 1/10 of that TOTAL on ALL its products and services...and look what kind of market share they have

Neither do you TM. Neither of us knows the Marketing and Logistics of this service. But one has to presume that the company that reaches Critical Mass will be able to create new profit structures form it's success. It's more than adding up weekly sales and muliplying by 52.

How would they handle price differences? (For international iTMS.) Will they tie your credit card billing adress to the prices shown on iTunes? I sure hope they don't regionalize the songs. I'd like to have access to Japanese music if that ever launches...

That's easy. When I buy something in Canada my Credit Card company does the conversion for me. Apple doesn't have to blink an eye. It's a USD .99 period if they remain equal in licensing.

I've downloaded about forty-fifty bucks of albums and songs, thought it was so cool. But listening to them through my Mackie 624 studio monitors, they quickly become tiring and lack in depth.

I tend to hear that about Mackie Monitors with lots of music. Poor Mans Genelecs(at least the 824s)

deepkid

May 14, 2003, 02:13 PM

Originally posted by DrGruv1
AAC at 128 is OK at BEST....

I've downloaded about forty-fifty bucks of albums and songs, thought it was so cool. But listening to them through my Mackie 624 studio monitors, they quickly become tiring and lack in depth.

I've said (pro audio newsgroup) apple would have to improve the bit rate before I'd try again...

(he said as he downloaded a few more songs I had to hear right now...)

Hopefully more will want a higher quality and apple will increase the res. of the files

-Michael Droste

You have to step back ask yourself, "How many people using the iTMS will be listening to their purchases on professional monitors?". Not many at all.

Most of them don't have the ear and are content listening to their purchases on *CONSUMER* earphones or speakers, hopefully an iPod.

From that perspective, a 128 AAC file is overkill.

Kid Red

May 14, 2003, 02:18 PM

How does this news warrant 13 negative votes? That's fricking dumb, there's 13 fricking dumb people here. International support? Coming. Not much of your mucis? More coming every week. What is there to bitch about Apple doing something successful? The stock has gone up $3-$4 since the music news broke the first week about the 1 million downloads.

Some people need a life if they feel positive news like this is negative. Maybe that feature needs to be removed from the front page.

jxyama

May 14, 2003, 02:19 PM

I doubt international pricing would be so simple...

In Japan, a CD album costs nearly $30 when converted to dollars.
In Switzerland, a CD costs roughly $20.

Those are the only two places I've lived and bought CDs from, but
the music companies won't settle for suddenly accepting "relatively"
lower prices from those regions just because it's online. So you can't
just sell each song for 99 cents in local currency equivalent...

It's almost like you pay 99 cents if billing address is in the U.S.,
equivalent of $1.25 (~150 yen) per song if you live in Japan, etc...

I'm wondering how this can be accomplished without people in Japan
feeling ripped off. (I mean they already know they are paying more than
other countries for regular CDs, still...)

[edit]
By the way, I don't think Apple ever intended iTMS to become the online source of *all* music, IMO. It's a source of online music. People who wanted really good quality music have and probably always will go out and get the music physically. So recording companies don't care about those audience much... Stop complaining about AAC quality. I think the service is aimed at those used to getting mp3's and we know mp3 is not a high quality format...

As for higher bit rate... I don't think they can do that yet. I think one of the thing 128 kbps AAC does is that when dropped to an audio CD and re-ripped to mp3, the quality gets bad. I've never done this but I think this is one of the features of AAC that prevents being used on P2P. If the bit rate was higher, the re-ripped mp3 will sound good enough to be traded on P2P.
[\edit]

DrGruv1

May 14, 2003, 02:41 PM

AAC 128 is not good sound on any medium..

listen to the cd first... and compare.

-mike

mara

May 14, 2003, 02:48 PM

"That's easy. When I buy something in Canada my Credit Card company does the conversion for me. Apple doesn't have to blink an eye. It's a USD .99 period if they remain equal in licensing."

I think that one of the biggest problems is taxes. For example every European country have their own VATs. Maybe it is not a problem but I really hope that if iTMS launches in Europe, it´ll not be more expensive than in USA. We are paying 499 euros for the 15 gig iPod. At the monent with one euro you get 1,1498 dollars.

Mudbug

May 14, 2003, 02:51 PM

Originally posted by mara
1,1498 dollars.

I think that should be 1.1498 dollars. ;)

otherwise, I'm investing in foreign currency now.

steveh

May 14, 2003, 02:51 PM

Originally posted by DrGruv1
AAC 128 is not good sound on any medium..

But it's Good Enough(tm) for most people, most of the time. It's higher quality than FM radio, not to mention AM, and tape.

None of which have been seen as "not good enough" for most of the listening public, certainly not for listening to music in and uncontrolled environment, which is where most people spend most of their waking hours.

listen to the cd first... and compare.

If you need the higher quality, then go buy the CD, AAC is not replacing CDs, in case you were worried.

It's called freedom to choose. There is no single solution that is perfect for every person in every situation.

steveh

May 14, 2003, 02:54 PM

Originally posted by Mudbug
I think that should be 1.1498 dollars. ;)

otherwise, I'm investing in foreign currency now.

Common european formatting uses commas where Americans use periods, and vice versa.

Sometimes it looks a bit startling.

nebben123

May 14, 2003, 03:15 PM

i'll try it out when the songs are 50c each, or $6 for an album. 256k aac minimum. until then, it's not worth it for me.

i can get most new cd's for $13 or less and not have to worry about quality or spending $1 + my time to burn to disc so i can listen to it in my car.

for now, no thanks apple.

99c a song is too damn expensive when there is no physical medium and the encoding is a paltry 128k aac.

Phil Of Mac

May 14, 2003, 03:39 PM

Originally posted by mara
I think that one of the biggest problems is taxes. For example every European country have their own VATs. Maybe it is not a problem but I really hope that if iTMS launches in Europe, it´ll not be more expensive than in USA. We are paying 499 euros for the 15 gig iPod. At the monent with one euro you get 1,1498 dollars.

Good point. And it will be more expensive. Blame your governments.

Originally posted by jxyama
I doubt international pricing would be so simple...

In Japan, a CD album costs nearly $30 when converted to dollars.
In Switzerland, a CD costs roughly $20.

Those are the only two places I've lived and bought CDs from, but
the music companies won't settle for suddenly accepting "relatively"
lower prices from those regions just because it's online. So you can't
just sell each song for 99 cents in local currency equivalent...

It's almost like you pay 99 cents if billing address is in the U.S.,
equivalent of $1.25 (~150 yen) per song if you live in Japan, etc...

I'm wondering how this can be accomplished without people in Japan
feeling ripped off. (I mean they already know they are paying more than
other countries for regular CDs, still...)

It might be taxes. I think other than taxes, prices should be, and probably will be the same all over.

Originally posted by jxyama
How would they handle price differences? (For international iTMS.) Will they tie your credit card billing adress to the prices shown on iTunes? I sure hope they don't regionalize the songs. I'd like to have access to Japanese music if that ever launches...

