iTMS Tops One Quarter Billion Songs Sold

MacRumors

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Apr 12, 2001
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In a press release Monday, Apple declared the number of songs sold from the iTunes Music Store has topped the 250,000,000 mark.
“When we launched the iTunes Music Store we were hoping to sell a million songs in the first six months—now we’re selling over a million songs every day, and we’ve sold over a quarter billion songs in total,” said Steve Jobs, Apple’s CEO. “iTunes is leading the way into the digital music era and together with iPod is changing the way millions of music lovers find and enjoy their music.”
 

garybUK

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Jun 3, 2002
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I didn't like the iTMS at first but now i use it all the time, I have found sooo many new tracks I didn't think I liked, the best thing is as well, you can get those older songs you wouldn't usually find elsewhere, it's great!

100 songs including 3 albums in the last 2 months! iTunes essentials is fantastic... Much, Much, Much, Much, Much better service than Napster
 

miloblithe

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Nov 14, 2003
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They declared last quarter that the music store was turning a small profit, but as my accountant wife points out, such a statement is not really all that meaningful. Either way, it is clearly part of the larger picture for Apple. This is a key year: can iTunes and iPods push Mac sales? If not, the darling of investors phase will slow if not end.
 

jncrow

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Nov 5, 2003
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I have helped with that about 100 times now. I like the fact I can buy the song not the entire album with the other songs I don't care for. Way to go apple selling like "hotcakes" now.
 

Zaty

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Mar 14, 2004
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Great, but Apple, please, don't forget the remaining 30% of the Music market. There are still many potential iTMS customers who would love start spending money at iTMS but so far haven't got a chance to do so.
 

pigbat

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Jan 18, 2005
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Redpoetsociety said:
yes but are they turning a profit?

The profit is pennies per song but those pennies add up. These numbers give Apple some power with the industry to keep prices where they are and possibly negotiate for discounts.
 

Abstract

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Dec 27, 2002
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Well of course they're selling songs faster and faster. Its not like they only have one store anymore. They have lots of stores in different countries now. It's a no-brainer that they would have sold songs faster than at the pace they listed. How much have sales at the US store increased last year? Last quarter?

As of right now, I don't know anybody who has ever bought a song online. So while Apple is ace in a very small market, when the market gets bigger and lots of people buy music online, I hope they manage to fend off the competition and stay on top. :) Maybe I'll be their next customer. Of course, I'm moving to Australia again, so expand there!!! :eek:
 

roadapple

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Oct 21, 2004
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maelstromr said:
I think so, but even if not ITMS wasn't designed to be profitable, it was designed to support and augment the iPod, which has been immensely profitable!
I can't help but think it's the ipod that is supporting the development of the iTunes store music store, and that iTunes will soon (2-3 years) become a huge brand for online content purchases of all types. The ipod is not going away, but it will be greatly overshadowed with new changes to the online store. The real money is in selling the content, not the players.
 

fixyourthinking

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Oct 24, 2002
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pennies per song

pigbat said:
The profit is pennies per song but those pennies add up. These numbers give Apple some power with the industry to keep prices where they are and possibly negotiate for discounts.
I tried to get an idea of exactly how much this meant so I could gauge how other stores could POSSIBLY be profitting.

Apple's COST of running the ITMS is about $13 million a year - this includes ongoing development/licensing/server bandwidth/etc

Apple pays about 71 cents to the RIAA/artists for each song.

It is estimated Apple pulls in about 13 cents a song. So, after expenses they make about 3 cents a song. (After a little complicated math)

If this is correct they have made about $750,0000 (less than a million) off the store so far.

As other posts have pointed out - the iPod is the 316 million dollar money maker thus far
 

macnews

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May 12, 2003
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Redpoetsociety said:
yes but are they turning a profit?
Yes, iTunes IS profitable. This comes directly from some inside contacts I have at Apple - yes, really inside Apple. Apple planned on the iTMS NOT being profitable for the first few years, or possibly ever. They saw it as a key part of selling iPods and the halo effect.

