iTUNES: HE WHO PLAYS THE PIPER MAKES A LOSS

The Register reports that iTunes, the Apple “legitimate” music downloading service is losing money. This is because much of the 99c per song fee goes in the form of licence fees to RIAA. On top of this, Apple had to develop the software that powers the downloading and to maintain the downloading site. The company plans to make a profit by associated hardware tie-ins, like its iPod potable music players. The Register criticises Apple’s approach, asking why it is “helping an extinct, and unworthy industry back on its feet” and helping “ancient copyright rules spin the money back to the pigopolists”, rather than supporting a compulsory licence scheme where all artists are paid a flat rate for their performances. It concludes that the reason is that, in the interests of vanity, Apple is keen to be the first successful legal download company.

While the IPKat is disappointed that Apple is not breaking even in running its service, he isn’t sure that he agrees with The Register’s analysis of Apple’s approach. Whether or not a compulsory licence scheme of the sort the article advocates is desirable, at present the copyright laws require the payment of licence fees and Apple is providing a valuable service in running a legal downloading facility and thus filling a demand in the market that was not adequately catered for.

iTunes here
i Claudius here
i For an Eye here