How can online music stores like iTunes or napster survive?

[Paulson]

If you think about it, wouldn't the bandwidth costs be outrageous?

I mean if an average song on the iTunes music store is about 3.5 megs... take that by however many users that download the music from their site.. it would be a crazy amount of bandwidth.

So far I've gotten 210.9 Megs from them (53 songs)...

 

[zimu]

i think a company like apple will have their own servers and multiple very high bandwidth internet connections. transferring 3.5 megs every few seconds to people is really nothing...

plus they don't pay for storage or don't have bandwidth limitations.

 

[SuperTool]

Originally posted by: Paulson
If you think about it, wouldn't the bandwidth costs be outrageous?

I mean if an average song on the iTunes music store is about 3.5 megs... take that by however many users that download the music from their site.. it would be a crazy amount of bandwidth.

So far I've gotten 210.9 Megs from them (53 songs)...

Don't they charge money for those downloads? 210 MB is nothing. One Divx movie is 700 mb.

 

[Darien]

for Apple it's no biggie...

Also, iTunes doesn't churn in a profit -- it's used to sell iPods.

 

[Kipper]

Napster = doomed to failure
iTunes = will probably survive because it's backed by a multibillion-dollar company with its own hardware/software pushing people to buy from there...

 

[GtPrOjEcTX]

Originally posted by: Paulson
...
So far I've gotten 210.9 Megs from them (53 songs)...

so 53 songs at say $1 a song... $53 for 210mgs of bandwidth is like highway robery for them.

 

[spanky]

Originally posted by: GtPrOjEcTX

Originally posted by: Paulson
...
So far I've gotten 210.9 Megs from them (53 songs)...

so 53 songs at say $1 a song... $53 for 210mgs of bandwidth is like highway robery for them.

sounds about right.

 

[BigPoppa]

Originally posted by: GtPrOjEcTX

Originally posted by: Paulson
...
So far I've gotten 210.9 Megs from them (53 songs)...

so 53 songs at say $1 a song... $53 for 210mgs of bandwidth is like highway robery for them.

Napster and iTunes pay most if not all of that 99 cents to the RIAA.

 

[Voip]

Very carefully.

 

[GtPrOjEcTX]

Originally posted by: BigPoppa

Originally posted by: GtPrOjEcTX

Originally posted by: Paulson
...
So far I've gotten 210.9 Megs from them (53 songs)...

so 53 songs at say $1 a song... $53 for 210mgs of bandwidth is like highway robery for them.

Napster and iTunes pay most if not all of that 99 cents to the RIAA.

:disgust: doubtful

 

[crypticlogin]

I'd bet a good portion of iTunes sales comes from iPod owners. And unlike the console gaming market, Apple makes a profit on iPods so they're already ahead if you consider the hardware/music as a package.

 

[Paulson]

Well, of those 53 songs I got all were because of the pepsi promotion, so I didn't pay a thing to them.

Also, a big part of their 99 cents goes to the RIAA or labels...

 

[AFB]

Originally posted by: GtPrOjEcTX

Originally posted by: BigPoppa

Originally posted by: GtPrOjEcTX

Originally posted by: Paulson
...
So far I've gotten 210.9 Megs from them (53 songs)...

so 53 songs at say $1 a song... $53 for 210mgs of bandwidth is like highway robery for them.

Napster and iTunes pay most if not all of that 99 cents to the RIAA.

:disgust: doubtful

No, it true.

 

[Lvis]

The idea someone had back in the Napster days seemed like a good one. Every user to pay a monthly fee, and would be able to download all they wanted.

The users would have provided nearly all the bandwidth.

Maybe I'm cheap, but a buck a song still seems pricey to me.

 

[GtPrOjEcTX]

Originally posted by: L vis
Maybe I'm cheap, but a buck a song still seems pricey to me.

same here...which is why I use allofmp3.com

 

[LethalWolfe]

Originally posted by: GtPrOjEcTX

Originally posted by: BigPoppa

Originally posted by: GtPrOjEcTX

Originally posted by: Paulson
...
So far I've gotten 210.9 Megs from them (53 songs)...

so 53 songs at say $1 a song... $53 for 210mgs of bandwidth is like highway robery for them.

Napster and iTunes pay most if not all of that 99 cents to the RIAA.

:disgust: doubtful

The majority of the money does not go to Apple. Apple makes enough to basically break even. If they make a profit from iTMS its not a worthwhile one. iTMS is used to sell iPods which Apple does make a profit from. iTMS exists to sell iPods.


Lethal

EDIT: It's kinda like consoles. You don't make money on the console, you make money on the games and accesories.

 

[thomsbrain]

Originally posted by: Darien
for Apple it's no biggie...

Also, iTunes doesn't churn in a profit -- it's used to sell iPods.

exactly. iTunes exists to give apple a legimate excuse to sell ipods, not to be profitable on it's own.

 

[theNEOone]

Originally posted by: thomsbrain

Originally posted by: Darien
for Apple it's no biggie...

Also, iTunes doesn't churn in a profit -- it's used to sell iPods.

exactly. iTunes exists to give apple a legimate excuse to sell ipods, not to be profitable on it's own.

ok everyone saying that iTunes isn't profitable is correct, but you need to qualify your statements. they aren't profitable yet, in large part because of the high fees they pay to they RIAA (i'm guessing close to 80% of what they charge per song.) but there was a HUGE initial investement and sizable fixed costs that are required to maintain the iTunes service. given time, and enough volume, Apple can (and probably will) make money off the iTunes alone, and not off the iPod "spill off."


=|

 

[DWW]

Around here 1GB of bandwidth costs about $1 on average... so figure its the same for Apple. That is what, like 200-300 songs? Hardly anything.

 

[LordMorpheus]

this is wherethe advantage of listening to Blues-rock and jazz-rock becomes apparent; 53 songs for me would be more like 600megs. I get more minutes per doller!

 

[LethalWolfe]

Originally posted by: DWW
Around here 1GB of bandwidth costs about $1 on average... so figure its the same for Apple. That is what, like 200-300 songs? Hardly anything.

You have to factor in all the bandwidth being used, not just the bandwidth used on download (which is about 2 million songs a month IIRC). Bandwidth is beind used by people just browsing the store and for the 30 sec streaming previews of songs.


Lethal

 

[Chiropteran]

Bandwidth is nearly free.

 

[Paulson]

Originally posted by: Chiropteran
Bandwidth is nearly free.

Not in southwestern Minnesota it isn't....

 

[PowerMac4Ever]

Originally posted by: DWW
Around here 1GB of bandwidth costs about $1 on average... so figure its the same for Apple. That is what, like 200-300 songs? Hardly anything.

$1 for 1GB is highway robbery, especially for Apple.