Now that everyone has commented on iTunes for Windows and Microsoft’s reactionary statements, I figured I’d take a stab at sharing my own comments.
The WSJ published an article [sub. req.] that talked about the iTunes profit margins:
Consider the economics of the iTunes store. Apple charges 99 cents per song that is downloaded by a consumer. Of that 99 cents, Apple pays the record label about 65 cents for licensing rights to the song, estimates Charlie Wolf, an analyst at brokerage firm Needham & Co. Other analysts come up with similar figures. In addition, Apple incurs costs such as credit-card fees, which typically amount to 25 cents a transaction (which can include several songs), plus 2% to 3% of the amount charged. The result: On average, Apple earns less than a dime for each song it sells from the store.
Apple has admitted that they don’t make money on the iTMS, and that the introduction of it on the Windows platform is really a “Trojan Horse” aimed at getting Windows users to buy iPods, and getting them to think about buying Macintosh computers in the future. I think that’s a coy ploy for Apple, and I’m happy to hear that they’re pursuing this course of action. And don’t underestimate the power of the AOL and Pepsi promotions that Apple has secured. Those should prove to be very lucrative promotions for Apple.
Now, for my comments on iTunes and iTunes for Windows (the experience):
I’ve used SoundJam, Audion and N2MP3 back in the day of MacOS 8 and 9 … they were good, but not great. I didn’t have a large hard-drive, and I didn’t enjoy having to work hard to organize my MP3s due to the fact that I had a small drive. I also didn’t play with Napster all that much when it was an easy way to trade music illegally (it was just too much of a hassle for me to keep up with). Lastly, I didn’t buy all that much music…
In the past year or two, things have changed. Apple really improved MacOS X and the iTunes software. I bought a used 5GB iPod a year and a half ago. I fell in love with iTunes and the iPod (my only complaint was the earphones). When the iTMS was launched, I tested it. I was impressed, but not sold on the idea, and still wasn’t buying much music.
Then, about three months ago, I bought a used 10GB iPod from a friend and sold my 5GB to another friend. I also bought a few individual songs and an album from the iTMS. I also finally told iTunes to “Keep my iTunes folder organized” and to “Copy files to iTune Music folder when adding to library”. And with that final step, I’ve been very satisfied with iTunes and my MP3 collection.
I also helped talk a friend of mine into replacing his old Archaos MP3 player with an iPod for Windows. I warned him that without iTunes on the PC using the iPod might not be as nice an experience as it was for me, but he quickly found EPH Pod and was happy enough with his iPod for Windows, but then I told him that iTunes for Windows was coming out by the end of the year.
Last week, when Apple announced iTunes for Windows, he almost took half a day off to go home to play with it. He installed it later that night when he got home from work, and he’s completely happy with iTunes and his iPod on his PC now. In fact, he’s already thinking he wants to upgrade to a new 40GB iPod, he’s so happy… weird how that whole ‘experience’ thing makes him want more…
My thoughts are that one of these days he’ll ditch his old PC and buy a new Mac, but I’m not holding my breath just yet.
Long story short, iTunes for Windows is a good thing. It’s a smart tactical and strategic play on Apple’s part, and I hope it pays off. It’s all about the experience.
If you’re into dance/electronica music, I’d recommend you check out Smart Music’s MP3 collections. Oh, and I’d recommend you check out AllofMP3.com as a great place to get music in addition to your usual sources. And if you’re an iTunes for Mac user, check out Doug’s Applescripts for iTunes and SmartPlayLists.com.
“Never ask a man what computer he uses. If it’s a Mac, he’ll tell you. If it’s not, why embarrass him?” — Tom Clancy
Side note: I’m still waiting to read Scoble’s take on iTunes for Windows after he mentioned that he’d test it out. I’m actually sort of wondering if he’ll blog about it or not, considering who his employer is and that he gets paid to evangelise their technology…