iTunes Radio Is Having Zero Impact on Paid Downloads…

iTunes Radio has never made downloading a more seamlessly integrated or impulsive experience.  So why isn’t anyone buying?

  • Save

Overall, track downloads in the US are steadily sinking, and this graph shows that iTunes Radio is doing nothing to stop it.  In fact, iTunes Radio could be making it worse: according to Nielsen Soundscan data shared by a major label executive, paid download sales (ie, ‘singles’) slumped to 19.5 million units for the week ending December 6th, nearly 6 percent below the same point last year.

But that is also down more than 11 percent since iTunes Radio debuted on September 18th.  On the flip side, digital album purchase are up 11 percent on the year, though aggregated single and album downloads are down nearly 4.5 percent.  A very substantial percentage of all song downloads happen through iTunes, with some estimates pushing higher than 80 percent.


41 Responses

  1. Anonymous

    It’s also having 0 impact on Pandora. Active listeners and listening hours both increased in November.

    • TuneHunter

      Pandora just makes a lot of media noise and delivers a lot of convenient, almost free music.

      Total gross revenues for last year just 274 million dollars.

      Today if Pandora would become total ashes at INSTANCE, still 17B industry would lose less than 2% in revenues.

      Pandora as a non-subscription and royalty FREE radio on one side and digital music STORE on the other side has a chance to deliver billion dollars in revenues in less than 24 months.

  2. TuneHunter

    We need more iRadios, with Echo Nest custom tune delivery (XM got it too) so folks can discover all they can and then they can visit YouTube pirate Cruise Boat and update their playlists.

    Well it is brilliant for fans but TOTALLY stupid and hopeless for musicians. …and they own the GOODS!

    Labels! It is overdue to go discovery moment sales.
    Let’s lock-up the music inside of real I mean real WALLS.
    Just pay to Shazams, lyrics ID guys same cash you gave in the past Walmarts or Coconuts!
    Free the radio (both internet and terrestrial) from royalties and they will convert tune ID on display to TEXT to rip it function. (just in the initial conversion to sanity times)

    We got to have 100 billion dollar industry by 2020 – we got all assets to do it!

  3. Yves Villeneuve

    Biggest positive takeaways are album units and aggregate download revenues are significantly up year-to-date in the USA.

    To the first commentator, Pandora’s reported totals reflect global listeners, not the presumed USA market they are selling/telling investors. iTunes Radio is USA only, which is why Pandora’s numbers seem to be unaffected. Has anyone heard of a Canadian company called Bre-X?

    • Anonymous

      Except for the 5 people in Australia and New Zealand that use Pandora, their numbers are USA only.

      • Yves Villeneuve

        Good luck with that thought.

        Pandora reports 1.49 Billion listener hours for November in the USA, 8.44% market share. Neilson’s Arbitron reports 2.5 hours per day per radio listener.

        1,490,000,000 hours / (2.5 hours X 30 days) = 19,866,667 Pandora listeners in the USA

        • Yves Villeneuve

          Arbitron also reports 242 million listeners 12+ in the USA.

          8.44% market share X 242mm listeners = 20.42mm Pandora listeners or roughly the calculation result above.

          My only question: is 1.49 Billion listening hours wishful thinking or a guesstimate?

          • Anonymous

            The 1.49 billion hours statistic would be automatically generated by the software used to keep track of listener habits and music licensing. It most likely reports songs streamed in part or skipped as being streamed in full length due to licensing but otherwise appears accurate.

          • Yves Villeneuve

            I think the software that you speak of is an urban myth unless Pandora figured out which 20mm are USA subscribers and which ones are proxies linked to the rest of the world.

          • TuneHunter

            All US radio stations made $17.4 billions in revenues in 2012.
            If Pandora made globaly just $274 millions in the same year and controls 8.44% market we got another distorted and glorified “internet venture”.

        • Anonymous

          Pandora and Arbitron use different metrics. Through the use of software Pandora can precisely measure active users and listening hours. The marketshare claim is an estimation based on Pandora Media’s own statistics and variables. Arbitron uses the diary and PPM. Both are complicated means of measuring a listening audience and use different statistics and variables than Pandora.

  4. Anonymous

    Am I the only one who has a hard time translating declining sales since the launch of iTunes Radio into “iTunes Radio Is Having Zero Impact on Paid Downloads”?

    • Paul Resnikoff

      Well, it could be negative, that’s another possibility. Except that this decline is fairly consistent with broader declines on the year. So, we need more time to see.

