iTunes Music Sales Down 13-14% This Year…

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It’s worse than we thought.  From the Wall Street Journal this morning:

“Music sales at Apple’s iTunes Store have fallen 13% to 14% world-wide since the start of the year, according to people familiar with the matter.”

“The decline is stark compared with a much shallower dip last year. Global revenue from downloads fell 2.1% in 2013, according to the International Federation of the Phonographic Industry.”.

All of which may be accelerating the planned integration of Beats Music:

“Some record company executives worry their industry could lurch back into decline after several years of relative stability, should download sales decline faster than streaming growth accelerates.  Apple is rebuilding Beats Music and plans to relaunch it next year as part of iTunes, according to a person familiar with the matter.”

 

Written while listening to Duke Dumont.

44 Responses

  1. Anonymous

    Planning on launching next year and have barely begun negotiating with the labels?? GOOD LUCK!

    Reply
  2. EDM_insider

    Actually our internal numbers are much worse than %13.

    We are seeing a decline of 20-25% in itunes music sales this year compared to 2013. Every month feels slightly worse and we are wondering where the bottom is….

    Reply
  3. Eye Giveup

    When was the last time you saw/heard a TEEN download/buy a song or album….?

    Reply
  4. Yep

    I surprised it’s dying this slowly, The biggest mistake they made was the price hike in 2013.

    Ownership of music recordings is dead, has been for 2 years.

    iTunes is now 10% of my labels income. If it ended tomorrow we would not notice.

    Wise up industry.

    Spotify.

    Reply
    • DeezNizzuhh

      Every time I hear someone make this claim, they NEVER give figures. It sounds like you’re saying,”Boy, the $10K we got from iTunes this month sucked balls, but the $5 check we got from Spotify is profound!”. WTF?

      What’s really real in the streets?

      Reply
      • Yep

        ok. Figures.

        Last months revenue we had from our main distributor was:

        Spotify: $27,768.79
        iTunes: $15,693.26

        I know, that’s not 10% but this is a snapshot. We have content in all stores and run our own store…yes, iTunes is now about 10%

        We are aggressively moving away from digital downloads + have been for over a year. They are dead. We don’t actually bother delivering to iTunes anymore. No point.

        Reply
        • Bruno

          If your figures were really the ones you are indicating, you’d care about Itunes…
          So I’m quite sure, these figures are 100% bullshit

          Reply
          • Bruno

            Moreover. Whatever you think about downloads today, it is still the core market.
            Youtube excluded, streaming is nowadays weak, and Itunes still rules.

          • Yep

            Why would I ‘care’ about iTunes now? The revenue is collapsing, for us it has reduced by 50% in 6 months. I have been running my label for over 15 years, I have seen several formats collapses. This is fairly comparative to the deceased ‘cassette tape’

            There will be no glorious retrospective for digital files, like vinyl.

            The market moves on. The smart labels move ahead of the curve and figure out how to fully monitize within the new delivery mechanism i.e. streaming.

            Trying to bolster sales within a dying format is pointless, frustrating and ultimately non-profit making i.e bankruptcy beckons, people lose jobs.

            Ignorance is very serious.

          • steveh

            and what about your sales from Amazon Digital, Beatport, or CDs?

            iTunes and Spotify are not the only games in town.

          • Yep

            CD’s? Pressed and sold our last CD in 2011.

            Yes, we use all the stores you mention and more.

            Amazon – ever heard the phrase ‘jack of all trades master of none’ ? That’s Amazon in music delivery.
            Beatport – We don’t sell dance music
            Deezer – Watch out for this one, it is rising
            Beats – Don’t count them out
            RDio – Rising fast

            Google has YT and ‘Google Music’ – both platforms have enormous revenue streams.

            I can honestly say I do not know which service will lead the way in 2015/16. What is certain is that it will be streaming.

            Spotify is leading right now and their lead is extending everyday. The longer the other services either wait to join in (Apple) or copy Spotify, the larger chunk of the market Spotify will gain.

            The real winners will be music listeners and the labels who embrace the future.

          • steveh

            Well too be quite honest although I don’t like Amazon they are nonetheless a major player in both CD sales and digital.

            The fact that you have no Amazon presence somewhat shreds your credibility as a label, so please stop boasting and lecturing to everybody.

