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caccamolle
Dec 12, 2006, 10:39 AM
wow, I just read this, I find it quite surprising, if not shocking.

I just can't make sense of the figure: is it that in general music sales have dropped so dramatically or is it that people are buying elsewhere ?

Any comments ?



MacRumors
Dec 12, 2006, 10:57 AM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

According to a report published by The Register, digital music stores including Apple's iTunes Store may be seeing a sharp decline in sales (http://www.theregister.co.uk/2006/12/11/digital_downloads_flatline/) this year.

The report is based off of an analysis of credit card transactions over a 27 month period. While the beginning of the period showed steady growth, months since January 2006 have apparently shown revenue decline as much as 65% (with the average transaction size falling 17%).

And it isn't just Apple's problem. Nielsen Soundscan has grimmer news for prospective digital download services, indicating three consecutive quarters of flat or declining revenues for the sector as a whole.

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.

The report is surprising in that Apple has routinely given the impression that the iTunes store has been doing well. During Apple's 3rd Q 2006 conference call, Apple estimated that it had 85% of the legal download market (http://www.macrumors.com/pages/2006/07/20060719164004.shtml). This year also saw the addition of full-length movies from Disney to iTunes, of which 125,000 were sold in the first week (http://www.macrumors.com/pages/2006/09/20060919142943.shtml) (generating $1 million in revenue for Disney during that time period).

Admin side note: we apparently have lost posts made in an original thread during a thread merger. not entirely clear what happened, but it does not appear that the other thread is recoverable at this time. sorry to those who's posts were lost. I'd ask you keep this thread on topic, and not respond to this note in this thread..

If you want to discuss this, you can reply to this thread:
http://forums.macrumors.com/showthread.php?p=3143635#post3143635 (http://forums.macrumors.com/showthread.php?p=3143635#post3143635)

Katharine
Dec 12, 2006, 11:01 AM
Could more people just be using pre-paid gift cards?

tk421
Dec 12, 2006, 11:04 AM
Could more people just be using pre-paid gift cards?

Maybe. I know one person that buys a lot but only uses pre-paid cards. And I usually get a gift card or two a year that I use.

Still, I don't think that alone could account for that large of a drop.

AvSRoCkCO1067
Dec 12, 2006, 11:04 AM
Maybe. I know one person that buys a lot but only uses pre-paid cards. And I usually get a gift card or two a year that I use.

Still, I don't think that alone could account for that large of a drop.

Seconded - there's no way 65% of iTunes purchases are being made via gift cards.

longofest
Dec 12, 2006, 11:05 AM
Could more people just be using pre-paid gift cards?

I don't know... It feels like the entire article is a little hokey, so I don't know how much weight we should put into it. We know that Apple doesn't make a ton of profit off the store, but when they add $10+ movies and they sell at a clip of 125,000 a week, you can't tell me that they are loosing revenue THAT badly.

HiRez
Dec 12, 2006, 11:08 AM
Am I the only one who's a little creeped out by the fact that these credit card companies are crunching data on our bills about specific items? I'm not the least bit surprised because they are scum, but it's kind of scary. Oh, I know they'd probably say it's all aggregated data and no personal information can be compromised, but does anyone believe that?

Clive At Five
Dec 12, 2006, 11:09 AM
If Apple is only making pennies on this anyway, who cares? It's not like people aren't buying music anymore. It is still being purchased, ripped and played on an mp3 player. For as long as the iPod is the player of choice, Apple should be sufficiently pleased.

-Clive

topgunn
Dec 12, 2006, 11:12 AM
When iTunes was first released, everything was new. After the first few months, people had gotten the available songs they wanted. Now, those customers simply wait for new songs they want to be released.

The inital surge and the subsequent drop should have been expected.

Cinematographer
Dec 12, 2006, 11:12 AM
Am I the only one who's a little creeped out by the fact that these credit card companies are crunching data on our bills about specific items?

That's exactly what worries me too. :mad:

kentrox99
Dec 12, 2006, 11:15 AM
I bet all music consumption is down. IMO, there hasn't been anything worth buying in a long time. Frankley i beleive the quality of the current music is not worth my money now

jeremy.king
Dec 12, 2006, 11:15 AM
They studied every credit card transaction since Jan? right :rolleyes:

Only Apple knows Apple's iTMS sales trends - I don't have much faith in those numbers, at all

Ha ze
Dec 12, 2006, 11:17 AM
does this include Debit card purchases? cause I have my iTunes setup with my debit card

balamw
Dec 12, 2006, 11:19 AM
Seconded - there's no way 65% of iTunes purchases are being made via gift cards.
The previous thread about this seems to have disappeared in a failed merge. The thread was here: http://forums.macrumors.com/showthread.php?p=3143367 titles "iTunes sales apparently fown 65%"

This seems to be typical disinformation, damn lies and statistics. What seems to be down 65% is the rate of increase of sales not the sales themselves.

It's kind of like the way that congress "cuts the budget" by spending more than they actually did last year, but less than what they had anticipated.

B

longofest
Dec 12, 2006, 11:20 AM
does this include Debit card purchases? cause I have my iTunes setup with my debit card

The statistics would have shown a similar trend before January as well. Of course there will be Debit card purchasers, just like there will be some folks who use the PayPal option that Apple put in. But the idea I guess that the report is trying to get is that the trends will be the same amongst all of the purchasing options.

longofest
Dec 12, 2006, 11:23 AM
The previous thread about this seems to have disappeared in a failed merge.

We may have had a rift in time/space and it looks like a few posts were gobbled up during the merging process for some reason. Sorry for anyone's comments that were affected by the thread merge failure (we're looking into it). Post on...

apb3
Dec 12, 2006, 11:24 AM
Yeah both of my insightful/brilliaant posts are gone.

Basically, this is not a drop in sales or profits. Simply a drop in the rate of increase.

But the media (the ones with there own agendas anyway - aside from reporting news) love playing on the vast majority of people's ignorance or ambivalence in all things economic to further their own theories - as flawed as they may be.

miketcool
Dec 12, 2006, 11:24 AM
Haha, I initially read, "Apple Stores Experiencing Drop".:eek:

Ok, song downloads have tapered off. As long as its system wide and not just Apple's problem, eh. Did CD sales suddenly pickup? I doubt it, but that would be actual news:

"Internet sales down, physical sales up".

alec
Dec 12, 2006, 11:25 AM
does this article explain the 2.5% drop in Apple stock today?

thejakill
Dec 12, 2006, 11:26 AM
i don't find this hard to believe. many people probably went and got digital versions of older songs they had on tape or records. i know i did.

so my initial purchasing was a lot higher than it is now. most of the itunes songs i bought were from 2-3 years back, when it was new.

zigziggityzoo
Dec 12, 2006, 11:26 AM
Credit cards are not the only form of payment accepted...

