Sure, we've all heard that Apple's iTunes Music Store only barely breaks even, and even if we were all living in the Land of Cotton Candy Trees and Rainbow Ponies and Apple were miraculously making a full dollar's worth of pure profit on every 99-cent song sold, that'd still "only" be maybe $35 million in profit this quarter, which isn't necessarily a lot in the grand scheme of Apple's usual revenues. And obviously Apple isn't making anywhere near a buck per track, so have you ever wondered exactly how much of that 99 cents you drop per song actually finds its way into Apple's pocket?

Well, according to The Independent, it may be even less than you ever expected: reportedly Apple "retains just 4 cents from each 99-cent track sale." About twice that goes to the song publisher, and a whopping "62 cents or more" goes to the record label, who is then expected to pass along a cut to the artists themselves. Most people wouldn't have much trouble with the labels taking such a big slice of the pie if they knew that the artists were getting paid well, but the number we've heard bandied about a lot is that the labels only pass about ten of those "62 cents or more" along to the folks who actually make the music. Do the math and you'll find that means that the record labels swallow up more than half of the cash coming in from each song sale, despite the fact that "the marginal cost of manufacturing has fallen to almost zero"; they have to pay to stamp out more CDs, but downloads, not so much. Worse yet, even though their cost is far lower with downloads, they make more money per song download than they do on CD sales. (If you're feeling a surge of righteous indignation, run with it-- you're entitled.)

Meanwhile, back to Apple's cut: four cents? We're going to have to assume that's after subtracting out the company's cost of bandwidth, credit card transactions, salaries for iTMS-related staff, booze, hookers, M&Ms and the hourly wage of the guy who picks out all the brown ones, and any other relevant expenses incurred, because otherwise Apple would be losing millions every quarter. Not that a loss-leader wouldn't necessarily still be a reasonable investment as long as the iTMS were driving sales of those nicely-profitable iPods, but Apple has gone on the record as saying that the store actually makes a teensy profit all on its lonesome-- and apparently this four cents per song is it. So why on earth do companies like Napster, who don't have iPods to sell, think that a downloadable music service in its current state is in any sense a viable way to make money? Expect lots of them to crumble to dust over the course of the next few years, kiddies, unless the labels suddenly get a lot less greedy.

It could happen. Sometimes it rains fish. Of course, the record labels becoming more willing to share their filthy lucre would be a probabilistic anomaly more on the order of it raining tractors, but hopes springs eternal.

Anyway, forget all that; the truly important bit is, how does all this relate to us? Well, perhaps most interesting of all is the fact that the iTunes Affiliate Program pays authorized iTMS Pimps such as ourselves five cents per song sold as a result of our referrals, which means a couple of things: first, we wind up getting paid about half as much as the actual artists do, if the widely-circulated "dime a song" reports hold any water. But even more striking, we wind up swallowing all of Apple's profit on the sale and then some, so Apple does accept the iTMS as an iPod-selling loss-leader when third parties bring in its business.

So when you buy a song via our iTunes link, you're actually costing Apple a penny-- but don't feel too bad, because the company's got half a trillion of them, so we think they can spare it. Unless you're buying a whole lot of songs.