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No what they are banking on is this explanation. Pandora is going out of business based on the prices for content you are charging them. So don't compare our offer to theirs, because theirs is a temporary illusion. Now Pandora and Spotify have special places in the marketplace with investor capital can be used to fund the companies at a loss, potentially for a few more years. But eventually that ends. Apple is suggesting that this is price point where a real company can come in and resell the content and make money.

However, this is a crushingly low amount of revenue for the content. Only a fraction of this would ever make it back to the artist creating the song. Even if you had a hit that got played, for example, 100,000 times in a year. The artist would probably do better setting up shop in the subway with a hat on the floor for a week.

So basically it is unclear that streaming even works as a business model.

I agree, streaming and subscription business models for music seem like money losers. People are simply not willing to pay what it actually costs to have access to everything all at once. Remember those Zune Pass advertisements? For what was offered back then, it was a great deal and still people thought it cost too much, and most still do.

For all the people crying about how artists get screwed and raped with these rates, don't blame the companies actually exploring new ways to sell and deliver music. Call it innovation, call it copying the startups, whatever. It's something the record companies aren't doing.

Instead of gasping at how little Apple is offering, how about you gasp at how high the percent the record labels take for themselves. Record companies today offer almost no service of that much value.

A band can hire an engineer to master their recordings, record at an independent studio, and digitally distribute themselves to the various online stores, and run a social media campaign, for a tiny fraction of the cost of a major record label. The only thing a band can't get elsewhere is a loan for all that.
 
Who doesn't use iTunes?

Beats having to hassle with another account like Spotify. Record labels will sign on to this for sure.
 
Ok - had to respond to this.. What??? Pandora is on every device (Apple or Android or Blackberry or Windows. PC or iMac, etc.....) however the Apple version would only be on Apple products?? Who would have the larger base?? :)

Pandora isn't on every device. Yes it's available for those devices but that doesn't mean that everyone installs it. Apple will have a much easier time bringing it to the masses than Pandora. People will be much more willing to pay for a service from Apple than Pandora. Only a small percentage of Pandora users pay for the service.
 
TallManNY has the best explanation: Pandora is operating at a loss paying $0.12/hundred, so obviously offering that (or more, like others operating as walking dead) is a non-starter. Around $0.10/hundred is the likely break-even point, and between seeking an actual profit & starting at a viable point for negotiations, $0.06/hundred is a good place to start. That's not "undercutting the market by a large amount", that's pursuing a viable business plan.

There's 2 numbers to this kind of equation and it's not 6 cents vs. 12 cents: they're both cost numbers. What is the revenue number?

How much does it cost for a Pandora subscription? That's either free (ad supported) or $36/yr (Pandora One).

How much do we think Apple will want from an "iRadio" subscription?

12 cents is "unprofitable" only if the revenue end of the equation is too low. Some in this thread appear to be fantasizing about "iRadio" being free. Why does Apple want to burn 6 cents or 12 cents per 100 songs streamed by many millions of iTunes/iDevice users? I have a hard time foreseeing a price of free or even near free if Apple is behind it. Might as well similarly fantasize about the much rumored "cable tv" killer service from Apple being free too. It's probably got just as good a chance of actually being free.

Some in this thread are also implying that radio will be some huge innovation. Really??? Radio??? We already have pandora, spotify, even radio channels in iTunes for free. Why will something branded iRadio be a huge innovation over what we already have? Just because Apple has stuck a brand (and an Apple price) on it? Suddenly the masses will love streaming radio more than all existing options?

Will radio really be a "game changer"? Why hasn't the existing sources of streaming radio already changed the game? Because they are not Apple... and Apple's version of streaming radio will be head & shoulders above every other option that has been available for years?
 
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Honestly, I don't care what Apple pays as long as the service is good and offers variety at a good value to us... the consumer.

Bring it on and more!

Haha- Walmart customer- no doubt.