You mean the currency differences? I don't know. Taxes will be another issue.

Originally posted by jxyama
How many Mac users that are able to use iTMS (i.e. U.S. users) are yet to use the service? (I haven't tried iTMS yet, but I am mightly tempted. I fear that once I get into it, I'll drop a ton of money without really realizing how much I've spent!

I'll start this fall.

Originally posted by jxyama
Would it be possible for educational institutions (who owns more Macs - proportionally speaking - and usually have fast internet connection) to set up an iTMS "station" where students can purchase songs and download into their iPod or burn an audio CD? How to handle credit card info on a public computer? Or will hardheaded school teachers argue that students should not be using school resources to download music? :D

They will. I could see Apple setting up these stations at their own stores, though.

jxyama

May 14, 2003, 03:49 PM

By the way, unless you use mass transit or live within walking distance of a music store, getting a CD costs you gas as well as time.

I guess what I meant about international pricing is this:

A can of Coke is usually 75 cents or less in the U.S. from most vending machines.
In Japan, it's 120 yen, which is roughly $1.

If Coke suddenly and miraculously became available via iDrink Apple service worldwide, Coca-Cola Japan simply won't let Apple sell Coke for the U.S. price in Japan.

This is beyond VAT...

I think this will necessitate iTunes to remember what region you are in and display the adjusted price. Otherwise, the local music sales would be hit pretty hard...

[edit] By the way, I hope the guy talking about the European convention of comma in place of a decimal point was joking. I've met too many ignorant people in the U.S. who could never get over why Swiss postal code (no, it's not a ZIP code) has "only" 4 digits or silly web designers who format the address entry fields to be exactly like American style (complete with "required" 2-letter State abbreviation and 5 digit Zip code) even though their website expects substantial international traffic... [\edit]

matznentosh

May 14, 2003, 04:05 PM

Originally posted by jxyama
By the way, unless you use mass transit or live within walking distance of a music store, getting a CD costs you gas as well as time.

I guess what I meant about international pricing is this:

A can of Coke is usually 75 cents or less in the U.S. from most vending machines.
In Japan, it's 120 yen, which is roughly $1.

If Coke suddenly and miraculously became available via iDrink Apple service worldwide, Coca-Cola Japan simply won't let Apple sell Coke for the U.S. price in Japan.

This is beyond VAT...

I think this will necessitate iTunes to remember what region you are in and display the adjusted price. Otherwise, the local music sales would be hit pretty hard...

But we are talking about a product that is sold in quantities that approach a commodity. Apple computers are not commodities. Memory chips are. Music is sold in such great quantities it is a kind of commoditity. Commodities are sold - usually - at lowest cost and highest volume. so every extra coke you sell, or Proctor and Gamble soap, etc., is money for the parent company. So selling extra copies of songs in Japan is money in Sony/Columbia's account. I think that means a potential decrease in margin would be ok, if total sales went up.

And don't forget that exchange rates can work both ways, can vary so that a dollar is worth less or more of the other currency. It could wind up being more yen to buy 99¢ worth of song at some point in the future, not less.

jxyama

May 14, 2003, 04:21 PM

Originally posted by matznentosh
And don't forget that exchange rates can work both ways, can vary so that a dollar is worth less or more of the other currency. It could wind up being more yen to buy 99¢ worth of song at some point in the future, not less.

Very true... I am curious how it will be done. Personally, it would be nice to be able to access some Japanese music without having to buy CDs when I go back to Japan every few years.

Freebart

May 14, 2003, 04:24 PM

Originally posted by wilco
Without any significant advertising.

I may be wrong, but I've yet to see a single tv spot promoting the service.

I've talked with many Mac advocates that are not tuned into the online news and rumors sites that didn't hear about the service yet. If they are pulling in more dollars than anticipated and they can handle more customers, they can afford to get some (more?) ads out there. Or rather, they can't afford not to get some ads out there.

Maybe Apple is rethinking their initial commercials? I didn't think the responce at Steve's presentation was overwhelming. They've been pulled from http://www.apple.com/music/ads/.

Jerry Spoon

May 14, 2003, 04:26 PM

Originally posted by jxyama
Would it be possible for educational institutions (who owns more Macs - proportionally speaking - and usually have fast internet connection) to set up an iTMS "station" where students can purchase songs and download into their iPod or burn an audio CD? How to handle credit card info on a public computer? Or will hardheaded school teachers argue that students should not be using school resources to download music? :D

I doubt any school district, college, or university would want to set up stations for this type of thing. What is the advantage to the school? None that I can see. But don't think that will stop kids from doing it anyway behind the teachers' or professors' back. The problems come when Billy in high school decides to use dad's credit card to set up his one-click account and buys $20 worth of music and then leaves the settings and the next kids rack up another $200 worth of charges.

noel4r

May 14, 2003, 04:39 PM

with 2 million downloads in two weeks and only mac users can buy music, i dont think they need to advertise right now. everybody knows about it. i think they should save the advertising dollars until they introduce iTMS for Windows...

theFly

May 14, 2003, 05:17 PM

Originally posted by Jerry Spoon
If Apple doesn't open up to the international market or pc users, I would guess about 35 million in the first year, averaging 3 million a month. They can't stay on the pace they're on now, but it will still be a monumental success. Of course, if they open up to mac users outside the US or pc users, that number is going to be a lot bigger.

Here's a bit (http://cbs.marketwatch.com/news/story.asp?guid=%7B4FCADACC%2D0FF6%2D4BE5%2D8157%2DA5AA0D7A2D54%7D&siteid=mktw) to tantilize the possibility of the Windows potential for the iTMS:
But analysts and investors expect ITunes to take off when Apple makes its music store available to users of the competing Windows platform, whose numbers dwarf the ranks of Mac users. If 10 percent of the Windows market downloaded music, sales would come to around $20 million a week -- which pencils out to annualized earnings of 62 cents, according to analyst Kevin McCarthy of CS First Boston.

I believe they are talking about Apple's share of the sales being $20 million, which is roughly $1 billion per year revenue from the service, if that weekly sales averages across a year.

Since Apple makes roughly a third from the sales, $20 million is $67 million gross sales per week. Someone else can do the calculations to figure out the single-to-cd ratios at that number.

Looks potentially good, I'd say.

theFly
www.flyonthemac.com
Rumors You Can Bet On

IJ Reilly

May 14, 2003, 05:42 PM

Originally posted by Jerry Spoon
They can't stay on the pace they're on now, but it will still be a monumental success.

On the contrary. As I've already pointed out, growth in sales should follow a classic "S" curve if the product doesn't fizzle right out of the gate. This one hasn't even reached the entire Mac market in the first two weeks, let alone the much larger market beyond the Mac. The people who've tried it are those who are comfortable trying something new (aka, "early adopters"). The less adventuresome folks are next, and they're a much, much bigger crowd.

