iTunes Sales 'Collapsing' 651
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."
iTunes 7.0 (Score:1, Insightful)
Why buy the cow? (Score:1, Insightful)
Legitimate users of iTunes have always confounded me. What with the way they dress and their holier-than-thou attitude.
The Register (Score:5, Insightful)
Speaking to The Register, Forrester analyst Josh Bernoff warned against extrapolating too much from the figures. It may reflect a seasonal bounce that hasn't yet manifested itself. However, it might not.
So maybe there's something going on... maybe not.
More than that, The Register is not exactly a trustworthy news source. Think of it as the supermarket tabloid of Technology News. I wouldn't be surprised to see something like 'Steve Jobs an Alien Lovechild' on it's front page.
Is the story full of it? (Score:5, Insightful)
The bigger question, though, is this: Does Apple really care? ITMS can't be making them any sort of profit compared to iPod sales; and iPod sales are still going up. All in all, Apple seems to be enjoying a healthy bottom line.
Re:Must just be the majors. The indies are thrivin (Score:5, Insightful)
*crickets*
I'm probably missing something and that's okay. Because you can analyze numbers to your hearts content, the point that all the "analysts" are missing is that most of the DRM'd music that's been released is backcatalog, plain and simple. Did it ever occur to anyone that many people probably splurged on legal tunes that they already loved and owned to get it onto their iPod (or whatever). Now that they have all the favorites/classics/etc., there is no reason for them to keep pace with whatever of the 70% crap that the industry pumps out.
Maybe the industry is just slowed down while they wait for Brittany, Nickelback and whatever shitty country singer to release their new album? Stop thinking that small decline in numbers means THE INDUSTRY IS DEAAAAAAD. It's ridiculous.
Tell ya what Apple... (Score:2, Insightful)
Re:Must just be the majors. The indies are thrivin (Score:5, Insightful)
Why would anybody buy a song they already own on CD???
Ripping a song from CD to either AAC or Apple Lossless is faster than downloading via a typical broadband connection.
iTMS is awesome for a very specific purpose: 1-hit wonders.
Anybody who makes an album of consistently good music, I'd rather hunt down a used CD and rip it to a Lossless file, but if I only want one or two songs from a particular artist ever, and I'm not too fussy about hi-fi sound, then $1 per song is a good deal.
Re:Tell ya what Apple... (Score:5, Insightful)
I'd like the XXL grain O salt please... (Score:5, Insightful)
Re:Must just be the majors. The indies are thrivin (Score:2, Insightful)
Re:I'd like the XXL grain O salt please... (Score:2, Insightful)
Re:Improve your product Apple... duh (Score:5, Insightful)
Re:The Register (Score:5, Insightful)
To the contrary. I think it's more authoritative than 95% of the "news" that's linked from here. (John Dvorak -- give me a break.) You may disagree with their opinion pieces, but that's another issue. And Slashdot submitters, thorough malice or stupidity, have submitted many of their joke pieces as straight news. They're not to blame for the non-existence of Slashdot's vetting system.
Re:54% of all statistics are misleading. (Score:1, Insightful)
WTF? How does Forrester get hold of credit card records? Don't financial institutions treat their customers' data as confidential any more? I think that's a bigger story than whether the ipod is doing well.
Credit Cards (Score:5, Insightful)
Where the hell did my tinfoil hat go ?!
Sales are down since January? (Score:5, Insightful)
For reasons earlier posters have done an excellent job of outlining, I'm skeptical about the article and its methodology, but even if they're correct is the situation really a grave concern for Apple? The (barely profitable) iTunes Music Store exists to sell (highly profitable) iPods, not the other way around. As long as iPod sales are healthy (and apparently they're very healthy) the effects of "collapsing" sales at iTMS would be secondary or tertiary concerns for Apple's digital music player business. Apple's big wins from the iTunes Music Store come through FairPlay DRM lock-in and influence in the music industry, neither of which is yet affected by these supposedly "collapsing" sales figures.
