Sunday, April 6, 2008

Show me the money!!!!

How do digital media vendors like iTunes, joost, and rhapsody make money? Advertising. However, it is simply not limited to the simple pop ups or banners located on the outskirts of the page. For Joost, money comes from advertisement deals that are streamed with the video that the user is watching (http://www.joost.com/forums/p/2007/03/how-does-advertising-work-on-joost/). In the case of iTunes, the store charges per song more than they paid to give you the music(label royalties, credit card fees, maintenance of servers holding the music, etc.). For rhapsody, users pay a subscription fee to utilize rhapsody's services. On top of that, Rhapsody also incorporates plenty of ads into their website.
With joost, users cannot download content onto their computer. Their content is streamed. Although there are ways to download streamed video, joost does not offer tools to do so. iTunes and rhapsody allow you to download the music and videos onto your computer. Music and videos purchased from iTunes is limited in distribution, meaning that if the user wanted to play the song on another computer, the user would have to give the computer permission to play the media. The user is only allowed to allow a small number of computers to play it. After that, too bad. For rhapsody, any music that the user did not purchase will disappear after the subscription expires. Before then, the user is free to use it however they want.

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