TIME: How to Go Legit

“The problem so far with the pay-per-song model from a business perspective is profits — or the lack thereof. With as much as 70% of each sale going to the record label and the rest eaten up by surprisingly high costs for things like infrastructure and credit-card fees, sales volume must but doesn’t yet compensate.  “It’s not a way to make a lot of money,” acknowledges Jobs. No, it’s a way to help sell iPods. Apple says sales of the music-storing, high-profit-margin palm-size gadgets almost quadrupled between the quarters before and after iTunes’ launch.”

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