Who cares what happens to the supply chain and whatever went down to get you your precious stuff cheap, right? Who cares how much Apple pays the workers in their Chinese factories? Who cares about the conditions in the mine in Africa where they found that pretty diamond thats on your wife's ring? Who cares how they got the pelt for that leather purse? Who cares how much the kids get paid in Bangladesh for making your designer jeans?

Who cares if the artists that work (yes, work) to create the music that you love even get paid at all? Bring on my STUFF!!

But just make damn sure nobody takes away YOUR job, right?

What if we could get what you do for a living for nearly free? Who cares if you get paid or not? Would you be mad about that?
 
Who doesn't use iTunes?

Beats having to hassle with another account like Spotify. Record labels will sign on to this for sure.

Well Spotify streams at higher quality than Apple sells you in their "high quality" store. So there is that. I only use iTunes as a library manager. I don't even use it for playback. I use Amarra through a ULN-2 DAC. I don't buy (I mean borrow) from iTunes either. I rip lossless and stream. There is no room for iTunes unless they stream in lossless. I would get into that if the right labels were involved.
 
I wonder if 6 cent per 100 songs is low enough so that Apple can afford to just make this available for free to all users of iDevices. In that case, it would be very little per song, but millions of millions of people who have the service available and can use it at no cost. And if it is streaming and no downloading, users would be limited to about 15 songs per hour or 0.9 cent per hour, so it would be cheap enough to offer for free.

Interesting point - would be cheap enough for Apple to offer it for free to everyone (or at least iPad/iPhone owners) at 6 cents per 100 songs. If on average everyone listened to 20 songs a day it would cost Apple under $5 per person per year. Would sell a lot of extra devices.

Only problem though, wouldn't this destroy music sales?
 
they're both cost numbers. What is the revenue number?
Good question. :apple: is not noted for low fees. A third number to consider is volume: a smaller margin (again, something :apple: is not noted for) is more tolerable when orders of magnitude more consumers are involved. :apple: taps a button, a new iStream-enabled version of iOS is released, 10,000,000 users sign up overnight where competitors spent years attracting a million.

How much do we think Apple will want from an "iRadio" subscription?
Sensible to think it will be part of the $24/yr iTunes Match: comparable to Amazon bundling services into its $80/yr Prime service, no-brainer signup cost, just high enough to keep the riff-raff out (so to speak) while making it easy to tie a hundred million users a little tighter to their iDevices and looking a little more forward to the next $X00 upgrade.

Some in this thread are also implying that radio will be some huge innovation.
We've had this argument several times before. iBooks was not "new"; Kindle, Nook, etc. were already well-established. iTunes was not "new"; charging $0.99/song in an age of flourishing "file sharing" seemed absurd. :apple:TV was not "new"; Roku, Hulu, Netflix, BIY torrent streamers, were obvious winners. Heck, the iPod itself was "No wireless. Less space than a Nomad. Lame."

The huge innovation will be delivering what customers actually want, not what a corner-cutting audience-selling typical marketing department wants - and having it "just works" for 50,000,000 people the first day it's turned on.
 
Music artists don't need to be millionaires. It's unfair to doctors who save lives on a daily basis or scientist who discover new things. I can go on with this.

Entertainment and sports are the most overpaid industry that provides nothing beneficial to the future of evolution.
 
20 songs a day it would cost Apple under $5 per person per year. Would sell a lot of extra devices.
Running 24/7/365 I figure it costs $79/year, so that's an absolute upper limit - and is still well within :apple:'s profit margin.

Yeah, that would increase sales; not a lot methinks (not a major deciding factor for most people prone to actually getting one), but certainly works in favor of keeping more people in the 'walled garden' longer.
 
Another year, another streaming radio rumor.

Originally, the record labels also screamed that iTune's $0.99 per song is too low of a price.

