Sam Oliver
The cost of securing deals with the labels is more than $100 million, and as high as $150 million, three separate sources reportedly told The New York Post. Apple is said to have agreed to pay the four major record labels between $25 million and $50 million each.
The money was described as "an incentive to get on board, depending on how many tracks consumers are storing." The report also reaffirmed earlier claims that iCloud will initially be free to people who bought their music from iTunes, but that the company is "considering" a $25-per-year charge in the future.
"The music companies will divide the fee with Apple, with the tech firm taking a 30 percent cut, 12 percent going to music publishers, and the rest to the labels to divide with their artists," the report said.
The final piece of Apple's music streaming puzzle fell in place on Thursday, when it was revealed that Apple had reached a licensing deal with Universal Music Group for iCloud. Universal was the last of the four major record labels to get on board with Apple's service.
Apple revealed earlier this week that it will unveil the iCloud service on Monday during the kick-off keynote for its annual Worldwide Developers Conference. Chief Executive Steve Jobs will unveil iCloud, along with iOS 5 and a presentation of Mac OS X Lion.
AppleInsider exclusively reported on Wednesday that while the music streaming portion of iCloud is expected to carry a fee, other components of the service, including syncing of bookmarks, contacts, and calendar events, are expected to be free to users of Mac OS X Lion. Apple may also sell Lion with a low price point to encourage Mac users to upgrade to the latest operating system.
With WWDC set to kick off on Monday, Apple is hard at work preparing the Moscone Center in San Francisco, Calif., for the event. On Thursday, the company began to erect banners at the center that show a new iOS-style icon for the upcoming iCloud service.
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40 Comments
$150M? That's nothing. Apple makes that much in a couple minutes. They already made $150M after I finished typing this comment.
150 million is nothing considering the potential
$150 million? for a company with $60billion+ sat in the bank I'd bet Steve probably loses that amount down the back of the sofa on an almost daily basis!
$150M? That's nothing. Apple makes that much in a couple minutes. They already made $150M after I finished typing this comment.
150 million is nothing considering the potential
This might help put it in perspective. Between September 9, 2009 and February 24, 2010 Apple announced milestones of 8.6 billion and 10 billion for music sales, respectively. That's 1.4 billion songs in 168 days, or 8.3 million per day. If Apples only holds onto 30% the labels get $5,775,000 per day, or $173,250,000 per month, or over a half-billion per quarter.
(I see others are focusing on how little of a drop in the bucket this is to Apple, whilst my calculations are how it's substantial to the labels.)
Edit: Oops, I did my calsulations based on 99¢ pet song, not the now standard $1.29. At that price it's $7,494,900 per day for 70% or 20 days to recoup $150,000,000, assuming they get 70%.
$150M? That's nothing. Apple makes that much in a couple minutes. They already made $150M after I finished typing this comment.
According to my calculations, it does take them 54 hours to generate $150 million in profit