iTunes Sales 'Collapsing'

[Damion Chaplin]

<div class='os_post_top_link'><a href='http://www.theregister.co.uk/2006/12/11/digital_downloads_flatline/' target='_blank'>http://www.theregister.co.uk/2006/12/11/digital_downloads_flatline/</a><br /><br /></div><i>"The leading DRM digital download service, Apple's iTunes, has experienced a collapse in sales revenues this year according to analyst company Forrester Research. Secretive Apple doesn't break out revenues from iTunes, but Forrester conducted an analysis of credit card transactions over a 27-month period. And this year's numbers aren't good. While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring's rebound wasn't repeated this year. And it isn't just Apple's problem. Nielsen Soundscan has grimmer news for prospective digital download services, indicating three consecutive quarters of flat or declining revenues for the sector as a whole... "The comparatively modest iTunes numbers suggest that consumers are still spending the bulk of their music budget $14-at-a-time on shiny discs," he writes. "iTunes sales are not cutting into CD sales," he elaborated to us, "they're an incremental purchase at best. "There's a problem here. CD sales have fallen 20 per cent over five years. The message here is not that CD sales are coming back, the ability to obtain pirated music is now so widespread the DRM looks to consumers more like a problem than a benefit.""</i><br /><br />This does not exactly come as a surprise to me. What I do find surprising is how everyone is hinting that this may mean the end of DRM-encoded music. I don't think we'll see the end of DRM anytime soon. Britain is working on a unified DRM scheme, and I think that's the way to go in the future. If we are to believe the studios in that DRM is in place to protect the artist, then DRM will always be needed. For those of us that absolutely despise DRM in all its forms, DRM-free files are still readily found on any CD.

[Janak Parekh]

It appears, however, that Forrester may be very, very wrong, and in fact iTunes sales may be rising, not falling:

http://ilounge.com/index.php/news/comments/comscore-itunes-revenue-surges-84-in-2006/

The consensus in the Mac blogosphere, at least, is that Forrester's numbers are too small a sample to be of meaningful use (and they warn as much). And now, precisely the opposite numbers seem to have been posted. Apple has also said that Forrester is flat-out wrong, although typically, they refused to elaborate. &lt;shrug>

--janak

[Vincent Ferrari]

Josh Bernoff... Who wrote the study:

Late Wednesday, Bernoff said he stood behind the research, but he emphasized a point in his findings that he says had been widely overlooked.

"The 65 percent number refers specifically to seasonality," he said.

In his report, Bernoff wrote "that it is too soon to tell if this decline was seasonal or if buyers were reaching their saturation level for digital music."

In other words, people aren't reading the report 100% correctly. That's not to say it isn't true, but it's not so easily distinguishable with the data we currently have.

Source (http://www.chicagotribune.com/technology/local/chi-0612140168dec14,1,4176959.story?coll=chi-technologylocal-hed)

[mjhamson]

You guys are reporting on this matter WAY late. Forrester already came out with a clarification a few days ago. Maybe you can pick up on that sometime next week. ;-)

-michael

[saru7755]

all i could say is that in the last 6 years i might have bought 5 CD's where i actually have mp3's worth over 50 CD's.. there is always a way of getting the Music u want for free.. :wink:

[jlp]

... I don't think we'll see the end of DRM anytime soon. Britain is working on a unified DRM scheme, and I think that's the way to go in the future. If we are to believe the studios in that DRM is in place to protect the artist, then DRM will always be needed. For those of us that absolutely despise DRM in all its forms, DRM-free files are still readily found on any CD.

Did you see there's a page 2 to the Register article??

in it you can read: "At the In The City music convention held in Manchester in October, Columbia UK boss Mike Smith predicted music would be DRM-free within 12 months. Sony BMG UK, which owns Columbia, has declined to elaborate on the comments..."

Also at the end of that page there's a link to the article titled: "Big labels are f*cked, and DRM is dead - Peter Jenner" on which you can read as an introduction:

"Few people know the music industry better than Peter Jenner. Pink Floyd's first manager, who subsequently managed Syd Barrett's solo career, Jenner has also looked after T.Rex, The Clash, Ian Dury, Disposable Heroes and Billy Bragg - who he manages today. He's also secretary general of the International Music Managers Forum."

Further you can read "The Big Four know that the DRM era is nearly over - and within two or three years, he predicts, "most countries" in the world will have a blanket licensing regime where we exchange music freely, for a couple of quid a month."


Jelpy