The "S" curve. Look it up -- it's in all the marketing and human behavior books.

Stelliform

May 14, 2003, 06:13 PM

I think those with negative comments are missing the point. A primary feature of the Apple Music Store is for people like me, who would rather be legal but not willing to buy a $17 CD for the one song that I want, to get legal. I have bought 11 songs so far. That is $11 more than the music companies have gotten from me in 2 years.

The whole system that the music industry has employeed to sell music is draconian. And I do not want to be a part of it. Apple Music Store is finally something that I do not detest. I go check and see if they have the song, and if I want it I buy it. If they do not have it, I get on the net and I download it for free. Hey their loss, I would have bought it if they would have sold it the way I wanted it.

Jerry Spoon

May 14, 2003, 06:47 PM

Originally posted by IJ Reilly
On the contrary. As I've already pointed out, growth in sales should follow a classic "S" curve if the product doesn't fizzle right out of the gate. This one hasn't even reached the entire Mac market in the first two weeks, let alone the much larger market beyond the Mac. The people who've tried it are those who are comfortable trying something new (aka, "early adopters"). The less adventuresome folks are next, and they're a much, much bigger crowd.

The "S" curve. Look it up -- it's in all the marketing and human behavior books.
The question really is, "When will it reach the entire (or majority) of the mac market?" Apple's really going to have to advertise, and as mentioned earlier by others and myself, there hasn't been much of that. Why? Maybe b/c they wanted to make sure they could handle the initial influx before going out to the mac-masses. I know others have said this before about other Apple ads, but I'm worried that Apple is going to make a slick ad and when the 30 seconds are over, the average mac user won't really realize how great this service is. Watching the commercials they have now that I've seen on Apple's site (but not on TV) I really think it lacks a little info on how easy this whole process of using the iTMS really is.

Phil Of Mac

May 14, 2003, 06:53 PM

I thought the ads were kind of annoying. They'd be especially annoying after a while.

dstranathan

May 14, 2003, 07:10 PM

So how much $ does Apple actually MAKE off each song though? I doubt it's much money at all really...

deepkid

May 14, 2003, 07:28 PM

Originally posted by dstranathan
So how much $ does Apple actually MAKE off each song though? I doubt it's much money at all really...

Published reports state that Apple collects about .35 per song in revenue. You won't know what their actual profit is, until they report it.

But knowing how stealth they are during earnings calls, it'll probably be Gaussian blurred, and lumped in with other numbers unless quite substantial.

For the fun of it, let's run some numbers:

A. 2 million songs x .35= $700K GROSS

B. NET=?? because their costs are the unknown.

They probably won't turn a true profit on this venture for quite some time UNLESS the infrastructure is made from modules already in use elsewhere, like the Apple Store, Trailers Page, etc.

DrGruv1

May 14, 2003, 08:06 PM

Aren't one of the rumors 'an advanced ipod doc to plug into a stereo"

While I mostly use the Mackie's, I have a pair of Paradigm bookshelf speakers in the living room.

Won't people hear the difference from the aac they play from the pod and their own cd's?

-Michael

MacFan25

May 14, 2003, 08:08 PM

I'm glad to see the songs and albums are still selling! Hopefully they will continue to sell!

Wry Cooter

May 14, 2003, 09:28 PM

Originally posted by DrGruv1
Aren't one of the rumors 'an advanced ipod doc to plug into a stereo"

Won't people hear the difference from the aac they play from the pod and their own cd's?

-Michael

I think you overestimate the typical home stereo, and the people using them. Besides, an A/B comparison is not likely to happen that often even if they did have decent speakers and knew how to listen to them.

Typical home I have been in, over fifty percent, don't even place the speakers to get a stereo image, they place them within 3 feet of each other on either side of their receiver. Then they go sit in the corner or go into the other room while it plays.

nuckinfutz

May 14, 2003, 09:29 PM

Originally posted by nebben123
i'll try it out when the songs are 50c each, or $6 for an album. 256k aac minimum. until then, it's not worth it for me.

i can get most new cd's for $13 or less and not have to worry about quality or spending $1 + my time to burn to disc so i can listen to it in my car.

for now, no thanks apple.

99c a song is too damn expensive when there is no physical medium and the encoding is a paltry 128k aac.

So I assume then you don't use any P2P software for Music?

As for the quality of AAC like MP3 it will continue to be refined as the Encoding and Decoding get better. MP3 hasn't always been as good as it is today.

The fact is if people don't buy in at .99 cents then that reduces the chances of the service getting large and possibly cheaper. I won't stop buying CDs but for that one song from an artist I like..I'd like to support them.

I'm sure there are alot of people who feel like .99 is alot of money as they gleefully stuff their faces with fast food and partake in $4 Beers at the local games.

chewbaccapits

May 14, 2003, 10:56 PM

Originally posted by jxyama
"...Stop complaining about AAC quality. I think the service is aimed at those used to getting mp3's and we know mp3 is not a high quality format...
[\edit]

No kidding...I mean, no one complains how those crappy mp3 sound when they're free, but complain that the better format (AAC) sucks. Isn't this format better than what the competition was or is selling?

spantol

May 14, 2003, 11:25 PM

For what it's worth, I've seen three commercials for the iTunes Music Store this evening. They're rather annoying, but they're out there.

NeXTCube

May 14, 2003, 11:40 PM

Originally posted by DrGruv1
Aren't one of the rumors 'an advanced ipod doc to plug into a stereo"

While I mostly use the Mackie's, I have a pair of Paradigm bookshelf speakers in the living room.

Won't people hear the difference from the aac they play from the pod and their own cd's?

-Michael

I have a set of KEF 104|2s with Adcom pre/power amp and CD player. Older stuff, but it sounds okay! :)

Having music files on the computer, whether in MP3 or AAC format, is all about convenience and portability, as far as I'm concerned. My CDs and LPs have nothing to fear from my Archos Jukebox while I'm home. But when I'm not...well, that's a different story. I'd much rather move a $170 MP3 player with 200 albums on it around than transport 200 CDs.

So, will people hear the difference? Well, uhm, yeah! But that's not the point.

mim

May 15, 2003, 12:41 AM

Originally posted by matznentosh
But we are talking about a product that is sold in quantities that approach a commodity. Apple computers are not commodities. Memory chips are. Music is sold in such great quantities it is a kind of commoditity. Commodities are sold - usually - at lowest cost and highest volume. so every extra coke you sell, or Proctor and Gamble soap, etc., is money for the parent company. So selling extra copies of songs in Japan is money in Sony/Columbia's account. I think that means a potential decrease in margin would be ok, if total sales went up.

You should be right, but you aren't. Music prices are artificially inflated in some countries to protect their local content (this goes for other media too - books, journals, etc). It's price fixing by local companied supported by govenrments.

If it's a good thing or not....well, that is a long and hard debate that no-one has the right answers to. Currently its seen as ok for say, wheat to be deregulated (ie - no import tarrifs), but people obviously feel more protective of music - as it is often an important cultural definition. An example is the French movie industry. The government has huge tarrifs on imported movies. This money goes to grants for the French movie industry. Hence all the really good quality French movies (and their very strong local industry).

