Why Apple is charging you to store non-iTunes music in iCloud

If you own some music that you bought from iTunes and you choose to "upload" it into iCloud, you're not really uploading anything. Apple already has it. You originally bought it from them. They just have to store the fact that you are allowed to access their copy of the song. Six million people can "store" Poker Face in iCloud, Apple has to keep only the one copy. Us nerds call this single-instance storage.

On the other hand, if you ripped some music from a CD that you own, and you want to upload that into iCloud, Apple has to actually accept the song from you and allocate disk space to store it. That costs them money, and everyone knows that Apple doesn't do anything for free, so you can bet they're going to charge that cost back to you.

I Guess I Should Fear For My Soul

A penny saved

I just learned that if you want to go to the Zune store and buy one 99 cent song, you can't just spend 99 cents. You have to buy $5.00 of "points" and then spend 99 cents worth of points.

Just like Expose versus Flip 3D, Microsoft can't just copy something even when the template for success is right in front of them. They have to copy it, and then tweak it, usually tweak it for the worse, so they can claim to be innovative. (Their word, not mine.) If you're going to take something, just take it, cause you're not fooling anybody. You guys already won that lawsuit anyway.

But in this case, there's more. The points system is a way to take your money and give you nothing in return. If you buy $5.00 of points and buy one song, obviously you leave behind $4.01, or you buy five songs and leave behind $0.05. Buy $100.00 worth of points, and you can buy 101 songs and only leave behind a penny. Everyone assumes there's a breakeven point, even if they don't reach it personally. But where is the breakeven point, exactly?

It just so happens that the numbers 500 and 99 are relatively prime. This means their least common multiple is the product of themselves, 500 x 99. The breakeven point is 500 songs at 99 cents each, or $495.

And you thought your grade school math was useless.

If the Zune store is even moderately successful by global standards, it will have a few million customers. Aside from the lock-in effect of the points system (i.e., no one is going to drop $5 and just buy one song), if each of those customers leaves behind a few pennies, we're talking about at least a hundred thousand dollars - not in revenue, but profit - for which those people received no product!

It's like J Allard was watching Superman 3 when he drew up the pricing structure. (Geez, did you know that's his real name?)