Ad revenue, and increased iTunes sales will cover 90-110% of its operating costs, making it a slight loss-leader or slightly profitable, depending on which way the wind blows, but there will be no incremental cost to the hardware. Other way around, for Apple, this is just meant to make the hardware and Apple's overall ecosystem more appealing and to drive hardware sales.
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Apple's iTunes Radio Terms With Record Labels Revealed
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Ad revenue, and increased iTunes sales will cover 90-110% of its operating costs, making it a slight loss-leader or slightly profitable, depending on which way the wind blows, but there will be no incremental cost to the hardware. Other way around, for Apple, this is just meant to make the hardware and Apple's overall ecosystem more appealing and to drive hardware sales.
There are digital distributors, or "aggregators" as they're called, with which smaller artists or labels can send their music through to iTunes, Amazon MP3, Rhapsody, etc. Some of them charge a flat up-front fee to deliver, some take 20% of sales, some charge a hybrid of those two. The Orchard (www.theorchard.com) is the largest of them now, having gobbled up two competing aggregators in the past two years. They alone represent some 2-3 million independent tracks for sale.
There are trade-offs to signing with small label vs. going it on your own, or holding out for a major label. Each is a totally different pathway and experience, these days. Major labels have more swing for radio, and sometimes spend tens of thousands recording and promoting a new artist. There isn't an indie on the planet that can afford that -- but major labels also shelve new artists, basically hitting a contractual "pause button" on their careers making them ride out their whole contract term, essentially doing nothing. This happens a lot. Some small indies still give a crap, and work hard for their artists. They don't always get major label type shine, but it can be a slow and steady build towards more recognition, distribution, and a larger fanbase. Some small labels specialize as "springboard" labels, essentially getting an artist from Point A to Point B (or C) in their career... a springboard towards bigger and better things, if the artist can parlay what they get into more.
Going it alone has major advantages such as 100% creative control, ability to collect a larger percentage of revenues and maintaining ownership and/or control of copyrights to the music -- but your budget is exactly how much you want it to be, and comes out of your own pocket. Some artists can take a small nugget, and slowly grow it into something bigger and better, and make a decent living on their own, with no need for a label. Macklemore is a good example of a completely independent artist who managed to blow the **** up somehow, but that's an extremely rare case.
Things like Pandora Radio, iTunes Radio, Shazam, Rhapsody... any chance that people may have to stumble on their music accidentally, is a good thing. A good distributor or aggregator will make sure you get on as many outlets as possible, and will try to gain editorial coverage whenever possible, which is also rare.
Lots of options and decisions to make.
Many years ago when the iTunes Store started, Apple negotiated contracts with the four major labels. Identical contracts. They then offered the exact same contract to every label, no matter how large or small. They accept the contract or not, no negotiations. On the other hand, it's the contract that the best lawyers and negotiators of the four big labels agreed to, so they should be fine.
Any new iPhone bought because of this feature pays for about 100,000 songs played.
If you get bored of songs as easily as I do and constantly want new songs, that makes buying music unrelistic in terms of cost and in terms of storage, my iPhone only has 64GB! 17GB is already filled with Photos.
I am happy to pay for a music streaming service (just like a pay for netflix for my movies) - but local storage is become a thing of the past.
iTunes radio in Germany? Unlikely I'd say
Ah iTunes Radio, I can only dream of that!
Here in Germany we don't even have music on YouTube, it's blocked by GeMa, the German Music Association, so the idea that one day we will get the chance to stream music "for free" on iTunes Radio without GeMa taking their share seems very unlikely.
Fingers crossed that Apple and GeMa will strike a deal enabling consumers to enjoy the music that people in other parts of the world can.
As an aside, we still don't even have Google street view working across the majority of the country thanks to privacy concerns and youtube clips with music in the background are either banned, show the GeMa logo and nothing more or have their soundtracks completely replaced by something ludicrous. Google must hate the German authorities! Pandora is also blocked here although Spotify seems to be allowed in!
Ah iTunes Radio, I can only dream of that!
Here in Germany we don't even have music on YouTube, it's blocked by GeMa, the German Music Association, so the idea that one day we will get the chance to stream music "for free" on iTunes Radio without GeMa taking their share seems very unlikely.
Fingers crossed that Apple and GeMa will strike a deal enabling consumers to enjoy the music that people in other parts of the world can.
As an aside, we still don't even have Google street view working across the majority of the country thanks to privacy concerns and youtube clips with music in the background are either banned, show the GeMa logo and nothing more or have their soundtracks completely replaced by something ludicrous. Google must hate the German authorities! Pandora is also blocked here although Spotify seems to be allowed in!
Doing nothing?
Who's going to book the venues, make hotel reservations - world wide?
Who's going to haul around the equipment, drive the trucks?
Who's going to negotiate, look after the money?
Remember if you fail, you can lose millions of dollars.
Maybe Lars Ulrich does it in his spare time...
they give them money to record their music in a professional studio and advertise it. they plant stories on the internet about how this new cool band is breaking out, etc. and they book them on opening gigs with the label's other bands
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OMG, its like me having to wake up to go to work everyday. terrible
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not like bands just show up at some venue and play a show. a lot of people have to do a lot of work months in advance to make a tour happen
Going back?
Well, i still do that.
)I won't give Apple a cent for their lossy files.
Indeed, I really feel for these poor, struggling artists having to actually do some work. South park poked fun at this brilliantly a couple of years ago.
simple: by integrating it into the OS apple can make it more effective at selling iTunes content than Pandora could be.
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the two models aren't mutually exclusive. I pay my music, but I use a service like this (Pandora) to discover new music I'm likely interested in.
It's bloody ridiculous that anyone would have to pay anything to SKIP something the user doesn't want!
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I'm paying $4/month for Last.fm - can't get any better radio than that!
User generated tagging of music ensures better results when you choose to listen to 'similar artists'.
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I'm paying $4/month for Last.fm - can't get any better radio than that!
User generated tagging of music ensures better results when you choose to listen to 'similar artists'.
Because of this I find it interesting that apple has to pay than the rest for the same "service" (songs)
For the same reason Audi makes cars when BMW does a decent job of doing the same?
Just because the market has shifted and the industry hasn't, it isn't suddenly the consumers fault. The record labels are a dead weight. They are still living in the $15.99 CD days. Time to restructure.
Agreed!
We already pay more for our apple products and get less in return.
Apple TV, Siri, iTunes Radio, ...
If the artist writes his/her own stuff and self publishes, they get all of that 14 cents. If they get a million listens they make...$140,000 for one song. Even 1 cent times a million is $10,000. Every penny counts.
I'm sure Apple would love to roll out iRadio everywhere. Apple has everything to gain by making iRadio international. It's the content copyright holders that are the rate limiting step.
Brand awareness, exposure, catalogue size and response, something Apple can offer in bucketloads. This in turn will generate far greater revenue than anything all of the current competitors can offer.