The music store will fall under the same regulations (namely parallel import laws). I expect the music to be much more expensive in places like Japan and Australia. Fact of life at the moment.

a.

Ugg

May 15, 2003, 01:31 AM

Originally posted by anthonymoody

Actually, I read this as a pretty large dropoff. 1mm in 7 days, and the 2nd million took 9 days. That's a 29% week over week dropoff.

As for album sales vs/ per track, I think this has as much to do with the fact that many songs are available only as album sales as any other factor.

Don't get me wrong, I wish Apple the best in this endeavor, but basically the business is on a $50 million (top line) run rate, which is a small drop in the bucket for a company which does billions in revenues. Yes, the margins on this business are higher than hardware, but it''ll have to grow monumentally to make a material difference to Apples bottom line.

TM

Of course the "curiosity" factor is going to mean that initial sales are higher. 2 weeks are not indicative of the long term success of the store.

Also, the iPod2 release has meant a huge increase of sales for Apple. One can't discount what the tie in means for hardware sales and therefore much more profitability.

Ugg

May 15, 2003, 01:42 AM

Originally posted by Mudbug
I think that should be 1.1498 dollars. ;)

otherwise, I'm investing in foreign currency now.

Ummm, only in America would you be correct. To the rest of the world 1.000,00 is correct.

Ugg

May 15, 2003, 01:52 AM

I think that Apple is going to have a huge ad campaign later this year. The last big one was the new iMac and switch campaign. So many new things have come out since then but Apple has hardly made a peep. To me, that points to a big campaign before long. Maybe in August when the PPC970s are shipping and iTunes is available for Windoze. Also a big European campaign is probably in the offing, announcing the new Apple Stores and iTunes for Yrup.

Why else would they not be blowing their own horn with so many major changes?

mim

May 15, 2003, 01:59 AM

Originally posted by Ugg
Ummm, only in America would you be correct. To the rest of the world 1.000,00 is correct.

hehe, you're just as bad as them!

What you mean is "To Europe (excluding the United Kingdom but including some European wanna-be's) and some of our old colonies 1.000,00 is correct."

This is why >localisation< (or localization if you're in the states) is an important part of dealing with other nations that American companies have only begun to appreciate in the past few years.

The most famous example is the "Coke is Life" Japanese advert actually translating as "Coke brings your ancestors back from the dead".

Trimix

May 15, 2003, 03:39 AM

over here in europe, apple and the music store were the subject of many news programs on tv. in switzerland we can watch german, swiss, french, italian and austrian programs and i have seen it mentioned on many a station.
moreover every decent magazine, from business to general interest has covered the subject in more than a polite one-liner.
newspapers gave the subject a lot of space too, so that i would say, apple got the hype almost free of charge.
that is what counts - free publicity -
when the things rolls out here then the mac faithfuls will pounce and europe will ROCK :)

tduality

May 15, 2003, 04:33 AM

Originally posted by Phil Of Mac

It might be taxes. I think other than taxes, prices should be, and probably will be the same all over.

Don't think so. VAT in Switzerland is 7.6%. That's almost the same in US, isn't it?

I think prices are higher around here because the market accepts it. I don't expect the music industry to let that extra profit go.

Trimix

May 15, 2003, 05:03 AM

i feel it has more to do with purchasing power than with taxes, but what do i know ;)

Jerry Spoon

May 15, 2003, 06:39 AM

I just saw my first iTMS commercial last night during West Wing (great season finale by the way!) and I asked my wife - who isn't a huge mac fan, but uses ours at home - what she thought of it. She basically had a bunch of questions about what it was and how it worked. Being curious about it is a good thing, but not having enough info and not being intrigued enough to go to Apple's web site isn't. I hope her reaction to the commercial isn't the typical response and Apple had a noticiable increase of hits last night b/c of those ads running. Time will tell.:confused:

GulGnu

May 15, 2003, 06:40 AM

"Uh... 1 in 20 people in the US that own a computer today..."

Well, actually, it's even less, as not all Mac users have OS X 10.2.

Regards / GUlGNu

nebben123

May 15, 2003, 07:22 AM

Originally posted by nuckinfutz
So I assume then you don't use any P2P software for Music?

You are correct, I do not. I listen to a lot of non-mainstream music. The Pixies, Air, Throwing Muses, Kruder + Dorfmeister, Pavement, +/-, Boards of Canada, Superchunk, Cat Power, Gang of Four, Spoon, etc to name a few.

And while I probably could find it online (illegally), I actually prefer to support the artists.

However, 99c a track when there is no physical medium, no distribution costs, and the quality (relatively) sucks... it's too much. At 50c a track and 256k AAC, I would do it.

Trimix

May 15, 2003, 07:25 AM

So it is 1 out of 20 in the U.S. MINUS the people without broadband MINUS the users on OS9, MINUS the users who have the mac set-up in the office only, MINUS those who have not heard of it yet.

Looks like a huge untapped potential in the U.S. alone - now imagine select European countries to be added, or Australia for that matter

Merill you are dead dead dead (Looks like I am becoming a Merrill hater :D )

dongmin

May 15, 2003, 11:42 AM

Originally posted by theFly
[B]Here's a bit (http://cbs.marketwatch.com/news/story.asp?guid=%7B4FCADACC%2D0FF6%2D4BE5%2D8157%2DA5AA0D7A2D54%7D&siteid=mktw) to tantilize the possibility of the Windows potential for the iTMS:

...

I believe they are talking about Apple's share of the sales being $20 million, which is roughly $1 billion per year revenue from the service, if that weekly sales averages across a year.

Since Apple makes roughly a third from the sales, $20 million is $67 million gross sales per week.B]

They say $20 mil in sales for Apple, which is pretty clear in meaning $20 mil gross revenues for Apple. That means $1 bil in revenues for the year. 65% goes to the record companies, so Apple's cut is $350 mil a year. Apple hasn't revealed its costs, but I would guess something like $50 mil. So Apple's net profit comes out to roughly $300 mil a year. Not bad for a side business.

jxyama

May 15, 2003, 12:22 PM

1.000,00 is not correct for "the rest of the world." Japan follows the same convention as the U.S., i.e. 1,000.00. Of course, the way Japanese label the number is messed up anyway because Japanese (and Chinese also, I believe, maybe Korean too) count the number by ten thousands, not thousands. 10,000 (or 10.000 in Europe :D) is ten-thousand in the U.S. (and elsewhere) but it's one-"ten-thousand" in Japan.

Anyway, in Japan, the domestic versions of albums, which are priced higher for whatever the reason, often contain extra tracks to protect themselves from the imports priced cheaper. For example, back in the day, I bought Pearl Jam's Ten in Japan because I lost the one I bought in the U.S. The Japanese one, which costs nearly $30, contains one extra track compared to the U.S. version.