          • steveh

            OK it wasn’t completely clear – I got the impression that you were not on Amazon at all.

            But surely with 218,000 tracks you should be getting substantial digital income from Amazon. Add that to iTunes income and the proportion of download sale income to streaming would be considerably higher would it not?

          • Bruno

            Exactly. 99% of labels and digital distributors are on Amazon.
            Because they are the 2nd Player in digital market concerning Download.
            And it means once again, that YEP figures are 100% Bullshit.

          • Bruno

            Exactly, everything you’re telling is 100% Bullshit.
            If your figures were exact, it means that Itunes represents over 36% of your sales.
            So if they were true, and obviously they’re not, you would take care of 36% of your sales!

          • Yep

            Nope. Not BS.

            The statement I made was in relation to iTunes revenue, not digital downloads generally.

            However, we are moving away from digital downloads generally as iTunes is the market leader here. If Apple are struggling to sell files, then it’s pretty obvious that Amazon etc..will be having similar issues.

          • steveh

            Sorry despite your protestations the bullshit detectors are going into overload on your spin driven posts. You seem to have some kind of wierd agenda – running a label does not appear to all you are campaigning about.

            Example 1:- Since when does a monthly iTunes income of $15,693 equal “Apple are struggling to sell files”. We all agree that iTunes sales are down – but “struggling to sell files”? That is sheer agenda driven spin – in other words Bullshit.

            Example 2:- It is generally agreed that Amazon digital is second to iTunes in dowload sales, so why do you not give your monthly Amazon digital sales figure rather than just make the conjecture of “it’s pretty obvious that Amazon etc..will be having similar issues”. Why do you only give partial numbers. Use of partial numbers is an obvious sign of agenda driven spin – in other words Bullshit.

            Example 3:- I checked this from your earlier post. You said:- “We don’t actually bother delivering to iTunes anymore. No point.” Are you kidding? Do you seriously instruct your “main distributor” to stop all deliveries to iTunes because “their monthly sales are only $15k – not worth bothering about”? And does the “main distributor” agree to this? If I was a manager of an artist on your label I would be calling my lawyer about this! This cannot be correct – in other words Bullshit.

          • There is something...

            I like those people who ask for numbers, but when they get some it’s then “bullshit”. Obviously, you’re not asking for numbers unless those numberers serve your point of view.

          • Bruno

            IFPI’s numbers are more reliable than YEP’s numbers..
            Now, you believe whatever you want to believe

          • There is something...

            What IFPI numbers ? They don’t give detailed numbers about small labels revenues. So many thing can change depending where you’re located, what is musical genre and who is your primal audience. They are good to see general trends, but not to analyze a particular business model like an independent label.

          • Bruno

            YEP is telling us that his catalogue is 218,000 Tracks and his gross revenue is around 500 K.
            So he’s not a “small” label at all. And it means that 99,9 % of his catalogue is back catalogue
            And I can guarantee you that the biggest part of streaming on Spotify is Premium & New content.
            So it means that his revenue should be (Youtube excluded) mostly from download revenue.
            And yes IFPI’s numbers matters, because they are REAL & can be CHECKED, and YEP’s are wrong, and cant’t be checked.

            Unfortunately, there’s no miracle. And streaming is not, for the moment a promising future… at all
            Moreover, I can guarantee you that Itunes’ll finally be in the streaming business soon, and with hundreds of millions Iphones all over the world, and more than 800 millions payment cards numbers… Itunes’ll quickly be a major player and probably the first one concerning streaming business (Youtube excluded).

          • There is something...

            Sorry but no. His numbers look a lot what I see from some labels. Again, not every market is the same. And some genre and market are switching to streaming. He didn’t say he makes 0 from iTunes right now, but iTunes is losing ground, and that’s something I can see. On they other hand, I also know a fare amount of labels who still makes about 70% of their income from physical release, 25% from downloads, and peanuts from streaming. Again, different markets, different audiences…

        • Versus

          Interesting experience.
          How has your overall revenue situation changed with that new balance of incomes, though?

          Does the Spotify (and other streaming income, if any) compensate for the decline of iTunes income?

          Reply
          • Yep

            In terms of revenue, we’re basically now at the same point as we were at the peak of iTunes (Q4 2012), when iTunes was around 80% of total revenue.

