they cry and cry about downloading, til they found a way to make money on it.....
No margins in online music?
Posted on Wednesday, September 22 @ 22:44:37 BST
Topic: News
Record labels are now making more per track with digital music downloads then they are on CDs in stores. Because of this, the minimal margins that a digital music service makes on each track will most likely cause a serious shake down on the digital music industry in five years.
Figures from Apple¹s US iTunes state that about 62 cents or more go to the record companies while only 4 cents go to support the company selling the music, in this case iTunes. This leaves about 8 cents for the music publisher.
It is also now known that with digital music over CDs, the record companies have doubled their share of the royalties even though the manufacturing cost has gone to almost nothing for digital downloads.
With such low margins it seems very unlikely that such a large number of digital music services will be able to hold out for the long run, or even for five years. However, this isn¹t slowing down the number of new entrants to the digital music world, not only in US but also across the UK and Europe, and why not? In just this year digital music sales have increased from 100,000 songs a month to over 500,000 songs in August, and half of those are from the recent release of iTunes Europe.
Without other agendas for Apple, there would have been no money for developing iTunes just for selling music. Because of the iPod and a need for a great digital jukebox on their operating system Apple was able to pull things off so well. This may not be the case for companies that are locked just into digital music. As always though, time will tell.
Linkster