Trimix

May 15, 2003, 12:37 PM

in reply to jxyama

i do not know the prices in the U.S. but would that album have been around $13 in the shop ? if so you paid $17 for one extra track ?
oh my and some of us are griping about 99 cents ;)

robbieduncan

May 15, 2003, 12:50 PM

Originally posted by GulGnu
"Uh... 1 in 20 people in the US that own a computer today..."

Well, actually, it's even less, as not all Mac users have OS X 10.2.

Regards / GUlGNu

iTunes 4 will run on 10.1.5. Not sure about Quicktime 6.2 though...

frinky23

May 15, 2003, 01:34 PM

Originally posted by tduality
Don't think so. VAT in Switzerland is 7.6%. That's almost the same in US, isn't it?

I think prices are higher around here because the market accepts it. I don't expect the music industry to let that extra profit go.

Yeah, more or less. Sales tax in the US varies on location. In some states, it is zero. In others, it is higher. And to make matters more confusing, some states allow cities and counties to impose additional sales taxes, and the product you buy and the intended use changes the tax rate. For example, in the city next to mine, if you buy a meal at a restaurant and eat it inside the restaurant, the tax is something like 8.75%. However, if you ordered the meal to go and took it home, the tax would be 9.25%.

One major difference here in the states is that prices are listed without tax included. So if I downloaded a song, I would pay $0.99 plus the applicable tax (which Apple will calculate for me based on my address - this is part of the reason they need an address to use the service).

herr_neumann

May 15, 2003, 05:48 PM

Anyone else wonder how many of these tracks have been bought by Jobs or other apple folks? I mean what is droping a million bucks on music down loads when it makes the stock climb $5 a share? And it sure has impressed the music industry folks..... Just a thought.

Ugg

May 15, 2003, 05:58 PM

Originally posted by herr_neumann
Anyone else wonder how many of these tracks have been bought by Jobs or other apple folks? I mean what is droping a million bucks on music down loads when it makes the stock climb $5 a share? And it sure has impressed the music industry folks..... Just a thought.

I have wondered that. Also, do Apple employees get discounts? Free Music? It does really seem though that even Apple is honestly amazed at the popularity of the service.

MacKid

May 15, 2003, 08:40 PM

Originally posted by frinky23

One major difference here in the states is that prices are listed without tax included. So if I downloaded a song, I would pay $0.99 plus the applicable tax (which Apple will calculate for me based on my address - this is part of the reason they need an address to use the service).

They also need the address for the. . .um. . .credit. . .card. . .;)

JGowan

May 16, 2003, 12:35 AM

I bet Steve Jobs sat down and had one hellava hardline talk with everyone of the people who has access to the AAC files that they are ripping and putting online. I bet he would fire VP Phil if he found that Phil was offloading AAC files onto a fat portable 200GB HD.

Oh... and you just know that someone eventually will and BAM.... BUSTED!! and then, BAM.... FIRED!

FlamDrag

May 16, 2003, 12:48 AM

FWIW:

I just saw my first commercial on TV for applemusic.com

A female young adult african-american singing "I'll be there."

Tag: Any song you want for 99c
Tag: AppleMusic.com

Nick@Nite during Cheers

MacQuest

May 16, 2003, 01:09 AM

Originally posted by FlamDrag
FWIW:

I just saw my first commercial on TV for applemusic.com

A female young adult african-american singing "I'll be there."

Tag: Any song you want for 99c
Tag: AppleMusic.com

Nick@Nite during Cheers

Me too.

The same little boy reciting Eminem's lyrics, but NOT the original verse that SJ showcased at the iTMS keynote where the kid curses [...rap $h!t...].

I was wondering if they would catch that before it aired.:p

Comedy Central during SouthPark @ 9:30pm.

Snowy_River

May 16, 2003, 01:27 AM

They seem to be marketing the iTMS fairly aggressively. I've seen these commercials a few times already. They're cute, and simple. I hope that it works.

(I imagine, though, that there will be a number of Windows users that think 'hey, cool', go to the site, and get pissed because it's Mac only right now.)

Trimix

May 16, 2003, 01:55 AM

apple employees stealing music ?
any more dirt on this ?

btw, saw on reuters that some people use i-tunes to swap music illegally and apple frantically trying to plug the holes - any info anybody ?

what surprised me was the reaction of the big 5, where unnamed sources were quoted as saying that this was just a minor flaw and that the overall success outweighed the few inconveniences...
have they licked blood or what ?

dongmin

May 16, 2003, 05:06 AM

Originally posted by herr_neumann
Anyone else wonder how many of these tracks have been bought by Jobs or other apple folks? I mean what is droping a million bucks on music down loads when it makes the stock climb $5 a share? And it sure has impressed the music industry folks..... Just a thought.

I hope you're joking. It would be a MAJOR securities fraud.

jxyama

May 16, 2003, 03:31 PM

If Jobs actually inflated the iTMS sales figure by dropping his own $$$, the market would know. In order to benefit from the rise in the stock prices, he would have to sell the stocks. When major shareholders like CEOs would try to unload the stocks, they come under pretty heavy scrutiny. Or at least they are supposed to. :D

Yeah, I guess I paid $4 to get the extra track, effectively.. But you see, I was vacationing in Japan. I had some yen to burn. Plus I grew up in Japan so I don't convert to dollars each time I buy stuff in Japan. I have my own scale in yen for what's expensive and what's not. I was a little more frugal when I was in Switzerland because I didn't have my own personal Swiss Franc scale so I had to convert to dollars to get a sense of how much things are...

If above didn't make sense, sorry... I hope it does to some people. It's weird, but it's true. (Plus if you compared prices in Japan to the U.S., you wouldn't be able to go anywhere or have much of a life.)

Phil Of Mac

May 17, 2003, 12:59 AM

Originally posted by tduality
Don't think so. VAT in Switzerland is 7.6%. That's almost the same in US, isn't it?

I think prices are higher around here because the market accepts it. I don't expect the music industry to let that extra profit go.

VAT in the US is non-existent.

However, sales tax (which is shown as a separate charge and not part of the price of the product, because we Americans don't like hidden taxes) varies from state to state. Generally, if you buy from one state, from another state, online, there's no tax. So only residents of California would pay tax for Apple music.

Also remember that corporate income taxes and personal income taxes vary in other countries, and are reflected in prices.

Trimix

May 17, 2003, 03:03 AM

jxyama - it makes perfect sense to me -
:D

visor

May 17, 2003, 03:39 AM

Originally posted by mara
"
I think that one of the biggest problems is taxes. For example every European country have their own VATs. Maybe it is not a problem but I really hope that if iTMS launches in Europe, it´ll not be more expensive than in USA. We are paying 499 euros for the 15 gig iPod. At the monent with one euro you get 1,1498 dollars.

