Itunes match and server issues

  • Posted: 17 November 2011 03:01 AM

    Itunes match probably wasn’t intend to bring in additional revenue at only $25/year.  It was probably intended to strengthen interdependance on various Apple devices.  But with over 100 million itunes users if we figure 20% subscribe $500 million in revenue is a nice freeroll.  Surely the profit margin must be large also as server resources aren’t very expensive in this day an age especially with economies of scale like Apple’s. Personally I subscribed right away because I have many songs that I obtained nefariously.  It seems to work flawlessly.  The delay was probably due to concerns over inadequate server resources with everyone trying out Siri and upgrading itunes simultaneously.  Out of 200 songs recognized I only had to upload 50.  The songs took about a minute each to upload so Apple definitely has an insormoutable advantage over google and amazon.  Who wants to wait days to upload their huge collection? 

    I can’t believe that in this day and age Apple still hasn’t figured out to release things that will generate massive traffic such as iphone preorders or ios 5 downloads at the least congested times such as 7 a.m. EST. Releasing the IOS 5.0 download in prime time was guaranteed to cause problems.

    [ Edited: 17 November 2011 03:04 AM by AndrewLing ]      
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    Posted: 17 November 2011 09:05 AM #1

    AndrewLing - 17 November 2011 07:01 AM

    Itunes match probably wasn’t intend to bring in additional revenue at only $25/year.  It was probably intended to strengthen interdependance on various Apple devices.  But with over 100 million itunes users if we figure 20% subscribe $500 million in revenue is a nice freeroll.  Surely the profit margin must be large also as server resources aren’t very expensive in this day an age especially with economies of scale like Apple’s. Personally I subscribed right away because I have many songs that I obtained nefariously.  It seems to work flawlessly.  The delay was probably due to concerns over inadequate server resources with everyone trying out Siri and upgrading itunes simultaneously.  Out of 200 songs recognized I only had to upload 50.  The songs took about a minute each to upload so Apple definitely has an insormoutable advantage over google and amazon.  Who wants to wait days to upload their huge collection? 

    I can’t believe that in this day and age Apple still hasn’t figured out to release things that will generate massive traffic such as iphone preorders or ios 5 downloads at the least congested times such as 7 a.m. EST. Releasing the IOS 5.0 download in prime time was guaranteed to cause problems.

    Storage costs are low, Amazon charges about $0.14 per GB, but the cost of the internet pipe to service all the users is significant.  One estimate I saw for iCloud 50Kb/s per user to effectively serve 3GB/Month of synch traffic.  This would result in a pair (for redundancy) of 50Gb/s for every 1 million users.  Cost is about $1 per Mb/s per month or 100K per month per million users.  If they reach the 100M mark in a couple years then spending will be about $120M per year for about 5Tb/s of internet pipe.

         
  • Posted: 17 November 2011 03:58 PM #2

    I believe that a large percentage of that $25/yr is going to the record labels as a way for them to get some revenue from all the music people have “obtained nefariously”, so this is probably an insignificant source of profit for Apple.

         
  • Posted: 18 November 2011 04:17 AM #3

    Yes good point.  It’s probably why the labels agreed to allow it.  In order to scrounge up a couple bucks from pirated music.  So the question is whether the $25/year is enough to cover the server resources.  I guess they set the limit at 25K songs figuring that that is the maximum loss they’re willing to take on a power user.  But why not just charge more for additional server space like they do with the rest of the cloud?

         
  • Posted: 18 November 2011 08:06 AM #4

    AndrewLing - 18 November 2011 08:17 AM

    Yes good point.  It’s probably why the labels agreed to allow it.  In order to scrounge up a couple bucks from pirated music.  So the question is whether the $25/year is enough to cover the server resources.  I guess they set the limit at 25K songs figuring that that is the maximum loss they’re willing to take on a power user.  But why not just charge more for additional server space like they do with the rest of the cloud?

    because iTunes match does not use server space

         
  • Posted: 18 November 2011 08:11 AM #5

    Yes it does for the songs that it doesn’t recognize and has to upload which fr me was 25%
    In the future they should be able to recognize more songs since the vast majority if the songs I uploaded are available on iTunes. Also now that I think about it the server resources will not be that expensive considering how many people download apps that are sometimes hundreds of meg with apple taking 30 cents or even nothing.  Music files are far smaller than apps

    [ Edited: 18 November 2011 10:32 AM by AndrewLing ]