Lots of iTunes goes through gift cards now (Score:2, Insightful)
well of course (Score:3, Insightful)
Re:More to it than perhaps that (Score:3, Insightful)
The movies and TV shows are in crappy quality aimed at the iPod screen size too, so they're a gross ripoff given that they're priced like DVDs.
I'll take DRM over spyware CDs (Score:2, Insightful)
At that point, I pretty much went with iTunes 100 percent for my purchases, and audiophilism be damned - it's decent enough for my ears (lord knows why AAC has it all over Mp3s - is it the master tapes Apple touts? - I'd love to know).
Re:iTunes 7.0 (Score:5, Insightful)
Concerning iTMS, my theory is that CDs are so cheap (or rather iTMS et al are so expensive) that there is little incentive for people to download songs. $9.99 for an album really is a scam when often it is on Amazon on CD for $9.99 and sometimes less. It's easier to buy and rip the CD. A CD that you then own forever.
The 99c Challenge (Score:2, Insightful)
Re:Must just be the majors. The indies are thrivin (Score:5, Insightful)
In fact, building on your point about "hunting CDs down", I'd have to say that given the scenario where you want one favourite track of an old CD, and you know the CD is down in a box in a cellar, and you can't wait and you must have your music now (because you are a true child of the modern world and listening to music all the time wherever you are is a god-given right), then downloading that one track off iTunes is almost certainly faster than finding that CD in the box in the cellar, bringing it upstairs, ripping it
Re:Must just be the majors. The indies are thrivin (Score:4, Insightful)
There are dozens if not hundreds of bands where I like one song and one song only. Now it's possible to get just that one song and not pay for crap I will never listen to. The records companies are now reaping their just rewards for bad seeds they sewed 30 or 40 years ago.
The time for record companies to die is overdue. Please only buy music second hand, or directly from the artists.
Three Problems with iTunes (Score:5, Insightful)
Vendor Lock / DRM:
Why on earth would I pay hard earned money for a music format that locks me into a single vendor? iPods are spiffy and all, but your music collection becomes junk if you change to a non-Apple MP3 player. Yes, there are ways around this, but none of them are simple and easy lossless conversions. People are starting to see new MP3 players come out to compete with the iPod. Perhaps they are taking a second look at their music collections and asking if they want to be tied at the hip to Apple?
Pricing Scheme:
Other online music services offer alternative pricing schemes that might be eating into Apple's business. Rhapsody has an 'all you can eat' service for $15 / month. The music dies if you stop paying, but until then you get to pick from millions of song for the price of one over priced CD a month. For people who want to explore lots of music cheaply and don't feel an overwhelming urge to collect and horde music, this is a steal. iTunes offers nothing to 'explorers' who don't want to break the bank. Download every song written by the Ramones on a whim with Rhapsody and you pay the same subscription fee you always pay and think nothing of it. Do the same on iTunes and you are out $150 and just made a major purchase. iTune's pricing plan works for some, but not all. Their inflexibility to alternative pricing models might be costing them people that are looking for something other then a
The Long Tail:
I would be utterly not surprised to learn that online shoppers are go for back order items rather then Top 40 songs then 'normal' music consumers. If this is the case, then iTunes has a problem. Online shoppers are probably consuming back order items faster then new back order items (that people actually want) are created. If I decide that I just love 1990's Ska, at some point I am going to download all of the good 90's ska that there is. Top 40 is not going to make any new songs to replace this, so I will simply stop downloading. Consumers might be 'filling up' on the back order songs that they wanted and not finding anything new to continue consuming.
Re:Must just be the majors. The indies are thrivin (Score:3, Insightful)
Hell, I'm 26 and I've rebought a reasonable amount of stuff on CD or downloaded it that I have in tape only form. I wasn't CD only until I went to university in 1998.
The iTunes Music Store has real problems (Score:3, Insightful)
2) Woefully poor video quality. The quality of videos on the iTunes Music Store is atrocious. Even the average rip distributed illegally will be streets ahead. It's just like YouTube in terms of sound quality.. it's not even up to 128kbps AAC standards.