I personally use PayPal, as well as gift cards.


On another note: Could it possibly be the music industry's fault? I mean, they are the ones imposing strict DRM and taking all of the money for themselves. And the artists could have some fault for not putting out much quality music lately. I mean, Fergie? Come on.

kingtj
Dec 12, 2006, 11:28 AM
Truthfully, once people fill up the capacity of their music player's hard drive, they're often pretty much satisfied. It's just like back in the late 80's when I was trying to build up a nice collection of music CDs. I got to about 150 or so, filled up the "CD storage tower" I bought, and figured my collection was pretty nearly "complete".

The typical person can only think of so many artists and albums of music they want to own, anyway. I know several people with 30GB iPod videos who only have them about half-filled, and they've pretty much stopped buying or collecting any more music for them. Basically, they listen to a certain collection of music, and only rarely want something new that comes out.


When iTunes was first released, everything was new. After the first few months, people had gotten the available songs they wanted. Now, those customers simply wait for new songs they want to be released.

The inital surge and the subsequent drop should have been expected.

whawhat
Dec 12, 2006, 11:29 AM
i agree w/ most of the posts. the one thing that people need to keep in mind is that the itms is just a way to sell more ipods, which is where apple is making most of it's $$$. if the ipod starts slipping, that would be more of a concern.

welcome to the party micr%soft. ;)

ChrisA
Dec 12, 2006, 11:30 AM
I'm really not surprised. iTunes is not a very good deal. $1 per track is about the same price as buying a CD, give or take and the quality (of 128Kbps AAC) is not very good. If CDs are the same price I much prefer the CD. Downloads need to be priced at about 1/3 the CD price. It can be done. Check out emusic.com they sell digital tracks of better quality than iTunes for $0.25 each.

I think what's happed with iTunes is the same thing as when CDs where new. Most CDs then were "back catalog" re-releases of vinyl albums. People bought the CDs fast and then "caught up" and after that only bought a recent release now and then. I think the same has happed with iTunes. The Apple music store is mostly "back catalog"

I remember when I thought "Cool, I can get John Coltrane on CD now" and I did I have a dozen of them . But he ain't making any more records so now I have to wait for something I want to come out and it does now and then but when CDs were new there were many hundreds of CDs I wanted. Possibly it is the same with iTunes. When you buy a new iPods there are hundreds of tracks you might want, but then after you have those

Maybe an analogy. You have a tank with all the air removed, just a vacuum inside. That is like an empty iPod. You crack the valve and let air in. At first it rushes in until the pressure equalizes. After that you just get a slow exchange of air

scott523
Dec 12, 2006, 11:32 AM
does this article explain the 2.5% drop in Apple stock today?
Ouch could be, looks like a good time to load up AAPL before MWSF '07. :D

In reaction to the iTunes drop in revenue. I think Forrester is just overreacting. They think iTunes is a big hit forever and ever but that shouldn't be expected. Put it this way, iTunes is like a stock company. In 2005, iTunes was like an IPO, which skyrocketing sales. Now, iTunes is nothing more but a regular stock that would have a drop in sales every now and then.

Motley
Dec 12, 2006, 11:33 AM
Yeah both of my insightful/brilliaant posts are gone.

Basically, this is not a drop in sales or profits. Simply a drop in the rate of increase.

But the media (the ones with there own agendas anyway - aside from reporting news) love playing on the vast majority of people's ignorance or ambivalence in all things economic to further their own theories - as flawed as they may be.

It's the register, they hate DRM and the itunes store for using it. So of course they're going to spin it as doom and gloom.:rolleyes:

brepublican
Dec 12, 2006, 11:34 AM
I mean, Fergie? Come on.

Seconded.

Flowbee
Dec 12, 2006, 11:34 AM
When iTunes was first released, everything was new. After the first few months, people had gotten the available songs they wanted. Now, those customers simply wait for new songs they want to be released.

Well, the iTunes store has been around for more than a "few months," so we would have seen the effect you're describing a long time ago. And besides, Apple is still selling millions of iPods, so the number of new iTunes store customers should be replenishing itself.

Guess we'll need to wait until Macworld to find out iTunes sales numbers. Steve always announces them as part of his keynote (in the rosiest way possible, of course).

kresh
Dec 12, 2006, 11:35 AM
I really suspect that there is going to be a great push this year to demonstrate the need for Media Players to have and pay a sold called "Piracy Tax" upfront on each player sold.

Microsoft has led the way with a paltry $1 per Zune sold to be given to Universal. Now the studios are going to drum up any research they can to show the need to collect their royalties upfront.

It's going to be interesting. Will Apple cave and add $20.00 to every iPod in this naked money grab by the studios?

Does anyone doubt who commissioned this study by Neilson?

ChrisA
Dec 12, 2006, 11:36 AM
Credit cards are not the only form of payment accepted...
I personally use PayPal, as well as gift cards.

True but if the goal i to compare this quarter sales with last quarter's sales and all yu want is a ratio. So you can say "They sold only 80% as much stuff this year as last. Then you could track just PayPal and ignore Visa cards and pre-paid gift cards. As long as you can assume that proportion of payPay to credit card to gift card remains constant looking at only one component is valid.

nemaslov
Dec 12, 2006, 11:38 AM
Truthfully, once people fill up the capacity of their music player's hard drive, they're often pretty much satisfied. It's just like back in the late 80's when I was trying to build up a nice collection of music CDs. I got to about 150 or so, filled up the "CD storage tower" I bought, and figured my collection was pretty nearly "complete".

The typical person can only think of so many artists and albums of music they want to own, anyway. I know several people with 30GB iPod videos who only have them about half-filled, and they've pretty much stopped buying or collecting any more music for them. Basically, they listen to a certain collection of music, and only rarely want something new that comes out.

I guess I am unusual. Have about 8000 CDs and my 80GB iPod is full with about 19,500 songs. I love to have a huge collection to leave at my studio where I work or have a plethora of tunes with me when I travel.

