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• Would you pay for unlimited iTunes?

  Posted Mar 19 2008, 08:02 AM by Kim Peterson
  Filed under: Apple, music, RealNetworks, Kim Peterson
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  After pooh-poohing music subscription services for years, Apple is talking to labels about that very idea, according to the Financial Times. It's about time. Apple could really energize iPod sales this way. But here's the twist: instead of the regular pay-every-month scenario, the fee would be bundled up front into the price of an iPod or iPhone.

  In other words, if you pay more when you buy the iPod, you could get free access to all the music on iTunes for the life of the device. Executives talking to the FT said research has shown that people will pay up to $100 for that, or they would be willing to pay a $7 to $8 monthly fee for a music subscription.

  Nokia has a similar deal in place for devices it's developing, and reportedly will pay music labels $80 for every device sold. Apple, in its typical drive-the-labels-nuts fashion, has only offered to pay about $20, according to the FT. Nokia is being hit hard with the news today; its shares have fallen nearly 8% this morning to $30.17. Apple shares are down less than 1% to $132.04, and shares in RealNetworks, which owns the competing Rhapsody music subscription service, are down nearly 2%. Napster shares are down 3%.   Read More...

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• Apple on pace to become top music seller

  Posted Feb 27 2008, 06:53 AM by Kim Peterson
  Filed under: Apple, music, Wal-Mart, Best Buy
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  Apple's iTunes store has surpassed Best Buy to become the #2 music retailer in the country, second only to Wal-Mart in sales. And an analyst from the NPD Group, which tracks these sorts of things, said that Apple is on track to catch Wal-Mart this year.

  Apple shares dipped less than a percentage point yesterday to close at $119.15. Best Buy shares rose 3% to $46.50, and Wal-Mart shares rose 2% to $51.40.
  

  This news says much about the way we consume music. NPD notes that 1 million people stopped buying CDs last year, a trend most apparent in young people. In 2007, 48% of teens didn't buy a single CD -- up from 38% in 2006. So retailers like Wal-Mart, Best Buy and Target -- who mainly sell physical CDs -- are going to see music sales slide.

  But what does the news say about Apple? Is the rise to No. 2 a result of its own sales savvy, or is iTunes the lucky beneficiary of the CD's decline? A closer look at the numbers sheds a little more light.   Read More...

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• Apple still in sweet spot ... next stop: $240

  Posted Oct 22 2007, 03:49 PM by Jon Markman
  Filed under: Apple, music, Trading
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  Apple reported a huge third-quarter number after the bell today, surprising bulls and panicking bears who have sold the stock short. The Cupertino, Calif., company said it earned $1.01 per share on $6.2 billion in revenue. Consensus expectations were for an 84-cent quarter on $6.06 billion in sales.

  How big a surprise was that? As I have explained to readers in the past, the quick and dirty way to figure out the “expected surprise” for a stock is to visit its Earnings Surprise page on MSN Money. There you will see that in the past four quarters, Apple has surprised by 22.7%, 24%, 46%, 38% and 29%. So today’s 20% surprise was on the low end, but good enough for a company with a $150 billion market cap. 

  Looking forward, Apple executives tried to sandbag analysts with lowball guidance, stating that they expected to earn $1.42 in the first quarter -- just a touch better than the $1.40 expectation. The company is really in a sweet spot now because it is getting a premium price for its personal computers, MP3 players and phones at a time when all of its competitors are discounting like crazy, and at the same time it is benefitinig from lower input costs such as flash and hard disk memory.   Read More...

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• Amazon unveils new MP3 store

  Posted Sep 25 2007, 01:02 PM by Kim Peterson
  Filed under: Apple, Amazon, music
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  Finally, a major retailer figures it out and unveils a music store specializing in MP3s. That's the song format that's blissfully free from those burdensome digital rights restrictions favored by Apple and other companies. You can play MP3s on just about any digital music player or computer. You could make as many CDs of them as you want. You can make copies of them with no problem.

  In short, you can do all the things you're supposed to be able to do when you legitimately buy a song. And the music industry is 100% to blame for how screwed up things have become. Shellshocked by the unprecedented file-trading that took place when songs went digital, record labels went on a lawsuit bonanza while putting every song they could into a virtual lockdown (or, as the industry likes to say, managing the song's "rights").

  Obviously, Amazon holds a lot of sway with record companies to be able to begin tearing down those walls. And give eMusic credit for doing this too (though I wonder about that company's fate now). Amazon's store only has 2 million songs by 180,000 artists. Some big names are there, such as Kanye West, Pink Floyd and Radiohead, and I imagine the labels that haven't signed on will be closely watching to see how the store fares   Read More...

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