And its not even making money, according to Apple CFO Peter Oppenheimer, who said on Monday of the iTunes Store, were running those a bit over break even, and that hasnt changed, adding that the iPhone and iPod Touch platforms could help push iTunes into the black.
The Apple tablet will run the iPhone OS, according to the CEO of McGraw-Hill, so hopefully, for the sake of music, video and app creators, it will continue to boost the iTunes platform. In the area of music, however, a sea change is in order.
The head of the International Federation of the Phonographic Industry asserted in a conference call last week that 95 percent of all music downloads are illegal, and said that the number has been holding steady despite streaming services like Spotify gaining some traction abroad. It will take an Apple music-streaming service to convince more users to make the move from free, infringing downloads to free or inexpensive legal streams.
All the pieces are in place for this. As I mentioned in December and Michael Robertson pointed out last week, the big reason Apple purchased Lala may have been for its mechanism for uploading tracks from iTunes libraries onto its servers, supplying the missing link between the download-centric version of iTunes today and the streaming iTunes of tomorrow.
Heres how that works. First, Lala scans a users iTunes library for songs it can identify with certainty and provides the user with copies of those songs in their online account. Then, all songs that cant be identified are uploaded one-by-one a process that takes awhile, but only has to happen once, and ensures that 100 percent of a users music collection gets copied into an online account. After that, the issue of device syncing diminishes, because each device accesses the same online music collection without having to refresh its content through iTunes and a USB cable.
Now that Apple owns Lala, the stage is set for it to revamp iTunes as a thin (as in, anorexic supermodel thin) client for managing local and cloud-based streaming content within one interface, which hopefully loads much quicker and freezes up on Windows far less frequently than the current version does.
Wired.coms Brian Chen and Dylan Tweney noted earlier today that this Apple event will revolve more around content than the tablet hardware itself. Hopefully, the announcement will also involve trimming down iTunes and adding an online music streaming component. Apples Lala acquisition currently sells streaming songs for 10 cents a piece. If Apple can wrangle a similar deal out of the labels, more users would be likely to pay for music, which could only boost the iTunes stores surprisingly low profits to date.
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