HiRez
Dec 12, 2006, 11:38 AM
I think Forrester is just overreacting.Wait a minute, financial researcher/analysts overreacting?? That's crazy, that never happens! Especially with a stable company like Apple. Why it's as solid a buy as good old American car manufacturer stocks...er...*cough*...

Matthew Yohe
Dec 12, 2006, 11:39 AM
JFC, MacRumors and Appleinsider have been wearing out the question mark key in their latest headlines.

iTunes Store Seeing Revenue Crunch?
Aqua To See Leopard Refresh?
iPhone not at Macworld Expo San Francisco 2007?
Public Beta of Adobe Creative Suite 3?
Three New iPod Models in 2007?
16GB Flash-based iPod Video Player?

Please find alternative ways to write a headline.

whatever
Dec 12, 2006, 11:40 AM
Seconded - there's no way 65% of iTunes purchases are being made via gift cards.

You'd be very surprised. Quite a few parents buy their kids iTune giftcards. You can buy them everywhere (I see them at the checkout line next to gum at my food store) and you can also cash spare change in to buy them. So if you're a kid without a credit card the easist way to buy music is with iTune gift cards.

Also don't forget allowance accounts too.

FoxyKaye
Dec 12, 2006, 11:40 AM
It might be BitTorrent's effects as well - after music libraries hit a critical mass, folks are uploading them and downloading new music from other people's libraries. The general filesharing mindset seems to be "it all washes out in the end," so even if someone paid for the music in their library that they're uploading, they won't have to pay for new music they're downloading.

I want to say that Apple's DRM is also to blame here too, but I don't think it could have *that* big of an impact on the market. This is based on the assumption that the average music listener wants to hear songs on their computers and iPods, and that's about it - only the Geeks stress over file portability, and that's not a big market.

apb3
Dec 12, 2006, 11:44 AM
It's the register, they hate DRM and the itunes store for using it. So of course they're going to spin it as doom and gloom.:rolleyes:

Yeah... My second insightful/brilliant lost post questioned those who rail against DRM schemes just cuz they can.

It's not that hard to burn iTunes purchased media to CD/DVD and re-rip them to lose the DRM. Sure, an extra step and a pain in the ass if you're pirating music, but I'm not bootlegging any music/videos/movies so it isn't a big problem if I want to be able to play my iTunes store music on another device.

If the Register had Intellectual Property they wished to protect, you can bet their IP would be wrapped in layer upon layer of DRM.

And, Apple's DRM is more than fair in my book for "Fair-Use," etc...

Kirkmedia
Dec 12, 2006, 11:47 AM
It was only a matter of time before society rejects DRM. My hunch, is that
illegal file sharing is on the rise. Brace yourself for the Ipod(MP3 player) tax.

apb3
Dec 12, 2006, 11:48 AM
I mean, Fergie? Come on.

Uh oh..... I bought Fergilicious.... I have this cheesy, crappy music Dark Side.

I also bought Paris Hilton's "If you think I'm Sexy..."

Although, no one complains when it comes up on a mix:p

iJawn108
Dec 12, 2006, 11:50 AM
i've just started buying more songs online. I just got an album last weekend from itunes, but I don't buy everyday. It's maybe 3 songs a month kinda thing like if I want to support the artist or can't ummmm errr find it(know what I'm sayin lol).

MacVault
Dec 12, 2006, 11:51 AM
That's exactly what worries me too. :mad:

Yea, welcome to 1984!

apb3
Dec 12, 2006, 11:51 AM
It was only a matter of time before society rejects DRM. My hunch, is that
illegal file sharing is on the rise. Brace yourself for the Ipod(MP3 player) tax.

Not being a jerk - at least I hope not - but please explain why you think this is so. See my post above.

Aren't inddividuals entitled to protect their IP? (while allowing for reasonable fair use by conumers)

Le Big Mac
Dec 12, 2006, 11:52 AM
I bet all music consumption is down. IMO, there hasn't been anything worth buying in a long time. Frankley i beleive the quality of the current music is not worth my money now


There was an interesting squib in yesterday's NY Times that said the average number of songs sold per ipod sold has remained flat at about 22 per ipod. The point of the number was that people weren't continuing to buy music for their ipods, whereas one would expect that as people have them longer they continue to add music (of course, maybe they're buying more ipods too). It also ran near a story on the demise of Tower Records.

It's interesting because I think the problem this poster notes is true--people feel music is less worth buying. But I think that goes to a larger problem--marketing. It seems much harder to market new music now than in the past. People don't listen to the radio, they listen to ipods. People don't go to music stores that advertise new music, and maybe even play it. As great as it is to have a huge database of music on iTunes, I simply don't care to "browse" the store like I used to browse tower records or other music stores (Newbury Comics, anyone?). Maybe I'm alone on this, or maybe it's a big problem.

MacVault
Dec 12, 2006, 11:54 AM
Get rid of the DRM and I will start buying music/videos/movies from iTunes. Until then the recording industry and iTunes Store can take a hike. And it's not that I want to share my files illegaly. I just don't want to pay for something that needs to be "unlocked" in order to use (listen/watch) it.

iMeowbot
Dec 12, 2006, 11:55 AM
This seems to be typical disinformation, damn lies and statistics. What seems to be down 65% is the rate of increase of sales not the sales themselves.
It's not even that clear, the drop in growth looks more like 50% (via SoundScan).

The Forrester numbers would only make sense if some other download service has miraculously grabbed a huge chunk of market share from iTS.

shunpike
Dec 12, 2006, 11:56 AM
in relation to the credit card bill snooping

WELCOME TO 1984

zim
Dec 12, 2006, 11:57 AM
Apple needs another giveaway to drum up sales :)

For the last few months I have been buying my music with gift cards (I have them emailed from the store to myself). I got sick of marking down all those .99 purchases in my bank records. With the gift card I just have to mark down one $10 item. I have also noticed that my music purchasing has slowed greatly... the holidays tend to peak my interest in music again but might not be so true this year, not with a Wii under my tree :D

whatever
Dec 12, 2006, 11:59 AM
It was only a matter of time before society rejects DRM. My hunch, is that
illegal file sharing is on the rise. Brace yourself for the Ipod(MP3 player) tax.

DRM is here to stay. Expect it to get much tighter in the future. That's the way technology is going.

With HDMI being the defacto standard in all high end home audio/video equipment, bringing with it HDCP. It's only a matter of time.

