Apple's Services Earned $78B in Fiscal 2022, Up $10B Year Over Year

[danny842003]

I had a good laugh when Tim said that some of the increase in the Apple Music price would be passed on to the artists. Maybe Taylor Swift, Adele, Ed Sheeran and the like will do all right. But unless they have millions (or billions) of streams, artists collect next to nothing from streaming services (which I guess is better than nothing at all). Physical media was far more profitable.

Was it though? I mean I never bought a CD for years because Napster etc were a thing.
I’m not saying that’s right but for most people that’s how they got music. With streaming people are actually paying.

 

[jayducharme]

Was it though? I mean I never bought a CD for years because Napster etc were a thing.
I’m not saying that’s right but for most people that’s how they got music. With streaming people are actually paying.

You’re correct — most people are now paying through a subscription model. But at an average of $.006 per stream, the money paid to artists doesn’t add up to much unless you have millions of streams.

 

[75Batt]

I think again, people confuse cause with effect.

TV+ increasing by 40% is in line with Disney+ doing the same. It also tells us that Apple is fairly pleased with subscriber numbers and is fairly confident that its expanding video catalogue will be effective in either retaining subscribers, or getting them to return in the future (in the case of people who switch between streaming services).

Same with music streaming. The real winner here is music labels (the main reason for the price hike). We will likely see the same move from Spotify in time. The reality is that Spotify has made us too accustomed to artificially low content streaming prices. In time, I expect prices to continue rising to more accurately the true costs and the value they bring to users.

What this tells us is that Apple believes consumers will continue to find value with their services and their profitability is a direct result of their ability to create great product experiences, and them not hesitating in charging what they believe is a fair price for the value these products offer.

Looking at their earnings, it’s hard to argue with the results. The Apple ecosystem is basically built around people who spend money, and everyone knows this.

I don't personally agree. The service margin is 70%, so Apple are making enough PROFIT from these, however they had to do something to make up for faltering growth. That extra will not go to musicians.

 

[75Batt]

With the trajectory of the growth in services declining, Apple has to correct that. Hence we see increased service prices and the introduction of Ads, although I think these are a short term fix. Unless they continue to grow TV+ library substantially through acquisition they need to look at new services and expansion of existing services into new markets. However, I would assume Apple realising that services can be dropped very easily by customers, so may tread carefully before introducing any new ones. Ads offer Appel less risk of financial failure than new services. I'd imagine they learned that from introducing all of those services at once, including Apple News+ which doesn't seem to be doing all too well.

 

[Confused-User]

I don't personally agree. The service margin is 70%, so Apple are making enough PROFIT from these, however they had to do something to make up for faltering growth. That extra will not go to musicians.

How deeply stupid.

Apple will get their cut, same as usual. Probably NOT 30% - I think it's been reported as being much lower for music streaming, but I don't care enough to do that research right now.

But the point is, the artists will get their percentage too, same as always. You can argue that it's way too small, and I won't disagree, but either way, some of that extra will be going to artists in the same proportion the existing money does.

 

[75Batt]

How deeply stupid.

Apple will get their cut, same as usual. Probably NOT 30% - I think it's been reported as being much lower for music streaming, but I don't care enough to do that research right now.

But the point is, the artists will get their percentage too, same as always. You can argue that it's way too small, and I won't disagree, but either way, some of that extra will be going to artists in the same proportion the existing money does.

Take your rudeness elsewhere. Apple have hugh enough margins, the point was Apple have never been transparent about actions they have taken to increase theur margins. So whilst licensing costs have increased, there’s nothing to say the increase will also add to their margins.

 

[compwiz1202]

They're about to lose at least one Apple One subscriber over that, so let's see if that gambit pays off. It was already barely justifiable at the current price.

Exactly everything but iCloud storage 200GB is canceled

 

[danny842003]

You’re correct — most people are now paying through a subscription model. But at an average of $.006 per stream, the money paid to artists doesn’t add up to much unless you have millions of streams.

I would say it’s much easier for smaller artists to reach a larger audience online than they would in physical media so I’m still not convinced it would be more profitable for smaller bands.
Either way I’m happy to pay a larger fee as long as it’s the artists who are seeing that.

 

[SFjohn]

I had a good laugh when Tim said that some of the increase in the Apple Music price would be passed on to the artists. Maybe Taylor Swift, Adele, Ed Sheeran and the like will do all right. But unless they have millions (or billions) of streams, artists collect next to nothing from streaming services (which I guess is better than nothing at all). Physical media was far more profitable.

i remember hearing from multiple sources that physical media only made profits for the record companies, artists have to tour to make real money for themselves.

 

[SoldOnApple]

EPIC are crazy to not want to be a part of this gravy train.

 

[jayducharme]

i remember hearing from multiple sources that physical media only made profits for the record companies, artists have to tour to make real money for themselves.

Yes, but when an artist was on tour physical media was a great source of profit. That avenue has been pretty much blocked off because of streaming.

 

[Unregistered 4U]

Yes, but when an artist was on tour physical media was a great source of profit. That avenue has been pretty much blocked off because of streaming.

But the more lucrative Patreon and other gifts avenue has opened up. I’ve been on streams where every few minutes, several hundred people provide large amounts of micro transactions for no other benefit than hearing the person read their name. A far better return on investment than physical media. 🙂

 

[SFjohn]

Yes, but when an artist was on tour physical media was a great source of profit. That avenue has been pretty much blocked off because of streaming.

A lot of people choose to own their music and not to rent it by streaming. I’m one of those. We go to concerts of our favorite artists and buy our CDs there. We purchase songs directly from iTunes if the data from our CD was ripped has become corrupted. If you’re a casual listener and want an alternative to radio streaming in the background I guess that’s fine. Personally I sign up for Spotify for a month every few years to see if there is new music I want to purchase and that’s it. 📀🔊🎼

 

[_Spinn_]

Impressive that services grew that much in a year.