Selling music videos on Apple’s iTunes makes economic sense

21 years ago

“Apple Computer, whose iTunes and iPods took a major step toward rescuing the music industry from the grip of pirates, is poised to do a similar service for videos,” David A. Andelman writes for Forbes. “Some of the top music labels say they’ve been contacted by Apple about the prospects of selling music videos on iTunes—probably ahead of a fall debut of a color-screen Apple full-motion video iPod. The labels ought to be jumping for joy.”

“Since the debut of MTV nearly a quarter century ago, the top music companies have been churning out music videos to fill an instant need for 24-hour services that reach their music buyer audience directly and immediately. As one music industry insider put it, ‘the labels watched MTV build a multibillion dollar business on material they supplied for free.’ And that was at a big, sometimes enormous, cost. Some of the highest-concept, most elaborate videos soared well into seven-digits for the hottest groups,” Andelman writes. “Now, suddenly, Apple is dangling the prospects of turning these into a profit center, or as one senior record label exec put it, ‘at least it might let us recover our costs.'”

Andelman reports, “According to the Recording Industry Association of America, music video sales (DVD and VHS) jumped 51% last year to 32 million units, good for a haul of about $607 million.”

Full article here.

MacDailyNews Take: Apple already is selling video content via iTunes music store — it’s bundled with music albums. For example, Coldplay’s “X & Y” Album costs US$11.99 and comes with a video interview. You can’t buy the album without the video unless you buy each of the album’s 13 songs individually for 99-cents apiece or $12.87. Um, we’ll take it with the video for $11.99, thanks. Albums without bundled video extras cost the normal iTunes Music Store price of $9.99. As more video content is added, and Apple and the labels see people paying the extra amount for such “enhanced” albums, expect the “normal” iTunes album price to become $11.99.