And then as bandwith increases, so will online music and video streaming. Just think in the future all of your entertainment will be sitting on a fast server somewhere, safe and secure. When you're in a hotel room in Japan, all you have to do is plug the HDMI cable from your computer to the TV, login to iTunes and presto all of your content will be available to you on demand.

tutubibi
Dec 12, 2006, 11:59 AM
Ouch could be, looks like a good time to load up AAPL before MWSF '07. :D


Actually, I think it's good time to short AAPL ;)

At almost 40 P/E ratio (and no dividends :D), there are too much of "good stuff in the future" in the stock price already

EagerDragon
Dec 12, 2006, 12:01 PM
We don't have enogh detailed information. The study could be completly flawed for all I know. I like to see where he got the receipts from, what that place represents of the entire credit card industry, how he identified the proper transactions, etc. He also did not state if he conducted the same exact study a year ago using the same exact source and the same exact rules.

As for me I buy a few songs a year mainly when making a home movie and I want the right music for the scene. I prefer getting CD and ripping to iTunes for regular music. If anything happens to my computer or iPod, I still have the CD and can re-do the Rip. Besides the CD does not have DRM so as times changes if I want to move to non-iPod handhelds I do have the option.

Ogrewookie
Dec 12, 2006, 12:02 PM
This story is extremely misleading as this "drop" is not in market share, but rather a reflection of the fact that the media buying public will eventually hit a saturation point in which buyers will only purchase new music or the occasional blast from the past. That is why Apple continues to search for more services to offer with iTunes (movies, TV shows, music videos, the rumored iPhone coming out hopefully with iLife and .Mac integration, games for the iPod, a rumored gaming system, etc). I would be extremely surprised if the braintrust at Apple did not see this coming. It is a market correction, nothing more. All media offerers will see the same correction, and Apple will still have its same dominance I believe.

ziwi
Dec 12, 2006, 12:05 PM
I would think this is directly related to the sparse amount of quality music offerings - but if they do happen to exclusively get the Beatles catlogue that would help in the short term...

arn
Dec 12, 2006, 12:05 PM
Admin side note: we apparently have lost posts made in an original thread during a thread merger. not entirely clear what happened, but it does not appear that the other thread is recoverable at this time. sorry to those who's posts were lost. I'd ask you keep this thread on topic, and not respond to this note in this thread..

If you want to discuss this, you can reply to this thread:
http://forums.macrumors.com/showthread.php?p=3143635#post3143635 (http://forums.macrumors.com/showthread.php?p=3143635#post3143635)

asphalt-proof
Dec 12, 2006, 12:06 PM
(Puts on tinfoil hat)
The underlying message I got from the article was that "its not only CD sales that are suffering from piracy now, but online retailers are now starting to see the effects." Maybe this is going to be a harbinger of more articles showing that people are not buying music but using services like bittorrent et al. Then its a simple further step for the RIAA to say that iPods are just full of pirated materials and they should be recompensed for each one sold. (Actually they already are saying that aren't they, just now they have some 'evidence' to back it up). Its going to be interesting to see where this goes but I have a feeling we are going to see more articles like this.

whatever
Dec 12, 2006, 12:11 PM
Get rid of the DRM and I will start buying music/videos/movies from iTunes. Until then the recording industry and iTunes Store can take a hike. And it's not that I want to share my files illegaly. I just don't want to pay for something that needs to be "unlocked" in order to use (listen/watch) it.
I hate to play devils advocate here, but why!

We all know the way around the DRM, so what's the big deal.

Other products have similar forms of security, do you boycott them too?

The fact is this, if you don't like music with a DRM then buy it elsewhere. Of course we all know that it will cost more or may not be 100% legal (allofmp3.com).

For the average person, the DRM is not an issue. So why is it for you.

Peace
Dec 12, 2006, 12:16 PM
Since January 2006...

Didn't Apple have 3 conference calls since then?
None of them showed any drop in iTunes music sales.If there really IS a 65% drop since "Jan.2006" this drop must have taken place after August 2006 because sales were on a steady increase.

Sorry I don't believe this..

apb3
Dec 12, 2006, 12:17 PM
I hate to play devils advocate here, but why!

We all know the way around the DRM, so what's the big deal.

Other products have similar forms of security, do you boycott them too?

The fact is this, if you don't like music with a DRM then buy it elsewhere. Of course we all know that it will cost more or may not be 100% legal (allofmp3.com).

For the average person, the DRM is not an issue. So why is it for you.

whoa! someone agrees with me. I need to play the lottery today!

thestaton
Dec 12, 2006, 12:18 PM
I only use paypal and I buy quiet a bit.

princealfie
Dec 12, 2006, 12:18 PM
Actually the reason why Itunes revenue is declining is that people bought too many tracks and they all ran out of money to buy anymore! :eek:

princealfie
Dec 12, 2006, 12:20 PM
Examples of how iTunes destroys things include: http://www.gizmodo.com/gadgets/software/wedding-called-off-because-of-lack-of-piracy-skills-216389.php
http://www.ilounge.com/index.php/news/comments/wedding-called-off-over-8k-one-month-itunes-tab/9016
Perhaps Acquisition is coming back into style again?

seashellz2
Dec 12, 2006, 12:24 PM
what a GREAT time to roll out ZUMA...

macfan881
Dec 12, 2006, 12:26 PM
I bet all music consumption is down. IMO, there hasn't been anything worth buying in a long time. Frankley i beleive the quality of the current music is not worth my money now

exactly i thiknk ive purchesed like 4 albums this year to the 10 i purchased last year

shunpike
Dec 12, 2006, 12:27 PM
Get rid of the DRM and I will start buying music/videos/movies from iTunes. Until then the recording industry and iTunes Store can take a hike. And it's not that I want to share my files illegaly. I just don't want to pay for something that needs to be "unlocked" in order to use (listen/watch) it.

I hate to play devils advocate here, but why!

We all know the way around the DRM, so what's the big deal.

Other products have similar forms of security, do you boycott them too?

The fact is this, if you don't like music with a DRM then buy it elsewhere. Of course we all know that it will cost more or may not be 100% legal (allofmp3.com).

For the average person, the DRM is not an issue. So why is it for you.

Well said, the fact is DRM ISN'T an issue if u know what you are doing

BWhaler
Dec 12, 2006, 12:41 PM
I've bought thousands and thousands of songs from iTunes, and I have all but stopped. I may buy one or two songs now and then, at best.

