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iTunes Sales 'Collapsing'
Alien54 writes to tell us The Register is reporting that based on reported revenues this year iTunes sales are plummetting. From the article: "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."
I feel like this is the same story as "CD sales are declining!" The whole time you've heard that in the news for the past 6 years, physical CD sales for small independent artists has shot WAY up.
It's like you were looking at one of those stock charts that compares two different companies' stocks. The big famous artists would be that stock whose value has fallen from $100/share to $70/share. But the independent (mostly unknown) artists are like a $1 stock that is now at $5. It's more newsworthy to talk about the big visible stock falling, but the real story down here is in the huge boost that the indies have gotten from improved distribution / availability.
Check out this visual / geographic metaphor, too.
When there was only the iPod as a really good portable player, iTunes was the only game in town. Now when you can get decent quality alternatives, interoperability is becoming a much bigger issue and DRM is like a doorstop not letting anyone in.
And when people can't get into a particular venue, they'll look elsewhere. And science bless the internet, there's a lot to choose from these days.
Zoom Player Lead Dev.
I use a gift card. Is that tracked like the credit card sales?
Must be a slow news day in the UK, I guess...
...it doesn't. Movies, TV shows etc . are also part of the menu, so much so, that some are wondering how much longer Apple can call it the 'iT Music Store'.
By reading that article (burn job de' jour), and most of the comments here so far, you'd think iTMS only sells music. Man - talk about tunnel vision.
Ok, so for the sake of whatever, we'll ignore the other digital fares for a moment, and talk about music sales out of the iTMS. Check the calendar...what, a dozen days from now and Santa will do his fear-factored chimney drop, right? All those USD$79.00 2G iPod Shuffles that are being stuffed into stockings as we speak, along with untold tens of thousands of other iPods & iMacs, are going to come online all at once. The bounce for the iTMS will not be trivial, in any case, easily echoing well into 2007 - perhaps just in time for the iTV, iPhone & wIdescreen iPod to hit the shelves and then...bamn...another bounce.
Collapsing - give me a break. The only thing collapsing is the patience of Apple's shell-shocked competitors, as they try to endure being dragged around the town square behind a team of slathering wild horses...again.
I think there's more to the declining sale than just a release of iTunes 7.0. I'm no expert on how things are going but it seems Apple is expanding a bit too much as to what they offer in the online store. First, we had just plain ol' music. And that's fine given the iPod can only play music. Then it expanded to photos and then videos. Soon the store offered some music videos... then TV episodes... and now movies...
Maybe it's because of other things... but my feeling and opinion is that Apple should have stuck with music overall instead of expanding into selling music videos, TV shows, and movies.
~ Old Warriors Society
The Register is not exactly a trustworthy news source. Think of it as the supermarket tabloid of Technology News.
The Register and the Inquirer (founded by the creator of the Register after losing a power struggle at the Register) never sign NDAs. That means that they rarely get the inside scoop. But, it leaves them completely free to report whatever they dig up, whenever they dig it up.
So, you have your choice - Press Release journalism from places like Anandtech, Tom's Hardware, etc or "You'll know it as soon as we know it" from places like The Reg and The Inq.
Pick your poison. I choose the later - better to get it wrong by accident than by some PR flack's direction.
When information is power, privacy is freedom.
The fantasy of iTunes lock in is rather weak. Anyone downloading iTS music is unlikely to be freaked out by some hypothetical loss in quality from buring to a CD and reimporting it. It wasn't high end audiophile stuff to begin with, so anyone who could hear the difference woundn't be experiencing the problem.
Vendor lock in is not Apple's plan, its the fantasy of people trying to vilify Apple for selling a good product. There is minimal profits with selling RIAA music, since Apple only gets a few cents anyway. The real money is going to the RIAA, or in the case of iTS indies like CDBaby, the artists. The value Apple adds is the service and convenience, and that makes its overall system of iTunes and the iPod more attractive. That's why iTunes doesn't work with other music players, and that's where Apple makes its money: the iPod hardware.
Microsoft thought the money was in downloads, so it set up PlaysForSure to inject itself into stores and players to make tax money on every song moving around. Unfortunately for them, there was no volume of songs being sold. The new Zube is hoping to make money on hardware sales, but because its priced to compete with the iPod, its not making any money either. And subscriptions aren't going to result in anything either - Microsoft bet the farm on music rentals, and consumers are clearly even less interested in signing up for music rentals that they are about buying tracks online.