            The exciting thing is that we have seen, quite literally, an explosion of streams on Spotify in the last 2/3 months and great expansion on Deezer and rDio.

            As a comparison I estimate Spotify (and streaming in general) is at the same point now that iTunes (and downloads) was around Q4 2008.

            So, I’m expecting that is has another 3 or 4 years of double digit growth ahead.

            Therefore, look at your Spotify (paid streaming) revenue and add 40% now, if you do nothing. If you actively participate in all the positive streaming initiatives then you may double the current revenue in a few years.

            Yes…I am boasting and yes, I am lecturing. So what? Someone needs to bring a positive streaming story to this blog:)

          • DeezNizzuhh

            I agree that streaming has potential, but about these 218,000 tracks…

            I totally see why artists are pissed off. It looks like your company is getting around 500K a year, of which artists that produced said 218k tracks may be seeing some tiny slices of iSpotunes pie. Not to pick on ya, artists are seeing tiny slices of Spotify pie WITHOUT having to be signed.

            The new industry just sucks currently in terms of payout.

            But streaming is the next “thing” and more people are starting to gradually find out about it. The mainstream consciousness is finally starting to take hold and shift towards streaming. I’ve been surveying students in my classes and they are starting to have some knowledge about Spotify. When I asked this time last year, many hadn’t heard about it.

  5. BamDing

    That makes sense. If you only rely on digital downloads as your income, you’re screwed.

    I think musicians need to use their creativity and create new experiences for their fans…digital and/or physical. Recorded music has value if it’s given value.

    Thanks for the info, Paul!
    – Chris “Seth” Jackson

    Reply
  6. Business 101

    Business 101…you can’t give away a product for free at one retailer (Streaming) and expect your customers to pay for that same product at another retailer (Downloads). Who came up with that?

    Reply
    • Versus

      Didn’t we also have that kind of 2-tier system, with free radio?
      It worked rather well until recently.
      You heard a song on the radio; if you really liked it, you bought the sheet music, cylindrical recording, 78, 45, LP, CD, or download, or mind imprint.

      Reply
  7. Eroc

    What does Apple expect, still selling crap lossy files. I refuse to pay for lossy files, and I know that most people don’t care, but there would be a probably not insignificant number of people who would buy more tracks there if it were actually worth the money. If it’s mostly older consumers who are still buying tracks now, then why doesn’t Apple differentiate itself to that crowd and introduce audiophile versions? I’d pay for that.

    What I won’t pay for (and I realize this also probably makes me older) is yet another a subscription that costs me $120+ per year with nothing to show for it after I cancel.

    Reply
  8. Chris H

    Curious why everyone assumes it’s “over”. Perhaps there is nothing worth buying at the moment. What would Ahmet say? “What’s your plan for next year (after a very down year) “Make More Hits”.

    I don’t see what’s so different about now.

    Reply
  9. CD4ME

    Best to own the CD. Consider it backing up your music collection. You can digitize them and add your play device but still own the music should the device break. Are you going to stream when you’re camping and out of of signal range or when your travelling, which will cost you a million dollars in roaming charges? How about when ISP providers jack up their data rates, or when there isn’t enough broadband to satify the demand as more and more people get on the net? Owning music is the only way to go. At least you know what you like when you own it. Having access to a billion songs doesn’t do anything for me because you have no idea what you want to listen to when everything is at your disposal. At least when you own something, you are reminded of what you like when you scroll through your collection – consider it a filter. That’s the problem with the music industry now – too much music out there to keep up with that you just give up trying and stick to what you know.

    Reply
  10. JAIO

    Owning music is the only way to go

    You don’t own the music. You own a conveyance mechanism, and a license to use the music for personal purposes …but you don’t and never have owned the music… so does it really matter what conveyance mechanism you utilize for the purpose of listening to music?

    Reply
    • CD4ME

      You’re splitting hairs. Of course you don’t own the master, but you did legally pay to own a copy of it. Better to “own” your music rather than “rent” it because when the streaming stops, you have nothing. That’s the endgame of all these streaming services. They want to get you addicted so that you’re with them for life. And when that happens, prices will soar because you won’t be able to buy anything anymore if the trends continue. It’s a calculated move that people are getting sucked into.

      Reply

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