In 2016, Apple is managing two digital-music services: its iTunes downloads store and its Apple Music streaming service.
So when will it turn off the former to concentrate fully on the latter? 2020, claims industry consultant Mark Mulligan, in a blog post titled ‘After the download: When Apple turns off the iTunes Store’.
In it, he suggests that the incentives will include streaming revenues being considerably greater than downloads income, but also the wider strategic role of Apple Music as an entry point to Apple’s overall services.
“Last year downloads declined by 16% in nominal terms. This year they are tracking to decline by between 25% and 30%. If we trend that forwards there will only be a modest download business of around $600 million by 2019, down from a high of $3.9 billion in 2012,” wrote Mulligan.
“For Apple, if it continues to grow its subscription business at its current rate, hitting 20 million subscribers by end 2016 and around 28 by end 2017 etc, by 2020 its download business would be tracking to be 10 times smaller than streaming revenue but, crucially, streaming revenue would nearly have reached the 2012 iTunes Store download revenue peak. This is the point at which Apple would chose to turn off the iTunes Store.”
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