No amount of analysis studing the buying habits of 7000 people, less than half of whom even use the iTS, will tell you much about how well the iTunes store is doing. Apple's own numbers make it clear that everyone with an iPod isn't buying music. In fact only a minority are both willing and able, since the store doesn't sell music worldwide.
Apple is building a platform based on hardware profits, the same thing it has always done. Microsoft is trying to tax a system with licensing fees. The difference is that in this arena, Microsoft doesn't have cheaper, higher volume hardware sales to ride. It's trying to ride a minority of the market: a fraction of the installed base, made up of less profitable hardware. It has further splintered its efforts by breaking the Zube off from PlayedForSure.
The other missing component between the PC business and the music player business is that music players don't need specialized software, they can run the same music users already have. So Microsoft is also lacking an equivalent to Office to sell its music customers. This is not another Windows.
Why Microsoft Can't Compete With iTunes
Newton Lessons for Apple's New Platform
Instead of blowing us off as some elitist snob iTunes lovers, why not consider that money isn't always a huge factor for some people? The convenience alone is worth the price of entry.
iTunes is treating the world outside the US like an unwanted stepchild. Many of the records that are available in the US shop and which are available on CD here in Europe cannot be bought from the iTunes Store. So, what do they expect me to do? I bought a lot of music from iTunes when the store came to Sweden in the first place, but when even such main stream things as a Disney soundtrack isn't available outside the US, it is no wonder people are heading back to the torrent sites (or record stores for that matter).
I've backfiled my collection to a small degree from iTunes. Mostly in the 1-2 songs per album way you describe. I agree 100% with the original poster. I purchased just about all I'm going to purchase from iTunes because I have a pretty solid collection now. New music is total garbage and because of this, my iTunes purchasing habits have mirrored exactly what has been described - slowed to a snails pace.
Prof. Farnsworth - "Oh a lesson in not changing history from Mr I'm-My-Own-Grandpa!"
People are lazy. People are stupid. People do stupid and lazy things.
Yup, a Senior and her parents at my daughters high school tried to SUE another student for the cost of all her music on her ipod because he erased her ipod in class as a joke.
The funny part is people ARE most certainly stupid, they don't even understand that plugging the ipod back into the computer will load all the music back on. These are really rich business executives and their child. Too stupid to understand, too lazy to even take a couple of minutes and read or even plug the stupid thing back in and watch it start automatically. (I guess their time as well as their childs time is EXTREMELY valuable)
Says a lot about the state of intelligence in the world.
BTW: it took their lawyer to explain to them the extremely complex operation of the Ipod before they understood what others told them many times.
Do not look at laser with remaining good eye.
The writer is Andrew Orlowski, folks.
.Net was inaccurate starting from the title. Those quotations which are accurate are taken out of context, leading to total misunderstanding," is can be found here.
For those of you who've known The Reg for a while, that statement should be enough. For those of you who are newer to it, he leans more toward sensationalism and opinion masquerading as journalism than toward things like taking statements in context and checking his facts.
He's the one who started the non-conflict between Richard Stallman and Miguel de Icaza over Mono. The original article is here. Stallman's response, which begins with "Your article about me, GNOME and
Orlowski also had (and possibly still has, I stop reading whenever I see his name in the byline) a grudge against Google. He did a whole series of pieces about 'googlewashing', in which he accused Google of censorship, and another series in which he argued that Google News isn't Real Journalism.
On the few occasions where I've exchanged email with him personally, I found him rude, hasty, liberal with insults, and generally a putz. Back in Usenet days, he would have been called a classic flamer.
To the extent that there are real facts in this article, I don't know what they are, and I don't trust Orlowski to have presented them in any way but the one that makes him look like a daring investigative reporter breaking the scandal of the century.
Even assuming the premise of the article is true, and that Itunes Store sales have fallen dramatically, Apple will be the last one to care. The iTunes Store doesn't do much more than break even.
And for the sake of completeness, I should state my own bias by mentioning that I've spent a couple hundred bucks at the iTunes store over the last year. I'll probably do the same next year, for whatever that happens to be worth.