“Nielsen Entertainment Research reports that music labels keep about 34 cents from each 99-cent music track sold through a-la-carte music services,” Frank Barnako reports for MarketWatch. “Approximately 31 cents goes to the seller, such as Apple Computer’s iTunes Music Store, and about 34 cents is paid out for rights and royalties, the research firm determined in a study of the market for on-demand programming. The economics of video downloads are similar. ‘Assuming the 70/30 split, the $1.39 net to the content owner is virtually identical to what a commercial-free episode of a TV series generates from a DVD box set,’ Nielsen said, according to the Hollywood Reporter.”
Full article here.
[UPDATE: 1:45pm EST: fixed headline.]
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You know, having researched the royalities for an upcoming album, I was quoted as $.08 cents per song as a royality fee.
This information is clearly wrong.
In your headline you say Apple gets $1.39 for each video, that’s flipping the 70/30 split the wrong way. As they just explained Apple gets ¢31 for every ¢99 song sold, which is roughly 31%. Then it states “Assuming the 70/30 split, the $1.39 net to the content owner” in other words Apple is getting the leftovers from the $1.39 the content owners get. $1.99 – $1.39 = ¢60. Which is again roughly 30%. So fix the headline.
Your headline is dead wrong. Apple does NOT get 1.39 per video download acc’ding to this article — THE CONTENT OWNER GETS THAT. Read the article before writing the headline.
Well, the artist gets the smallest cut. In this country, the enterprise owns the intellectual capital. Go start your own label, you commie!
Apple probably does get that much, but they are also paying for bandwidth, tech people, etc., so I bet as far as actual profit goes they make like .05 per song or something…
Oe better yet, MDN should STOP WRITING their own misleading headlines and stick to the original headlines of the article.
gimme a break G Spank. With the volume of songs Apple has… you can bet they make a tonne off of songs…
Apple’s 31 cents pays for servers, maintenance, electricity, heat, staff, benefits, insurance, bandwidth, customer support, the rent on the buildings where the staff and servers are housed, AND Apple pays the credit card transaction charges.
Apple’s profit at the end of the day is very slim per song.
Apple’s 31 cents ALSO pays for all the R&D to MAKE the music store and add new features, and all the time and effort put into attracting more music labels to the store. Those are all big expenses too.
I think Spank’s 5 cents is too HIGH an estimate, but whatever Apple makes is far less than the 31 cents.
Besides, a lot of songs cost less than 99 cents–you buy as an album and you normally pay less. So then Apple’s cut gets even smaller. 99 cents is NOT the average price it’s the highest price.
Of that 34¢ that goes to royalties, keep in mind that they are split between the artist, the songwriter (who is sometimes the artist, and sometimes not), and sometimes other third parties.
Of the 31¢ that Apple keeps, about 10¢ goes to their credit card processor, and the rest is split between network bandwidth, server costs, labor, R&D, marketing, and profit.
According to a report released by the National Association of Record Industry Professionals in September of last year, $0.34 is the correct number.
http://www.narip.com/index.php?page=article/Shrinking
Sorry, I should add that in the NARIP report, $0.34 is Apple’s take.
MDN: don’t listen to the whiners- keep on writing your own take on the news items. It keeps us interested!
The suggestion you keep the original headline is pathetic..
i have an idea. Lets all get really mad at something. Just anything. Go, now. Do it. Get really really mad. (Ben Stiller’s voice) Do it! Do it! Com’on Do it! (End Ben Stiller’s Voice)