What has happened, however, if the economies of scale. They make a little more than "a few" pennies per song but selling a million songs a day makes all those pennies add up. If there is anyone who knows how this works it would be Dell. Funny why Dell would dismiss the iPod as a fad. Guess they just don't get the iPod/iTMS connection.
 

Veldek

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Mar 29, 2003
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adzoox said:
It is estimated Apple pulls in about 13 cents a song. So, after expenses they make about 3 cents a song. (After a little complicated math)

If this is correct they have made about $750,0000 (less than a million) off the store so far.
Last time I checked 0.03 * 250,000,000 = 7,500,000. So, it’s a lot more than one million.
 

fraggle

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Jun 10, 2003
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adzoox said:
It is estimated Apple pulls in about 13 cents a song. So, after expenses they make about 3 cents a song. (After a little complicated math)

If this is correct they have made about $750,0000 (less than a million) off the store so far.

As other posts have pointed out - the iPod is the 316 million dollar money maker thus far
If the 3 cent numberis correct that makes $7.5 million which might not be much compared to the sums they earn with the iPods but on the other hand as other people have pointed out iTMS is meant to sell iPods! And then making a healthy amount itself is not too bad I would say.
 

SiliconAddict

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Jun 19, 2003
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maelstromr said:
I think so, but even if not ITMS wasn't designed to be profitable, it was designed to support and augment the iPod, which has been immensely profitable!

Well the key thing is that as long as Apple isn't LOSING money on iTMS (This includes overhead like server cost, power, bandwidth, backups, customer support, etc as well.) then its all good. To state the obvious. Bleeding money from iTMS would be a BAD thing.
 

Veldek

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Macmaniac said:
This is great, I hope they can reach half a billion this year.
Lets hope Apple can expand iTMS into new markets especially Asia.
At the recent rate of about 8,750,000 songs per week they reach about 670,000,000 songs at the end of the year. And this is without the new Pepsi promotion.
 

macnews

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fraggle said:
If the 3 cent numberis correct that makes $7.5 million which might not be much compared to the sums they earn with the iPods but on the other hand as other people have pointed out iTMS is meant to sell iPods! And then making a healthy amount itself is not too bad I would say.
Exactly, not only can they pay for R&D but it allows them to go down other roads with the store. You also have to remember that the 250 million is total since the store opened, thus the $7.5 million is since conception not a yearly total. Still, the volume is growing and that is key to allow the store to grow as well. Soon iTMS will be making $7.5 per year and more.

Even though I would love to have 7.5 mil/year it isn't a lot in the greater picture of Apple. I do wonder, however, how Napster and some of the others stay in business - or how long they will stay in business. It is certainly possible they have similar costs and are using all of the same 13 cents per song (approx since they also have subscriptions) to stay attractive to investors. Still, it takes significant more money to KEEP subscribers (made more difficult by the popularity of the iPod) than just to offer an ala carte service like iTMS.
 

Raid

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Feb 18, 2003
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Certainly a milestone...but

Well I hope Apple won't rest on their laurels for too long. While this is a great achievement and shows that there is a market for legitimate downloaded music, I know that number (in terms of my personal purchases) would be higher right now if the song availability across all music stores would be the same. Right now it appears that Apple is either tied up in legal matters that prevent certain songs from being offered in other countries and/or is operating under the false assumption that tastes in music are dependant solely on the country of residency.

I fail to see why certain songs/artists are available in one countries iTMS, yet not available in another. Its just good business to sell where there is demand and little in the way of expansion costs (I mean all they really need is to set up links to files right?). I think the disparity that I’m seeing in the different iTMS’s is more due to a lack of foresight in the legal agreements between Apple and Artist/Label. I hope that it’s being corrected, but for now I sit and wait to buy songs that are available in other iTMS stores, waiting for the Canadian iTMS to let me buy.
:(