Well, it's no problem then, right? Just say its 99 eurocent including tax - with the dollar dropping so quickly, providers (apple Music industry etc) will still get a hell of a bargain out of it.

visor

May 17, 2003, 03:48 AM

Originally posted by chewbaccapits
No kidding...I mean, no one complains how those crappy mp3 sound when they're free, but complain that the better format (AAC) sucks. Isn't this format better than what the competition was or is selling?

Well, mp3's aren't free, they are copies of the cd's you bought, and you can encode them anyway you want to ;)

However, most of the time I don't notice any difference between CD and mp3. I couldnt yet test the Applestore Music apart from the 30s prelisten and it was ok for pop music. I'm not sure if I'd want to buy Classic music encoded like this. Check out the Wagner trailers ;)

Snowy_River

May 17, 2003, 04:18 AM

Originally posted by Phil Of Mac
...Generally, if you buy from one state, from another state, online, there's no tax. So only residents of California would pay tax for Apple music....

This isn't true. For some time now, all states have asked internet sales companies to keep track of where the sale is being made to, and charge the appropriate amount of sales tax for it. Most internet companies still aren't doing this for legistical reasons (keeping track of what the sales tax in all of the various cities, counites, states, etc. are; reporting the sale to the proper authority for that state; and so on). Many states are now looking into making it law that all internet companies must keep track of sales tax. There is concern that this could drive a number of companies out of business due to added overhead.

However, where iTMS is concerned, they are already following these practices. No matter where you buy from, you pay the sales tax of your home. (i.e. the home that your creditcard statement gets mailed to.)

visor

May 17, 2003, 05:15 AM

Ugg

May 17, 2003, 07:09 AM

[i]
It seems to be quite a mess right now. [/B]

I agree with you on that one. As far as I understand if I order from a vendor that has a physical location in the state I live then I have to pay sales tax on that purchase. Say I order from REI.com. Even though the product comes from the Washington State warehouse of REI, since REI has stores in CA, I have to pay sales tax.

Phil Of Mac

May 17, 2003, 03:23 PM

Originally posted by Snowy_River
This isn't true. For some time now, all states have asked internet sales companies to keep track of where the sale is being made to, and charge the appropriate amount of sales tax for it. Most internet companies still aren't doing this for legistical reasons (keeping track of what the sales tax in all of the various cities, counites, states, etc. are; reporting the sale to the proper authority for that state; and so on). Many states are now looking into making it law that all internet companies must keep track of sales tax. There is concern that this could drive a number of companies out of business due to added overhead.

However, where iTMS is concerned, they are already following these practices. No matter where you buy from, you pay the sales tax of your home. (i.e. the home that your creditcard statement gets mailed to.)

Ahh, yes. This is based upon the theory of "use tax", which says you still have to pay Washington sales tax for making purchases in tax-free Oregon. I'm not a lawyer, but to me, use tax reeks of bogusity. The government of Washington State has no jurisdiction in Oregon, where I am making the purchase. The only place they have the jurisdiction to tax me is when I am passing into Washington, at which point it would techinically be an "import duty". All good and well, except it is unconstitutional to place import duties at state lines. So if you do have to pay that tax, it's utter BS.

Wry Cooter

May 17, 2003, 05:42 PM

Originally posted by Phil Of Mac
Ahh, yes. This is based upon the theory of "use tax", which says you still have to pay Washington sales tax for making purchases in tax-free Oregon. I'm not a lawyer, but to me, use tax reeks of bogusity. The government of Washington State has no jurisdiction in Oregon, where I am making the purchase. The only place they have the jurisdiction to tax me is when I am passing into Washington, at which point it would techinically be an "import duty". All good and well, except it is unconstitutional to place import duties at state lines. So if you do have to pay that tax, it's utter BS.

I think it is the lesser ************ than that we would be going through, and paying representatives to go through 'on our behalf' that the "physical presence in a state = sales tax for you bub" was put in place so quickly and with relatively little fuss. Because, believe you me, the alternative they were trying to put in place otherwise was a total ban on internet sales altogether. All that has happened has that the laws have been extended from mail order rules, to web ordering.

You going to bitch and moan about taxes, you might as well bitch and moan about musicians getting a royalty for their songs... go back to your peer to peer pirate network if you don't like paying the piper

Snowy_River

May 17, 2003, 06:26 PM

Phil Of Mac

May 17, 2003, 08:35 PM

Originally posted by Wry Cooter
I think it is the lesser ************ than that we would be going through, and paying representatives to go through 'on our behalf' that the "physical presence in a state = sales tax for you bub" was put in place so quickly and with relatively little fuss. Because, believe you me, the alternative they were trying to put in place otherwise was a total ban on internet sales altogether. All that has happened has that the laws have been extended from mail order rules, to web ordering.

You going to bitch and moan about taxes, you might as well bitch and moan about musicians getting a royalty for their songs... go back to your peer to peer pirate network if you don't like paying the piper

People who use peer to peer networks are cowards who don't have the courage to shoplift. They are thieves, but they are also cowards. Shoplifters may be thieves, but at least they aren't in denial about it.

Taxes are another form of thievery, or to be more precise, extortion. We accept taxation as an alternative to anarchy, but paying one's taxes is still nothing more noble than a surrender to an extortionist. Paying musicians a royalty is compensation and payment for a product received.

Frankly, if you're unable to make that distinction, I'm not surprised you didn't catch the finer points of what I said about use tax. If I'm physically shopping in Jantzen Beach, Oregon, where there is no sales tax, Washington doesn't have the legal authority to collect a tax from that transaction. Likewise, if I am online, shopping from an online store in Oregon, Washington still doesn't have the legal authority to collect a tax, because we have things known as "laws" and a "Constitution" that prevent that. Aware as I am that you probably slept through your high school civics class, I can't blame you for your ignorance, but I must still point it out.

Originally posted by Snowy_River
No, that's backward. What I was talking about was if you live in Washington but buy from a company in Oregon, they are supposed to collect the appropriate sales tax from you and send it to Washington state.

I don't think the state government of Washington has the legal jurisdiction to impose taxes in Oregon. If I buy from a company in Oregon, there's no Oregon sales tax, so there should be no tax on the purchase. If Oregon wants to, they could tax me. They could very well send the money to Washington. But that's up to Oregon to decide whether or not to do that.

If I bought from a company in California, they may well tax me, and send the money to Sacramento--just like if I travelled there myself.

I think for a long time there was a federal moritorium on taxing the Internet. That must have expired. In any case, paying taxes is not what I'm questioning here. What I'm questioning is the legal authority of one state to collect taxes inside another state. There is no such authority. Washington's jurisdiction ends on the Oregon border. The only way they could tax Oregon-bought goods would be with an import duty, which is expressly unconstitutional.

If you can't understand ideas like "jurisdiction", "constitutional", or "legal authority", you have no standing to enter this conversation. However, if there's anyone here with some sort of legal knowledge or training, I would like to hear about whether or not my analysis is valid. I guess I'm asking if there's a lawyer around here, and failing that, a law student or educated citizen.