3) CDs cost the same. I don't know about the US, but I can buy an audio CD for the same price as an album on iTunes. iTunes is more convenient for singles, but I think most people over a certain age buy albums instead.
4) Convenience costs. You might get some convenience with the instant downloads, which I totally love, but it's at the cost of all the above.. AND the fact sound quality is worse than CD.
AllOfMP3 was one of the best things to exist and would have even been popular with a pricing scheme fair to artists and the labels.. but no, anyone who does something in a customer friendly way these days is bound to be shot down by the cartels.
But what about pre-paid cards (Score:3, Insightful)
Re:Front Row (Score:4, Insightful)
Even basic cable gives us too many channels to fit on a few "program guide" pages. To navigate those pages, wouldn't it be nicer to have PgUp/PgDn buttons like all modern tv remotes have? Heck, wouldn't it be nicer to have telephone-style number/text buttons to directly enter channel numbers and enter text for program searches? How about a simple "record" button to record what you're currently watching?
I haven't used the Apple remote to control dvr and tv tuner functions, so maybe Apple has done something very clever to make it simple. However, I'm pretty sure more buttons would make it simpler to contrl tv/dvr functions.
Re:DRM and the improved iPod alternatives (Score:3, Insightful)
Either you're rewriting history a little bit, or you're using a very different definition of really good than I would. The iPod was a relative latecomer to the digital audio player market, and to someone like me, who fancies himself something of an audiophile, it's still not really good. At most, Apple pedestrianized the DAP, introducing the concept to people outside of the techie and audiophile markets that already existed. It supports limited formats, has a lame, non-parametric equalizer, and a poor final stage.
What it does have is gorgeous styling, a comfortable UI, and a brilliantly smooth end-to-end player-to-software-to-store arrangement. To me, that makes it a popular portable player, not necessarily a really good one.
Re:Tell ya what Apple... (Score:2, Insightful)
As a friend of several independent aritists that distribute via iTMS, I can tell you that before iTMS, they could not make any money or get wide distribution of their music. Most independent artists don't have the money to distribute their music. While iTMS doesn't provide much in the way of revenue, it is a major distribution channel for them.
Re:More to it than perhaps that (Score:3, Insightful)
The benefits of DRM (Score:2, Insightful)
I must have missed a meeting. What benefits does DRM provide to the consumer?
Don't believe all you read from Forester (Score:1, Insightful)
Briefly, Forester just do a simple average of songs-sold-this-year against ipods-ever-sold and come up with 22 songs per iPod this year versus 20 songs per iPod last year.
Two problems:
1. that's actually a 10% increase, not a "collapse"
2. "ipods-ever-sold" loosely means the entire installed base assuming no breakages or
upgrades (we all know iPods break, and lots of people upgrade them), so the increase
per customer is probably greater.
So what does it all mean?
* averages are deceptive, especially in maturing markets
* iTunes growth appears to be slowing (or maybe not growing at the same rate as iPod sales)
* customers have other sources of music to rip (CD's for example), and maybe Apple doesn't care that much - they're still selling hardware
ie. not a collapse.
More experienced users (Score:2, Insightful)
When customers feel like a chump for giving you money they tend to stop doing it. Feeling like a fool far outweighs "doing the right thing." It's time for DRM to go.
not too surprising to me.... (Score:3, Insightful)
Re:More to it than perhaps that (Score:3, Insightful)
Supply and Demand (Score:3, Insightful)
For companies that sale popular products, saturation is a bitch.
Re:Must just be the majors. The indies are thrivin (Score:3, Insightful)
Who's touring these days? Just about every single one of the bands your parents grew up with that have enough members still alive and able to hold a guitar...not much else.
Who's putting out albums? Well, those 'retro' bands again for one. And the contrived band-in-a-box crap. And a million and one bands that consist of a 'pretty' face, cookie cutter songs, and not a single real instrument in sight.
Yes, as always, there are exceptions to the rule. But the mainstream music industry is absolutely and without a doubt WAYYYY out in left field these days.