I love the convenience, but the file quality is just no longer acceptible.

I am not an audiophile, far from it. I am not a music snob. I am just a regular guy who listens to music at home or when biking.

But that is the problem for Apple.

iTunes music was fine was it was being played through cheap ear buds.

But now that people like me are starting to play their digital music through their Bose car stereos and home stereos--such the iPod hifi--or even upgrading to decent headphones, Apple music just doesn't cut it any more.

For a buck or two more, I get DRM free music which I can put in any file format at any quality level for the rest of my life. For me, that's worth it.

It's like the movie store. For a buck or two more, I can get the whole DVD from Amazon. Sure, it take an hour to rip the DVD. But it's not like I sit around and wait for it. I kick it off and walk away...no big deal.

Apple needs to provide customers with an upgrade path to better quality. Charge a little bit for it--that's OK--but give me a way to get my current Apple music to decent quality. (Same goes for all of the video I have bought. Give me a path to quality)

I would start buying again if there was a way to buy high quality music and to upgrade my current collection without re-purchasing it for full price.

BrianMojo
Dec 12, 2006, 12:42 PM
Get rid of the DRM and I will start buying music/videos/movies from iTunes. Until then the recording industry and iTunes Store can take a hike. And it's not that I want to share my files illegaly. I just don't want to pay for something that needs to be "unlocked" in order to use (listen/watch) it.

So I take it you don't purchase DVDs because they need to be "unlocked" by DVD players' macrovision decoder?

Apple needs to provide customers with an upgrade path to better quality. Charge a little bit for it--that's OK--but give me a way to get my current Apple music to decent quality. (Same goes for all of the video I have bought. Give me a path to quality)

Good point. They say the free market has its ways of dictating things, and this may just be what is needed!

princealfie
Dec 12, 2006, 12:46 PM
So I take it you don't purchase DVDs because they need to be "unlocked" by DVD players' macrovision decoder?



Good point. They say the free market has its ways of dictating things, and this may just be what is needed!

Nope, the only DVDs I buy now are strictly Criterion Collection ones. Everything else suck mostly.

Passante
Dec 12, 2006, 12:49 PM
Examples of how iTunes destroys things include: http://www.gizmodo.com/gadgets/software/wedding-called-off-because-of-lack-of-piracy-skills-216389.php
http://www.ilounge.com/index.php/news/comments/wedding-called-off-over-8k-one-month-itunes-tab/9016
Perhaps Acquisition is coming back into style again?

I think it saved her :D

KindredMAC
Dec 12, 2006, 12:50 PM
I know the true reason why there has been a decline.....

There was no Pepsi/iTunes giveaway this past year.

I found that every year there was one, when I was done downloading my maximum I was in a groove and would keep downloading older songs and such. Now It takes a lot for me to actually think of a song that I want from yesteryear, see if it is on iTunes and then download it.

I agree with whoever said it on the first page though, there is a serious lack of good music out there right now.

shunpike
Dec 12, 2006, 12:51 PM
I've bought thousands and thousands of songs from iTunes, and I have all but stopped. I may buy one or two songs now and then, at best.

I love the convenience, but the file quality is just no longer acceptible.

I am not an audiophile, far from it. I am not a music snob. I am just a regular guy who listens to music at home or when biking.

But that is the problem for Apple.

iTunes music was fine was it was being played through cheap ear buds.

But now that people like me are starting to play their digital music through their Bose car stereos and home stereos--such the iPod hifi--or even upgrading to decent headphones, Apple music just doesn't cut it any more.

For a buck or two more, I get DRM free music which I can put in any file format at any quality level for the rest of my life. For me, that's worth it.

It's like the movie store. For a buck or two more, I can get the whole DVD from Amazon. Sure, it take an hour to rip the DVD. But it's not like I sit around and wait for it. I kick it off and walk away...no big deal.

Apple needs to provide customers with an upgrade path to better quality. Charge a little bit for it--that's OK--but give me a way to get my current Apple music to decent quality. (Same goes for all of the video I have bought. Give me a path to quality)

I agree - i normally buy CD's because I like to see them by my Hi-fi, but I must agree that it doesn't sound great on the Hi-fi, although it is fine for a bit - podcasts are the worst offenders.


However - have you really spent $1000's worth of Music off itunes?

shunpike
Dec 12, 2006, 12:51 PM
I know the true reason why there has been a decline.....

There was no Pepsi/iTunes giveaway this past year.

I found that every year there was one, when I was done downloading my maximum I was in a groove and would keep downloading older songs and such. Now It takes a lot for me to actually think of a song that I want from yesteryear, see if it is on iTunes and then download it.

I agree with whoever said it on the first page though, there is a serious lack of good music out there right now.

There was a massive coke/iTunes one in the UK

Kirkmedia
Dec 12, 2006, 12:53 PM
Not being a jerk - at least I hope not - but please explain why you think this is so. See my post above.

Aren't inddividuals entitled to protect their IP? (while allowing for reasonable fair use by conumers)

Forget about what is right or fair. The reality is people cheat and steal.

Illegal file sharing is growing, because it is easy to do and there is a coolness factor to it(and a thrill factor). Teenagers and students usually don't have a lot of money, so they look for free stuff and you can be sure most of them rarely pay for music out of their own pocket.

prograham
Dec 12, 2006, 12:53 PM
How utterly not shocking.

When ITMS first launched, I bought a good amount of music from it to show my support for buying music legally online - even though I didn't think the price at 99 cents a song was very good. I was hoping that if it caught on, which obviously it has, that the price would then drop and people would relax.

But sadly today seems even more hostile than ever concerning DRM and pricing. How sad that Apple has tried so hard to bring online media to the masses for a fair price by working with large media companies only to have them (not Apple) demand more money and more restrictions on the consumer.

I honestly believe that Steve would like the prices to be lower and can only hope that the restrictions looser (password protected on unlimited computers hmm?) but it's just not going to happen. It is so clear now that the music companies and movie companies will do all they can to stop entertainment media from entering a computer.

Interestingly enough, I was privvy to a friends pre-release copy of the "Deftones" new cd, which would not show up in my mac or pc for importing. Each track was digitally watermarked (or so said the paint on the cd face) so they could track the music if somehow I was able to rip it. I wonder how long before every store bought cd is this way?

If the media companies want to rip us off and play hardball, fine. Goodbye wallet and hello p2p.