Ugg

May 17, 2003, 08:49 PM

Originally posted by Phil Of Mac

Taxes are another form of thievery, or to be more precise, extortion. We accept taxation as an alternative to anarchy, but paying one's taxes is still nothing more noble than a surrender to an extortionist. Paying musicians a royalty is compensation and payment for a product received.

.

First, where in the Constitution does it say that one state cannot collect taxes from the citizens of its state for purchases they bring back into the state?

Taxation has existed in one way or another for centuries so I fail to see why you are bitching so loudly about it. Unless of course you don't use any public services whatsoever or would prefer to establish your own private city-state where you can reign supreme. If that is the case then you are free to jump ship anytime you want.

Phil Of Mac

May 17, 2003, 09:19 PM

Originally posted by Ugg
First, where in the Constitution does it say that one state cannot collect taxes from the citizens of its state for purchases they bring back into the state?

Article I, Section 10:

No state shall, without the consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolitely necessary for executing its inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasure of the United States; and all such Laws shall be subject to the Revision and Control of the Congress.

Again, any tax on Oregon-purchased goods returned to Washington would be an import duty. Even if Washington wanted to collect one, they only could if Congress let them, and then they'd have to give the money to the US Treasury, and not keep it themselves.

The entire issue of states putting duties and tariffs on each other is a major reason why we replaced the Articles of Confederation with the Constitution.

Originally posted by Ugg
Taxation has existed in one way or another for centuries so I fail to see why you are bitching so loudly about it. Unless of course you don't use any public services whatsoever or would prefer to establish your own private city-state where you can reign supreme. If that is the case then you are free to jump ship anytime you want.

My specific complaint is not with taxation, but rather with unconstitutional taxation. The entire idea of the Constitution is that since we need government, we ought to restrict what government can do. As Thomas Paine wrote, "Government is at its best nothing but a necessary evil; at its worst, an intolerable one." It is the job of the Constitution to keep government at its best. Taxation is a form of that necessary evil, but is restricted by the Constitution to keep it from degenerating into that intolerable one.

For the record, I believe there are ways to finance a government without extortion, but that is outside the scope of this conversation.

Ugg

May 17, 2003, 09:31 PM

Originally posted by Phil Of Mac
Article I, Section 10:

Again, any tax on Oregon-purchased goods returned to Washington would be an import duty. Even if Washington wanted to collect one, they only could if Congress let them, and then they'd have to give the money to the US Treasury, and not keep it themselves.

The entire issue of states putting duties and tariffs on each other is a major reason why we replaced the Articles of Confederation with the Constitution.

What you are referring to is interstate commerce when what the Constitution is referring to are imports and exports. Meaning that anything that is imported into or exported from the United States. It is not totally clear, I admit, but they state that inspection fees can be charged but all duties and taxes are to go to the US treasury further indicating foreign trade not domestic. Methinks you are reading too much into too few words.

Snowy_River

May 17, 2003, 09:44 PM

While I'm not a lawyer, my father is a certified public accountant, so I know a little bit about taxes, and have access to even more knowledge, if need be.

The problem with your argument is the claim that taxing you on a purchase made in Oregon would be an import duty. That's simply not the case. The state would not be charging you money to bring the item in, but, rather, they would be charging you money to make the purchase. Strictly speaking, if you bought a car in Oregon, always operated it in Oregon, but registered it in your name (as a legal resident of Washington), you'd have to pay sales tax on the purchase, even if the car never entered into the state of Washington. The difference is that the state isn't taxing items (import duty), it's taxing its citizens.

Now, Oregon has no sales tax. Does that mean that they aren't getting money from taxes? Of course not. Oregon chooses to tax its citizens on the receiving end, in other words, income tax. And it doesn't matter where that income is made, either. (I know this from personal experience during a time that I was working for a company in Spokane, WA while I was a legal resident of Oregon, I still had to pay Oregon state income tax, even though I was temporarily living out of state.)

So, I guess I'm suggesting that looking at these taxes as taxes on things is wrong. You should look at them as taxes on you, and your behaviors (i.e. spending practices).

Phil Of Mac

May 17, 2003, 09:49 PM

Originally posted by Snowy_River
While I'm not a lawyer, my father is a certified public accountant, so I know a little bit about taxes, and have access to even more knowledge, if need be.

The problem with your argument is the claim that taxing you on a purchase made in Oregon would be an import duty. That's simply not the case. The state would not be charging you money to bring the item in, but, rather, they would be charging you money to make the purchase.

OK, that's the other problem. The purchase is made in Oregon. Oregon is outside the jurisdiction of the Washington state government. That's like saying if gambling is illegal in California, and I gamble in Nevada, the CHiPs can arrest me. A state can't tax, regulate, or ban anything that happens outside the state. That's what jurisdiction means.

Originally posted by Snowy_River
Now, Oregon has no sales tax. Does that mean that they aren't getting money from taxes? Of course not. Oregon chooses to tax its citizens on the receiving end, in other words, income tax. And it doesn't matter where that income is made, either. (I know this from personal experience during a time that I was working for a company in Spokane, WA while I was a legal resident of Oregon, I still had to pay Oregon state income tax, even though I was temporarily living out of state.)

Yes, I'm aware Oregon has an income tax. I'm not certain about the jurisdictional issues on that one either.

Originally posted by Snowy_River
So, I guess I'm suggesting that looking at these taxes as taxes on things is wrong. You should look at them as taxes on you, and your behaviors (i.e. spending practices).

But if those behaviors take place outside the state's jurisdiction, the state has no authority to tax those behaviors.

Snowy_River

May 17, 2003, 09:58 PM

Originally posted by Phil Of Mac
...
But if those behaviors take place outside the state's jurisdiction, the state has no authority to tax those behaviors.

Unfortunately, that's not how the law works.

In like manner, the US Government has authority to tax income made by US citizens who are abroad, even though that is 'outside their jurisdiction'.

I guess, what I'm trying to say is that by claiming citizenship you are placing yourself under their jurisdiction. The gambling analogy is flawed, as it generally states in such laws that 'gambling is illegal within the state boundaries'. Now, it would be possible for a state to pass a law that said that it was illegal for its citizens to gamble, and that would then apply, regardless of whether the person was within the state or not.

Ugg

May 17, 2003, 10:20 PM

I've just spent the last half hour searching for information on the subject and it's a mess.

Nowhere could I find anyone questioning the legality of states taxing their citizens on purchases made from outside the state via the internet or via a paper catalog. You're barking up the wrong tree here Phil.

The two solutions I can see that would work is to either institute a federal VAT to be added to every purchase and then be distributed to states, counties and localities. That would mean more federal government intrusion into states rights to tax their own citizens it would also be impossible to do so fairly. Hardly a popular solution. The other would be to entirely abolish the use tax and institute a strict income tax. In general, income taxes are much less regressive and therefore considered more fair.

The reality of the fact is that most states are going broke and are desperately searching for new sources of income. The internet purchase tax is likely to become a nationwide reality unless congress comes up with a solution. It is unlikely to do so.