Re:More to it than perhaps that (Score:4, Insightful)
Right. That would be as crazy as giving iTunes the ability to rip DRM-free music from CDs.
Re:Front Row (Score:3, Insightful)
I agree that the Apple Remote is an elegant implementation for Front Row's music, photos, videos, and DVD functions. However, I cannot see how those six buttons can be adequate for controlling dvr and tv tuner functions.
Spot on. I have a Mac mini. Loves my mini. Loves Front Row. Loves my remote. But I have about 2,500 songs, 50 movies, and in excess of 5,000 photos all wired in.
My kingdom for a PgUp/PgDn.
Re:More to it than perhaps that (Score:3, Insightful)
Re:Don't believe all you read from Forester (Score:1, Insightful)
First some more or less real numbers, accepting Foresters own methods of
using the installed base
iPod sales iTunes sales
Nov 2005 30M 20 per cust 600M
Nov 2006 68M 22 per cust 1496M
Increase 226 percent 249 percent
So unit sales on both iPods and iTunes are up iTunes more so.
What Forester appear to be focussing on is revenues for iTunes, which reading
between the lines they appear to further narrow down to average transaction
size falling (3 dollars now). They then compare that unfavourably to the average CD
price of 14 dollars and contend "no-one is getting rich on $3 transactions"
O contraire. Apples and oranges. The iTunes sale has a lower fulfilment
cost for Apple at the retail point, and much lower if you extend all the way
back into the distribution and supply chain. The bricks-n-morter outfit has
to pay everyone in that long physical tail.
So what we have is more frequent, but smaller size iTunes transactions - exactly
what that new-fangled digital economy is supposed to deliver.
I don't think Forester know what they're talking about quite frankly.
Re:Must just be the majors. The indies are thrivin (Score:3, Insightful)
No, not really, I don't.
"and I don't want to have the particular discussion that could easily ensue here."
OK. Guess I won't waste your time.
Me? I think anything an artist wants to use to make art is just fine. I get to decide whether I like it or not, without making normative statements about the "realness" of their chosen tool and medium.
There's lots of bad art. I still don't understand what a "not real" musical instrument looks like.
Re:RTFA (Score:3, Insightful)
Let me explain it real quickly why I like subscription services. Right now, I have 3488 tracks from my subscription service on my HD. That is 15.6 GB of music. That would cost me $3488 on iTunes. I have had the service for 10 months and have spent only $150.
As I said before, subscription isn't for everyone. I personally like to explore music. I don't care about the 'collecting' piece of it. I like to fire up Rhapsody, download a 3 or 4 albums on a whim because I heard one song or it was recommended, and then listen to them at my leisure. The Ramones example is a good one for me. One day I felt like listening to the Ramones, downloaded everything that I could, listened to it for a couple of weeks, then got bored and moved onto something new without looking back. I probably have not listened to any Ramones that I have downloaded in a few months and have been off merrily downloading like a nut jazz and old school Jamaican ska. That is how I prefer to explore music. I like to work on a whim, not bothering to waste time 'researching' a band beforehand, and simply listen and judge them based upon a first hand experience. I don't have any desire to "collect" music simply because, as with my Ramones collection, I am likely to not want to listen to it in a year. The stuff I listened to 5 years ago when I broke up with an ex makes me sick with disgust now. I still have those CDs somewhere, but what good do that do me if I don't listen to them?
I agree that a subscription style makes no sense for some people. If given unlimited downloads you still download less then $15 / month worth of music, of course you should not bother with a subscription service. If on the other hand you average the $300 a month that I do and you are not wed to a single style or taste in music that is consistent, the a subscription service makes perfect sense. Clearly, it isn't for everyone. On the other hand, it is pretty clear that it absolutely works great for some people.
I simply like the option to have a subscription service. No one is twisting your arm to use it. In Rhapsody you can pay the same price as iTunes and rip and backup just like iTunes. The difference is that with Rhapsody I at least have the option of a subscription service.