Analysis

Digital albums overtake CDs in the US, but iTunes music revenues down


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Screen-Shot-2014-02-10-at-10.03.28-AMTwo separate but related stories shed more light on the shifting sands of the digital music market today. First, there’s Billboard’s piece on US album sales figures so far in 2013, noting that of the 22.99m albums sold by 4 February there, 11.18m were downloads while 11.1m were CDs.

This, compared to CDs’ 57.2% share of the US album sales market last year, although when vinyl and other physical formats are added in, physical still accounts for a 51.4% share of US album sales so far in 2014.

The second story is a piece of analysis by Asymco on Apple’s financials, which is making headlines for its claim that if iTunes was a standalone company, it would be “ranked as number 130 in the Fortune 500 ranking of companies”.

We’re more interested in its estimates for the revenue growth in 2013 of the various content categories in iTunes: apps up 105%, video up 19%, but music downloads down 14% of the year.

Streaming music’s impact isn’t a surprise, but it’s good to have more data to quantify what’s happening – albeit without the corresponding global increase in revenues from streaming services.

The temptation is to suggest that iTunes music downloads revenue shrinking may push Apple into a faster rollout of its iTunes Radio service around the world, or even nudge it towards a full on-demand streaming service.

But caution is advised: those doubling app revenues are a reminder that Apple has other content fish to fry nowadays, reducing the pressure to hurry its response to streaming cannibalisation of download sales.

Stuart Dredge

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