Apple’s “iTunes Store isn’t the future of music. And after more than three years, this is a consensus that’s based not on wishful thinking, but empirical evidence,” Andrew Orlowski writes for The Register.
“Principally this is because iTunes doesn’t make money for anyone except Apple. In itself, the iTunes Store barely breaks even – but it fuels the much more lucrative downstream bit of the delivery system. iTunes sales remain vanishingly small as a proportion of the music business, but most importantly of all, iTunes doesn’t generate money for anyone except Apple. Broadband providers, PC manufacturers, insurance companies, and the battery-replacement services have all profited in some way from the iPod’s success – but no one in the music value chain,” Orlowski writes.
Orlowski writes, “Steve Jobs doesn’t even leave crumbs on the table.”
Full article here.
[Thanks to MacDailyNews Reader “Brian” for the heads up.]
Orlowski has our condolences (how did you get that bug so far up there, Andy?), but we would be remiss if we didn’t point out that Apple gives the bulk of each tunes’ 99-cents to the record companies who supposedly share some of that with the artists. And the bulk of the $1.99 for TV shows to the TV networks and producers who share that with the actors, writers, etc. And the bulk of movie sales with Disney (including Disney-owned studios Pixar, Touchstone Pictures and Miramax Films).
Apple also pays for the massive bandwidth and the marketing and promotion and software development and…
Apple’s iTunes Store has generated over US $1.5 billion, the bulk of which has gone to the record labels who, without Apple, would have had approximately $0 to show for it – just another 1.5 billion songs freely pirated otherwise. Apple’s iTunes Store generates money for music labels, music artists, TV networks, producers, actors, film studios, etc. In short – and in reality – the iTunes Store currently makes money for everyone involved, except Apple.*
The next time Orlowski starts to dash out something based on “empirical evidence,” he should first try thinking about it for more than a nanosecond.
* The iTunes Store operates slightly above break even according to comments from Apple execs during the past few quarterly earnings conference calls.
Related articles / pattern recognition excercise:
The Register: Apple event more like ‘No Show’ than ‘Showtime’ – September 13, 2006 (Andrew Orlowski)
The Register: Whatever happened to… Mac OS X Leopard? – August 08, 2006 (Andrew Orlowski)
The Register: ‘Apple doesn’t invest serious effort in improving iTunes Music Store’ – March 02, 2006