As sales of CDs plunged during the past decade, the music business clung to a comfort: downloads continued to sell briskly as folks stuffed their iPods and computers with tunes by the billions. Now even that conviction appears to have vanished, as downloads head toward their very first annual decline.
What Does It Look Like?
After experiencing double-digit growth within the past few years after its iTunes store was opened by Apple in 2003, track downloads began to cool several years back. However, the speed of fall this year — weekly sales started to lag in February, along with the fall has accelerated quickly recently — has captured the company by surprise.
So far in 2013, 1.01 billion track downloads are sold within america, down 4 percent in exactly the same time this past year, agreeing with the monitoring service Nielsen Sound Scan.
Music executives and analysts disagree about just what’s causing this slow down, but a lot of them mention two as potential causes: streaming music services like Spotify, Pandora and YouTube, and programs teaching students to make their own music from home. After a decade, consumers might be losing interest in purchasing downloads and instead embracing the providers, which will make millions of tracks available in the tap of the smartphone software, free or for a couple dollars per month.
Can Online Music Help the Industry?
But, some experts state that fast expanding earnings from streaming may eventually help turn the complete industry toward positive outcomes, even as downloads drop. This past year, streaming and subscription services created $1.03 billion in earnings, up 59 percent in the year before, agreeing with the Recording Industry Association of America, and a lot of these suppliers are reporting strong growth in 2013.
Whether streaming has had any demonstrable impact on sales stays intensely debated, although. Do YouTube and Spotify, which let customers pick the songs they perform, cannibalize sales, or direct listeners to songs they might purchase later? And do other radio-like companies and Pandora – - a similar feature was introduced by Apple, iTunes Radio, last month – - contend with revenue whatsoever, or only with radio?
“We just don’t realize that customers are leaving one to visit another,” said David Bakula, a senior analyst at Nielsen.
No matter the main reason behind the decrease in downloads, several analysts and executives say they’re bullish in the sector’s prospects, mainly due to the development of streaming.
Some research also indicates that Android consumers might spend less money on music than Apple customers.
“As Android enlarges its marketplace, and when Android users are much less likely than iOS users to purchase music, we ought to expect to find signs of developments in electronic revenue,” said Glenn Peoples, the senior editorial analyst at Billboard.
No publicly available revenue information directly supports this assumption, however, and it is disputed by others.
Some experts also indicate the upswing of Android products as a potential determinant within the fall in downloads. While phones using Google’s os now represent most of revenue, Google’s Perform shop stays eclipsed by iTunes, undoubtedly the dominant music retailer.