Phil Of Mac

May 17, 2003, 10:52 PM

Originally posted by Snowy_River
Unfortunately, that's not how the law works.

In like manner, the US Government has authority to tax income made by US citizens who are abroad, even though that is 'outside their jurisdiction'.

I guess, what I'm trying to say is that by claiming citizenship you are placing yourself under their jurisdiction. The gambling analogy is flawed, as it generally states in such laws that 'gambling is illegal within the state boundaries'. Now, it would be possible for a state to pass a law that said that it was illegal for its citizens to gamble, and that would then apply, regardless of whether the person was within the state or not.

Aha. It's the state residency situation. Well, I guess my question has been answered.

Wry Cooter

May 17, 2003, 10:58 PM

Your state has no sales tax. You pay no sales tax.

Your state has sales tax, you buy web/mail order from company that has a store in your state, you pay sales tax, even if it is shipped from another state.

Your state has sales tax, you buy web/mail order from a company that does NOT have a store in your state, you do not pay sales tax.

If you live in a shack in a few acres in Montana you have declared independent territory and are guarding with shotguns, you do not pay any tax, but you don't receive many imported goods either.

scem0

May 17, 2003, 10:59 PM

It's good to see apple has hit a jackpot here...

now we just have to wait for MS and other companies to copy it. :rolleyes: :o ;)

Phil Of Mac

May 17, 2003, 10:59 PM

Originally posted by Ugg
I've just spent the last half hour searching for information on the subject and it's a mess.

Nowhere could I find anyone questioning the legality of states taxing their citizens on purchases made from outside the state via the internet or via a paper catalog. You're barking up the wrong tree here Phil.

Well, no, not quite. I'm just the first one to bring up the issue. And my question's been answered to my satisfaction.

If no one was ever the first one to bring up an issue, issues wouldn't be brought up.

Originally posted by Ugg
The two solutions I can see that would work is to either institute a federal VAT to be added to every purchase and then be distributed to states, counties and localities. That would mean more federal government intrusion into states rights to tax their own citizens it would also be impossible to do so fairly. Hardly a popular solution. The other would be to entirely abolish the use tax and institute a strict income tax. In general, income taxes are much less regressive and therefore considered more fair.

There has actually been a bill proposed to abolish the federal income tax and replace it with a sales tax (not a VAT, VAT's are horrible because they hide themselves). I suppose a federal sales tax could be used to make sales taxes uniform and to distribute to the states evenly. That's how Canada's GST works, I believe. Or they could have a national flat income tax redistributed the same way. But it really won't matter unless we do some serious reform of government overall. The problem isn't how we distribute the tax burden, it's the tax burden itself.

And there is no fair tax.

Snowy_River

May 18, 2003, 02:11 AM

Originally posted by Phil Of Mac
Aha. It's the state residency situation. Well, I guess my question has been answered.

Glad I could be of service. ;)

Snowy_River

May 18, 2003, 02:19 AM

Originally posted by Wry Cooter
Your state has no sales tax. You pay no sales tax.

Not quite true. If you are purchasing something to use in a state with sales tax, even if you are a resident of a state without sales tax, you are still required to pay the sales tax. For example, if you buy a meal in a restaurant, you have to pay the tax on that, regardless of your state of residence.

Your state has sales tax, you buy web/mail order from company that has a store in your state, you pay sales tax, even if it is shipped from another state.

Your state has sales tax, you buy web/mail order from a company that does NOT have a store in your state, you do not pay sales tax.

This is how it is now, due to the presence of a law prohibiting internet sales tax. However, this is not how the states want it to be, and the law is going to expire soon (end of the year?). If congress doesn't reinstate it, things could get messy. (Many small internet sales companies could be forced out of business due to the increase in overhead of keeping track of all the different sales tax amounts, and sending the appropriate tax to the appropriate state revenue offices.)

If you live in a shack in a few acres in Montana you have declared independent territory and are guarding with shotguns, you do not pay any tax, but you don't receive many imported goods either.

Yes, but you forgot to mention that you'd also be surrounded by FBI and ATF agents...

Phil Of Mac

May 18, 2003, 04:07 AM

Originally posted by Snowy_River
Yes, but you forgot to mention that you'd also be surrounded by FBI and ATF agents...

Not in Montana.

This actually happened in 1996, and since the Montana state constitution precludes federal agents from entering Montana in force without state approval, the FBI asked the Montana Highway Patrol to apprehend the tax resistors. The Montana Highway Patrol apprehended them without any loss of life or limb (unlike Ruby Ridge or Waco, both undertaken by FBI and ATF). They then billed the FBI for the costs of apprehending the suspects.

So, you'd be surrounded by Montana highway patrolmen :)

visor

May 18, 2003, 06:02 AM

Originally posted by Phil Of Mac

I don't think the state government of Washington has the legal jurisdiction to impose taxes in Oregon. If I buy from a company in Oregon, there's no Oregon sales tax, so there should be no tax on the purchase. If Oregon wants to, they could tax me. They could very well send the money to Washington. But that's up to Oregon to decide whether or not to do that.

Thats a strange theory you have there.
I'll tell you how sales tax is handled where I come from. It is quite simple really:
You pay the tax of the location you are when you buy it.
I think you'd agree on that one.
Now the Internet is a bit different, because there is no physical store, so you go and pay taxes of the state you live in (billing address you provide)
So if you sit in Texas and fill out your internet orderform - you pay Texan salestax, because that is where you performed the act of buying.
It doensn't matter where the Internet store is located, because you don't go there. To come around to apple:
Apple has its products manufractured in taiwan, would that mean I have to pay taiwan Salestax? No I don't do that.
Applestore Europe has it's headquaters in Cork, Ireland. Do I have to Pay irish salestax? No, I don't. All I pay is german salestax because that's where my billing address is.
So what Aplle does is collect the VAT, alias salestax from me, and forward it to germany.
This is not a great effort really, every company has to do that, and few die because of having proper -how do you call it?- booking? whatever.

daRAT

May 18, 2003, 07:55 AM

Funny, I just got the email for one of the 21 songs I purchased from Apple Music and saw the sales tax. In Maine our state tax form has a mandatory spot for sales tax from out of state purchases. Normally, for 41,000$ income this is about 25$. While not a lot of money, (this no way covers the purchases I make online), it still bugs me. What if I made no out of state purchases? I would still have to pay this, no way to get around it.

I am sure other states do this also, so how many of you want to bet once laws are passed that you have to be taxed on online purchases that the states will still "double dip" ?

Back to the Topic;

AppleMusic I give it * * * * * Five out of Five stars. Listening to the people bitch about the selection put me off, but after browsing the lists of artists I can't see why there is all the whining? I could have bought a hundred songs and still not been done. Found odd songs here and there, that I haven't heard in years, live versions of favorites that I haven't heard.

so "blah" to the whiners, and to Apple bring on the Windows client! :)