TheAnswer
Dec 12, 2006, 12:55 PM
Actually the reason why Itunes revenue is declining is that people bought too many tracks and they all ran out of money to buy anymore! :eek:

Nope, the only DVDs I buy now are strictly Criterion Collection ones. Everything else suck mostly.

Scary...I stopped buy music from iTunes precisely because I needed more money for those Criterion Collection DVDs.

apb3
Dec 12, 2006, 12:56 PM
So I take it you don't purchase DVDs because they need to be "unlocked" by DVD players' macrovision decoder?


.... or use the pay software out there...

MacVault
Dec 12, 2006, 01:01 PM
I hate to play devils advocate here, but why!

We all know the way around the DRM, so what's the big deal.

Other products have similar forms of security, do you boycott them too?

The fact is this, if you don't like music with a DRM then buy it elsewhere. Of course we all know that it will cost more or may not be 100% legal (allofmp3.com).

For the average person, the DRM is not an issue. So why is it for you.

I guess I must not be the "average person"? If I pay for a song I want to have the ability to play it on whatever device I want, etc. without having to gain a third party's permission (ie: authorize my player as iTunes requires).

princealfie
Dec 12, 2006, 01:01 PM
Scary...I stopped buy music from iTunes precisely because I needed more money for those Criterion Collection DVDs.

Nice, why doesn't iTunes offer Criterion Collection movies? Get rid of those dumb TV shows.

apb3
Dec 12, 2006, 01:01 PM
Forget about what is right or fair. The reality is people cheat and steal.

Illegal file sharing is growing, because it is easy to do and there is a coolness factor to it(and a thrill factor). Teenagers and students usually don't have a lot of money, so they look for free stuff and you can be sure most of them rarely pay for music out of their own pocket.

But your main point was/is that society will/should somehow rise up and reject DRM.

Yes. people are cheap. People steal. How does that translate into some vast injustice socity needs to combat? It only reaffirms the need for fair and strong DRM schemes.

It only makes my main point - that people have the right to protect their IP - more important.

I guess I'm not getting your argument.

MacVault
Dec 12, 2006, 01:03 PM
Well said, the fact is DRM ISN'T an issue if u know what you are doing

HA! That's like saying the Patriot Act isn't an issue if you're not doing anything wrong.

BWhaler
Dec 12, 2006, 01:07 PM
However - have you really spent $1000's worth of Music off itunes?

I just checked out of curiosity:

7,506 Songs purchased from Apple
417 TV Shows/Movies/etc purchased from Apple
-----
8003 total items purchased from Apple.

So if you figure a bunch of the purchases were albums, it's still thousands of dollars.


For me, this calculation--thanks smart folders--just "sealed the deal" on my previous post about the quality of Apple's music.

I now have 7,500 songs which can only be reasonably played through "included ear buds." Anything better, whether in the home, in the car, through good computer speakers, or decent headphones, and Apple's music just doesn't cut it.

(And again, the important thing to note here is I am not an audiophile. Not a sound snob. Those people are never happy. But the fact that I am an average joe and I can tell it's poor quality is a big, big problem for Apple.)

I really hope Apple addresses this in a meaningful way. Charge me 5-10% of what I paid to upgrade the quality, I'll be back to being a regular customer. Otherwise, I think I am an Amazon.com music buyer from now on.

Rocketman
Dec 12, 2006, 01:11 PM
Once you get into the detail, this represents a decline from "fad growth" which was unsustainable last year. The reduction in transaction size is evidence the iTunes service is maturing. Leading edge buyers and fad buyers who "filled up" their iPods have now done that. The market will now transition to a "maintenance" mode where new iPod sales and existing iTunes sales will more closely track with newer buyers being less motivated and buying smaller amounts. What seems to be disregarded is the extremely wide availability and sell-through of iTunes gift cards this entire calendar year.

Rocketman

Westside guy
Dec 12, 2006, 01:19 PM
Well (and I'm pretty much repeating my Slashdot post from yesterday), when an album basically costs as much on ITMS as the CD does on Amazon, I really can't see the point in paying for a digital-only lower-quality version. I don't pirate music, I buy what I want; and the vast majority of my music purchases over the past three years have been in CD form. I do grab all the free ITMS songs though.

But given that ITMS (reportedly) doesn't turn a significant profit, and given that iPod sales are doing quite well - does Apple care that much? I'd think they would mainly care about overall market share.

Apple's DRM is pretty benign IMO, and doesn't enter into this equation at all for me.

dontmatter
Dec 12, 2006, 01:26 PM
Why? I highly doubt they're losing market share. Perhaps the novelty has worn off and people are going back to physical formats? I could see, in fact expect to see, a slowing of growth of the store. I would be surprised to see a cessation of growth. But shrinking? Really? It does make some sense, they have been trying to enter continually smaller markets to have room to grow into, with tv shows and movies, etc. Kinda like microsoft moving into cell phone OSes b/c they can't grow windows much by market share or by computers sold anymore.

I guess I'd buy that sales aren't so hot, but not actually shrinking.

anodyne
Dec 12, 2006, 01:33 PM
Could more people just be using pre-paid gift cards?

I know in my area that if you buy a gift card at Giant Eagle you get double the fuel perks, so a $50 gift card gets you .20 off a gallon of gas at the giant eagle gas station. you would be crazy not to buy prepaid itunes card if there was stuff u wanted on itunes. I know my entire family will be getting itunes gift cards from giant eagle this year from christmas, its a win win for everybody. I would like to know the amount of prepaid and gift card are being redeemed by itunes.

Kirkmedia
Dec 12, 2006, 01:35 PM
But your main point was/is that society will/should somehow rise up and reject DRM.

Yes. people are cheap. People steal. How does that translate into some vast injustice socity needs to combat? It only reaffirms the need for fair and strong DRM schemes.

It only makes my main point - that people have the right to protect their IP - more important.

I guess I'm not getting your argument.

You're right,I didn't argue my point effectively. The fact is people will revolt
against DRM on music downloads, because there are too many different music services with different DRMS that only play on certain players. People understand that DRMs ultimately will restrict them to one service or one device. People know more about the restrictions of DRM than they did a few years ago. People don't want to be tied down. When we used to buy record
albums, they played on all record players. When we buy CDs they play on
almost all CD players. DVD's will play on almost all DVD players.

