Saw this article at ars citing a Wall Street Journal article, which I haven't seen discussed here. http://arstechnica.com/news.ars/post/20051003-5381.html The past week has been kinda busy on the forums.
Comparing the first half of 2005 to the first half of 2004 revenue from downloads is up 350% while physical CD/DVD sales are down 6% (Only 3% in the number of units, which means the average price for a CD has gone down 3%).
The numbers give you a clue as to why the record execs think (wrongly IMHO) that raising prices would be to their benefit. The increased revenue from downloads almost, but not quite, made up for the downturn in CD sales, so obviously it needs to contribute more, let's raise the price.
I'd like to see a further breakdown of the download number into iTMS and the rest, but if you guess that Apple sold 80% of the pie (iPod's estimated market share), you come out with ~$640M which would be something like 100M tracks in half a year year, at the 0.99 rate (of which $0.65 is estimated to go the the labels). I guess I can buy that since they sold about 10M/week in the run up to 500M songs.
Simply amazing. That puts Apple in control of 5% of the major labels revenue. No wonder they're concerned.
B
Comparing the first half of 2005 to the first half of 2004 revenue from downloads is up 350% while physical CD/DVD sales are down 6% (Only 3% in the number of units, which means the average price for a CD has gone down 3%).
The numbers give you a clue as to why the record execs think (wrongly IMHO) that raising prices would be to their benefit. The increased revenue from downloads almost, but not quite, made up for the downturn in CD sales, so obviously it needs to contribute more, let's raise the price.
I'd like to see a further breakdown of the download number into iTMS and the rest, but if you guess that Apple sold 80% of the pie (iPod's estimated market share), you come out with ~$640M which would be something like 100M tracks in half a year year, at the 0.99 rate (of which $0.65 is estimated to go the the labels). I guess I can buy that since they sold about 10M/week in the run up to 500M songs.
Simply amazing. That puts Apple in control of 5% of the major labels revenue. No wonder they're concerned.
B