That wasn't the issue so much as being able to buy a single track. They were okay with a dollar a song when you had to buy all 12 to get the one you like
 
maybe i can actually use my iTunes Match i paid for again by then :mad: their stupid 90 days limit can beep off
 
No what they are banking on is this explanation. Pandora is going out of business based on the prices for content you are charging them.

Which suggests that in fact Pandora is paying too much.

As for this 'flexibility' that Apple is demanding who knows what it is and if it would really hurt the labels. For all we know they aren't looking to create Pandora or Spotify but to bring back Lala which would need more flexible rights than just randomly paying songs perhaps based off a user selection of a song, artist or genre. Or users being able to make a station based on 'I like pop songs sung by boys that don't know how to pull their pants up and wear a belt' and saving that choice.
 
Yes, then after that, Bieber needs to go away...far, far away.

I'm not a Bieber fan either but some of you guys here need to stop with all this laughable hate you have towards him. He can buy out MR and all of it's members and it would be like spending $5 to him. Let it go and accept, he's here. For how long, who knows? He became successful by luck of who discovered him but he's wealthy beyond means because he earned his money the smart way. Y'all may not admit it but most people wish they could be as successful as he is, especially the little time and effort it took.
 
Wow, so many people trash Walmart for try to get the lowest price for their products, yet it seems to be ok for Apple to try to undercut the market, by a large amount. Most artist are not in the financial league of Justin Bieber or Lady Gaga. This race to the bottom for compensation is not good for most artist, imo.

Apple, quite frankly, should have a royalty rate smaller than Pandora and those types. The iOS user base is much, much larger than what Pandora sees and the eyeball rate would increase dramatically, day one, once Apple gets this deal hashed out.

My guess is the number ends up being relatively higher than what they are asking for now but still a good bit lower than what those other services are paying.
 
Spoken like a true child labor law violator.

Wow... I thought we were talking about royalties for streaming music? I bet I kick puppies too? :rolleyes:

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Haha- Walmart customer- no doubt.

Who cares what happens to the supply chain and whatever went down to get you your precious stuff cheap, right? Who cares how much Apple pays the workers in their Chinese factories? Who cares about the conditions in the mine in Africa where they found that pretty diamond thats on your wife's ring? Who cares how they got the pelt for that leather purse? Who cares how much the kids get paid in Bangladesh for making your designer jeans?

Who cares if the artists that work (yes, work) to create the music that you love even get paid at all? Bring on my STUFF!!

But just make damn sure nobody takes away YOUR job, right?

What if we could get what you do for a living for nearly free? Who cares if you get paid or not? Would you be mad about that?

Wow.... people sure are testy today! :eek:

BTW... I do shop at Walmart... but also Norstoms, Lord and Taylor and Goodwill.:eek: Norstroms and Walmart both have very strict anti slave labor and child labor laws for their suppliers. Also... just so you know, I paid for all my music and I don't steal videos. I'm just saying.

Back to your judgmental and angry life... I'm going back to my good paying job. The one I earned.
 
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Wow... I thought we were talking about royalties for streaming music? I bet I kick puppies too? :rolleyes:

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Wow.... people sure are testy today! :eek:

In defense of you and other posters and their response..

I understand what you're saying (now) based on your last reply to me.

However - I am sure (not) you can see how what you posted came across. If it had been just me who knee-jerked we could write it off as maybe I misinterpreted. But since others called you to task on it - it was clearly the wrong choice of words.

Folks! He's not REALLY saying damn everyone else as long as he gets what he wants from Apple. :)
 
In defense of you and other posters and their response..

I understand what you're saying (now) based on your last reply to me.

However - I am sure (not) you can see how what you posted came across. If it had been just me who knee-jerked we could write it off as maybe I misinterpreted. But since others called you to task on it - it was clearly the wrong choice of words.

Folks! He's not REALLY saying damn everyone else as long as he gets what he wants from Apple. :)

Thanks.... but I really don't kick puppies! :D
 
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