Untill all downloaded music(not videos) use the same DRM and work on all MP3
players, people will resist buying them.

iEric
Dec 12, 2006, 01:36 PM
who cares if they're losing revenue. at least they're getting some. and more than other companies. so it's still all good.

i found that buying online is too convenient and i tend to buy more and then i look at my bill and I'm like holy shiza. that's why I've been not buying so much lately. maybe others are doing the same.

dontmatter
Dec 12, 2006, 01:37 PM
I bet all music consumption is down. IMO, there hasn't been anything worth buying in a long time. Frankley i beleive the quality of the current music is not worth my money now

Haven't people been bemoaning the declining quality of music, the complete lack of anything good since the good old days, since the beginning of music? I say if you haven't found anything worth buying recently, then you haven't really been looking recently. In this day and age more music is being made than ever before, and it's more accessible than ever before -- there's something out there for everybody, except for those who simply will not listen to it because they weren't listening to it 10 years ago.

I am not claiming you have to spend all the time required to find music you think is good, I'm just saying, it is out there, and tons of it. And this is not a personal attack, but just an observation, because every music related thread has a few of these comments. Maybe top 40 radio stations used to play good music and now they don't, but the top 40 is one salty drop in an ocean of music.

SnarkMan
Dec 12, 2006, 01:39 PM
There is a lot of confusion in both the original article and this forum about what the Forrester researcher did and did not say. I am a Forrester subscriber and I've read the report so let me try to clear it up.

Forrester maintains a panel of 7,000 consumers who willing provide information about their technology habits, including their credit card purchases. No one snooped through people's credit card data. These people willing gave their information for study, knowing it would be kept confidential.

Forrester looked at transactions by this panel from April 2004 to June 2006. During this time there were 2,791 iTunes purchases by the 7,000 consumers on their panel.

Forrester also looked at the data from the perspective of "households," not just individual users. There were 5,580 households that remained part of their panel continuously from July 2005 to June 2006. During that 12 month period, only 181 of those households made an iTunes purchase.

Right away you should realize this isn't a very deep population sample. Apple has sold more than 1.5 billion songs on iTunes and this study only looks at a total of 2,791 of those transactions, spread out over two years.

Everything that Forrester says in this research about iTunes is drawn from this sample. The big headline is that the number of transactions, per household in their panel, went from about 17 in January 2006 to about 7 in June 2006, while the average amount of dollars spent on each transaction went from about $7 to about $5.50. This amounts to a 65% drop in monthly revenue during that period.

This was the first drop in the data that Forrester saw, reversing a generally upward climb since June 2004.

Forrester themselves cautioned heavily against people drawing larger conclusions. In particular, the report does not suggest that "iTunes monthly revenue droped 65%." It says the monthly revenue dropped 65% among the people it's been watching as part of its consumer panel.

It may well be that people get an iPod, buy some songs (not too many) and then stop buying after a little while. But if more people keep buying iPods and then buying songs that may prop up the revenue from the store. Of course, long term, that still bad news for the iTunes store but it's different that what's been reported.

rockthecasbah
Dec 12, 2006, 01:41 PM
I don't know how many people are like me, but i buy all of my music from the iTMS with prepaid cards. I don't like the idea of having a credit card type purchase (besides the fact that i don't have one) because the ease of spending...With a balance limit right there I can better manage my funds (and yes i know i could use a limit with the credit card but the fact is that i still like prepaids :p )

I think this report is a little shady...

BoyBach
Dec 12, 2006, 01:44 PM
If this is true, and Apple wants a quick increase in sales, they could always sell some TV shows and movies in their other iTunes Stores (not just the US.)

;)

Unspeaked
Dec 12, 2006, 01:45 PM
So did anyone else notice the CNet article this afternoon about vinyl single sales surging since 2001...?

Hmmmm.

princealfie
Dec 12, 2006, 01:46 PM
Haven't people been bemoaning the declining quality of music, the complete lack of anything good since the good old days, since the beginning of music? I say if you haven't found anything worth buying recently, then you haven't really been looking recently. In this day and age more music is being made than ever before, and it's more accessible than ever before -- there's something out there for everybody, except for those who simply will not listen to it because they weren't listening to it 10 years ago.

I am not claiming you have to spend all the time required to find music you think is good, I'm just saying, it is out there, and tons of it. And this is not a personal attack, but just an observation, because every music related thread has a few of these comments. Maybe top 40 radio stations used to play good music and now they don't, but the top 40 is one salty drop in an ocean of music.

But if the only good pop album in 2006 was Christina Aguilera's album, then what does that mean for the record industry?

princealfie
Dec 12, 2006, 01:46 PM
HA! That's like saying the Patriot Act isn't an issue if you're not doing anything wrong.

Still, DRM is undermining iTunes and we all know this for a fact.

apb3
Dec 12, 2006, 01:50 PM
You're right,I didn't argue my point effectively. The fact is people will revolt
against DRM on music downloads, because there are too many different music services with different DRMS that only play on certain players. People understand that DRMs ultimately will restrict them to one service or one device. People know more about the restrictions of DRM than they did a few years ago. People don't want to be tied down. When we used to buy record
albums, they played on all record players. When we buy CDs they play on
almost all CD players. DVD's will play on almost all DVD players.

Untill all downloaded music(not videos) use the same DRM and work on all MP3
players, people will resist buying them.

OK. Talking past each other, I guess.

I see your point about competing DRM schemes, but still maintain that DRMs (especially Apple's benign flavor) are necessary. Would it change your argument if, say, Apple's DRM became the industry standard?

Also, like I said, at least with Apple DRM it is fairly simple to protect your personal use concerns. Can't speak for the others but my expeerience w/ Apple DRM makes me fall short of call to revolution.:)

apb3
Dec 12, 2006, 01:53 PM
Still, DRM is undermining iTunes and we all know this for a fact.

Huh? is that sarcastic? or are you serious?:confused:

MacVault
Dec 12, 2006, 01:58 PM
Huh? is that sarcastic? or are you serious?:confused:

Yea, it's true. I buy a song from iTunes only once in a blue moon - when I need the song RIGHT NOW. But for the majority of my music I buy it on CD and rip it to iTunes so I don't have to deal with DRM. If there was no DRM on iTunes I would buy all my music from iTunes. So yes, the DRM is undermining iTunes.

balamw
Dec 12, 2006, 01:59 PM
Still, DRM is undermining iTunes and we all know this for a fact.
Yes, but facts are all opinions.
All I can say is LOL. ;)

B

kainjow
Dec 12, 2006, 02:01 PM
Yea, it's true. I buy a song from iTunes only once in a blue moon - when I need the song RIGHT NOW. But for the majority of my music I buy it on CD and rip it to iTunes so I don't have to deal with DRM. If there was no DRM on iTunes I would buy all my music from iTunes. So yes, the DRM is undermining iTunes.