      • Anonymous

        “we need more time”

        Cannibalization will go on as long as iTunes Radio exists. Not on a Spotify scale of course, but the same basics apply:

        People don’t buy what they can get for free.

        • GGG

          People didn’t always buy what they couldn’t get for free either. Not at the levels streaming makes a huge potential. Think Imagine Dragons would have sold 150M albums/singles even at the height of CD sales? You’re dreaming. You think 1998 CD sales were 100% of fans?

          • Anonymous

            Which is why the cannibalization won’t reach Spotify levels…

            Then again, there’s radio and there’s internet radio.

          • Casey

            Spotify cannibalization is a no-brainer. The majority of people subscribe so they don’t have to buy music. But there is no evidence radio (internet or otherwise) cannibalize sales on any level.

  5. PiratesWinLOL

    I suppose no one in their right mind, ever expected something as obsolete and inconvenient as paid MP3 downloads, would be around for a long time anyway. Sure, even I got a few FLAC files ripped from CDs on a NAS server, to feed my Sonos system with whatever is not available on the streaming service. However, the very second they appear on my streaming service, I am going to delete them. MP3s was great in the 1990s, but now with streaming, they are just clutter and the vast majority prefer convenience. Why would they not? Having such files making a mess on NAS servers and computer harddrives, is just annoying.

    With regards to the Itunes radio, I can’t imagine it has had more of a negative impact, given the fact that it is so integrated with the store. Perhaps it even slowed down the decline a bit. It is hard to know. What will really kill the MP3 nonsens though, is when they launch their real streaming service.

    I just read another article about this topic also, and considering how fast things are going, I can’t imagine that it will take more than a couple of years before this thing is settled. Nobody should be worried though. Any musician is free to reject streaming and find himself another job.

    • Anonymous

      “no one in their right mind […]”

      …think that pirates ever win anything. Pirates steal because they are losers.

        • Anonymous

          You think destroying an art form without creating anything new constitutes ‘winning’?

          • GGG

            Yes, that’s exactly what I was saying….and why I put the word in quotations…jesus…

            Sometimes I’m amazed that people on here are actually adults.

          • Anonymous

            By your definition, the Germans won WW1 and 2.

            Winning is when Google kills Alta Vista, and Japan kills Detroit.

          • GGG

            My god man, are you really this dense? I put the word winning in quotations for a reason that would be clear to most people. Pirates “won” (there, in quotes again because it’s not a good thing, is that clear now?) because the music industry was brought to its knees and the culture changed so much that we now have no choice but to sell music for shit amounts of money unless something else incredibly drastic happens.

          • Anonymous

            Easy now, I’m not saying you think piracy is good. 🙂

            I’m saying that pirates never win anything, and that’s a simple fact of life. All they ever achieved was to prevent their favorite bands from making new music.

            Pirates never create, they never contribute and they never win because they’re just not in the competition.

            All they leave behind are trails of mindless destruction, signifying nothing…

  6. mdti

    I would not buy a movie that I just watched on TV.
    And I would buy it even less if I can watch it whenever I want, the number of times I want.
    A purchase in this case, would only be to access a premium quality product, which in music is on CD and not on MP3.

    • Anonymous

      “I would not buy a movie that I just watched on TV”

      No. I loved Apple to no end, but things are changing: OS gets more & more bloated, Apple hasn’t invented anything usefull for years, and iTunes Radio was a suicide attempt.

      In short, Apple reacts the way it always reacts when Mr. Jobs’ leaves the building.

      • R.P.

        finally, someone with some clear logic and not the typical emotional bullshit.

  7. Jay Frank

    We actually saw download sales definitively go UP the minute that iTunes Radio started programming our music.

  8. Karen Koplick
    Why hasn’t DigiMusic News reported on this breaking news story?
    This FB strategy is Terrible News for Vevo And Vevos investors, watch bottom fall out of that big money LOSING venture…called Vevo. Vevo is Devo..a huge embarrassment to the music industry and artists everywhere. Slapping their UGLY Logo on everything….like they want to take ownership of artists, their images, song lyrics, melodies, all of it..behaving just like the (now extinct) record labels…Yuck.

  9. Karen Koplick
    This FB strategy is Terrible News for Vevo And Vevos investors, watch bottom fall out of that big money LOSING venture…called Vevo. Vevo is Devo..a huge embarrassment to the music industry and artists everywhere. Slapping their UGLY Logo on everything….like they want to take ownership of artists, their images, song lyrics, melodies, all of it..behaving just like the (now extinct) record labels…Yuck.

  10. Booker

    I always spent my half an hour to read this website’s content all the tikme along with a mug of coffee.