iTunes Sales Not 'Collapsing' After All

john82 writes "Earlier this month we had a report from Forrester, based on a random sampling of 2,000 credit card accounts, that purported to show that iTunes sales were crashing. Now comes another survey from Reston, VA-based ComScore which indicates the exact opposite. ComScore's report which is based on actual iTunes sales shows a 84% increase during the first nine months of this year compared to the same period last year. Meanwhile the author of the Forrester report, Josh Bernoff, noted in his blog yesterday that they shouldn't be pummeled just because everyone took what he wrote and ran with it."

Comments

Own up to your reporting

[BWJones]

Meanwhile the author of the Forrester report, Josh Bernoff, noted in his blog yesterday that they shouldn't be pummeled just because everyone took what he wrote and ran with it."

Well, that is why people should be responsible for their reporting. In my business, when you report something, you stand by it. If you present data or a theory with the suspicion that it is incorrect, that is fraud in my line of work. Seriously though, did you *really* think that a sample size of just over 1000 purchases on credit cards obtained through a back channel source is a reliable sample size for the number of iTunes purchases? If I correctly recall, Apple announced back in February that they were selling about 3 million songs/day and if the current estimates of increases on the order of 84% are correct, your sample size is woefully under-representative. Thats just high school statistics by the way...

I am not saying that you should lose your job over this one, but this should be a tacit reminder of how important good reporting is and if you are beyond your means or competence on a particular story or analysis, go find some help before you publish it, do some fact checking and be more careful with stories that can have a significant impact on companies and individuals.

Re:Own up to your reporting

[RichPowers]

Indeed, he should stand by his work. But all of the websites and blogs weren't afraid to use Mr. Bernoff's report to drum up an Apple doom-and-gloom story for the sake of attracting readers.

Re:Own up to your reporting

[ceoyoyo]

A sample size of 1000 isn't necessarily inadequate... it depends on how much variance there is in the population and how big a change you're seeing. Those factors are normally summarized with a p-value, indicating how likely you are to be wrong.

Naturally they didn't collect enough data to calculate a p-value... THAT was their mistake. Of course, nobody seems to do that, so really, it's par for the course.

Re:Own up to your reporting

[ceoyoyo]

Problem is, you have to know that critical "how many purchases are iTunes purchases" value.

The proper place to start is by taking last year's data (or last month's, or whatever) and measuring that value, then measuring it again today. Then you can ask the question whether iTunes sales have changed or not. Once you've shown there's a high probability that they've decreased (that might take ten samples, or it might take millions), THEN you can talk about how much they've decreased, and what sort of error bars go on that value.

According to the original story they DID that, collecting data from 27 months... the difference between +80% and -60% is pretty huge... either they didn't do a simple t-test on their data, this was a VERY rare fluke or they decided to release their numbers anyway.

It definitely sounds like they were paid for their result... I wonder if maybe they didn't expect someone with much better data to come around so quickly to slap them down.

I also like the quote in the article about iTunes 1 billion dollars in sales not making up for the 2.5 billion dollar decrease in CD sales. Sounds about right to me. I doubt I'd purposely pay for more than a third of most albums.

Re:Own up to your reporting

[lendude]

That sentence you quote is having it both ways:

"Our credit card transaction data shows a real drop (my emphasis) between the January post-holiday peak and the rest of the year, but with the number of transactions we counted it's simply not possible to draw this conclusion . . . as we pointed out in the report."

There is no way that he can use the words "...real drop..." in the same sentence as "...it's simply not possible to draw this conclusion...". Whilst those who uncritically took the information from this 'research' and used it (doubtless with some sensationalistic agenda in mind) deserve scorn, that very sentence itself demonstrates the research to be nothing more than PR to flog the thing at $249.00 a pop. If you take out the words "real drop" and substitute "no meaningful change" then this report was clearly worth fuck-all: at least in terms of the author's now visible desire to have something sexy to sell!

Re:Own up to your reporting

[MrMickS]

Most people didn't refer to his report. Rather they referred to an article on The Register instead. The author of The Register article has a history of anti-iTunes store articles and an anti-DRM agenda. He took what he wanted from the report to back up his viewpoint. The real problem is the way that this was swallowed by the rest without checking the source themselves.

Sadly this seems to be the deal in journalism at the moment. Everything is sacrificed in order to be first to publish or, if not first then, not too far behind. Accuracy appears to be sacrificed in the race to publish.

liars, crooks, and analysts

[joe_bruin]

Technology sector analysts, the likes of Forrester and Gartner, are essentially paid mouthpieces for their biggest clients. Whether pumping your own products or badmounthing the competition, you can count on these guys to earn their money with totally bogus conclusions.

Find a big analyst company that will admit that Itanium is a colossal disaster, that businesses don't want and don't need Vista, that HP's supply line trouble and incompetent management are sinking the company (particularly during the Carly years), that Oracle is terribly insecure. You won't, because they all have contracts with Intel, Microsoft, HP, Oracle, etc. But they won't hesitate to beat up on Sun (how many times have they called for McNealy's resignation), AMD, Apple, and predict their doom*, and others that don't spend the kind of money on various analysis contracts.

So sure, iTunes sales are collapsing (according to Forrester), but nobody will call Zune a turd. It's all in a day's work.

*disclaimer: I might be considered a fanboy of one of these companies, and it's not Apple

Gift Cards

[Foerstner]

For that matter, the Forrester data was based on credit card payments on the iTunes Store.

It totally ignored the little lime-green $15 gift cards that litter the checkout stands of every Target, Best Buy, CVS Pharmacy, and Kroger in the US. Each one of those is 15 songs, and fifteen purchases that don't register as credit card transactions.

from Josh Bernoff's blog

[defy god]

He concludes with this statement in his blog:

"Finally, a word for Apple. Apple is extremely stingy with information about their business and public comment. Their unwillingness to comment on the record or off about anything they're working on or any industry results beyond the basic statistics fuels speculation, pro and con, from their supporters and detractors. In the research business we like facts -- and every other technology company is more open with them. So maybe it's time for Apple to share a bit more. When the real bad news hits -- and it's inevitable, no company gets everything right -- that openness would pay off."

To a degree, he has a point. With Apple's secrecy, articles like these are run without having all the facts. Sensationalism becomes rampant. Then he has to go and say "In the research business we like facts." All too often we read more about speculation rather than facts from these research companies. They complain secretive companies like Apple or Google don't give them enough information, but I wonder where the actual "research" in research business has gone.