You can also burn your iTS music, and then rip it back into iTunes. DRM gone, 100% legal.

Also check out DRM Dumpster (http://www.burningthumb.com/drmdumpster.html)

princealfie
Dec 12, 2006, 02:02 PM
Yea, it's true. I buy a song from iTunes only once in a blue moon - when I need the song RIGHT NOW. But for the majority of my music I buy it on CD and rip it to iTunes so I don't have to deal with DRM. If there was no DRM on iTunes I would buy all my music from iTunes. So yes, the DRM is undermining iTunes.

In fact, emusic is kicking the butt off itunes.

apb3
Dec 12, 2006, 02:02 PM
Yea, it's true. I buy a song from iTunes only once in a blue moon - when I need the song RIGHT NOW. But for the majority of my music I buy it on CD and rip it to iTunes so I don't have to deal with DRM. If there was no DRM on iTunes I would buy all my music from iTunes. So yes, the DRM is undermining iTunes.

So buying a whole CD (instead of just the tracks you want - or do you enjoy all that fluff crap they add to each CD?:p ) and ripping it into iTunes is easier and more cost effective than buying only the songs you want from iTunes, burning it to cd and re-ripping to get rid of the DRM if you REALLY NEED to play it on your Zune or whatever???

That just seems silly to me for the FEW times that would be an issue.

slffl
Dec 12, 2006, 02:05 PM
" It may reflect a seasonal bounce that hasn't yet manifested itself. However, it might not"

Wow, that's some great analysis. I can do it to.

This might suck, then again it might rock.

Unspeaked
Dec 12, 2006, 02:06 PM
You can also burn your iTS music, and then rip it back into iTunes. DRM gone, 100% legal.[/url]

Yes, because it makes a lot of sense for me to A) spend $9.99 on an album via iTunes - which is lower quality than a commercial CD - spend more money on a blank disc plus waste my time burning it and ripping it back than to B) buy the disc I want at BestBuy on sale for $8.99 and already have what I was looking for to begin with, with the option of converting it to any format I'd like at any quality I'd like in the future (not to mention some nice artwork, liner notes, etc).

I don't know, option B) sounds a little nicer to me...

iMeowbot
Dec 12, 2006, 02:07 PM
Forrester themselves cautioned heavily against people drawing larger conclusions. In particular, the report does not suggest that "iTunes monthly revenue droped 65%." It says the monthly revenue dropped 65% among the people it's been watching as part of its consumer panel.
Okay, so Orlowski essentially did make up his conclusion all by himself. Figured as much :)
It may well be that people get an iPod, buy some songs (not too many) and then stop buying after a little while. But if more people keep buying iPods and then buying songs that may prop up the revenue from the store. Of course, long term, that still bad news for the iTunes store but it's different that what's been reported.
The store's volume won't much either way to Apple, so long has the hardware keeps moving. The bigger trend of reduced music sales (in all forms) could be a worry for them, if there is actually less interest in new recorded music out there. The fancier models with more capacity (and a beefier markup) will be that much harder to push if collections aren't growing so fast.

balamw
Dec 12, 2006, 02:11 PM
I don't know, option B) sounds a little nicer to me...
The economics are a bit different whan you consider that you can buy a song on iTMS for $0.99 vs. the $8.99 at a B&M store (FWIW, I haven't even been seeing too many $9.99 loss leaders at Best Buy recently, most are $10.99-$11.99 these past few months...). True you may get 10 more songs, but you're at least $8 poorer.

For me the equation also include BMG's yourmusic.com. Can I wait a few months to get this CD. Yes, then get the CD for $5.99 at YM, (soon to be $6.99 in 2007). This complicates things. If I think I might by 3 or more tracks from an album at iTMS, but can wait. I'll get the whole thing at YM.

B

donlphi
Dec 12, 2006, 02:12 PM
I bet all music consumption is down. IMO, there hasn't been anything worth buying in a long time. Frankley i beleive the quality of the current music is not worth my money now

agreed... :(

EricNau
Dec 12, 2006, 02:14 PM
I really suspect that there is going to be a great push this year to demonstrate the need for Media Players to have and pay a sold called "Piracy Tax" upfront on each player sold.

Microsoft has led the way with a paltry $1 per Zune sold to be given to Universal. Now the studios are going to drum up any research they can to show the need to collect their royalties upfront.

It's going to be interesting. Will Apple cave and add $20.00 to every iPod in this naked money grab by the studios?
Apple could easily argue that the fault lies with our government - that our government agencies are not taking the necessary actions against pirates.

Which sounds better?...

"We need to take a better stand against criminals" or "we should take money from innocent people to compensate for the criminal's actions?"

Unspeaked
Dec 12, 2006, 02:14 PM
The economics are a bit different whan you consider that you can buy a song on iTMS for $0.99 vs. the $8.99 at a B&M store (FWIW, I haven't even been seeing too many $9.99 loss leaders at Best Buy recently, most are $10.99-$11.99 these past few months...). True you may get 10 more songs, but you're at least $8 poorer.

I see your side of this, but as someone who primarily buys albums, iTunes has never made sense to me.

Even CD singles can be had for $2 or $3, living in a metro area with a wealth of music retailers. Heck, Tower Records has their CD singles priced at 75 cents during their current liquidation sale!

fixyourthinking
Dec 12, 2006, 02:27 PM
If this were true ... then Apple would have no reason to lock the iPod in to the iTunes store from this point on. IE ... it would be better to sell more iPods than deal with the hassle of negotiating with the record companies, encoding the songs into AAC, and making iTunes Songs only playable on an iPod.

Therefore ... this can't be true.

brad.c
Dec 12, 2006, 02:42 PM
When iTunes was first released, everything was new. After the first few months, people had gotten the available songs they wanted. Now, those customers simply wait for new songs they want to be released.

The inital surge and the subsequent drop should have been expected.

I agree, as it applies to the 25+ demographic (like me). I'm only an occasional purchaser off iTunes, but I'm still enjoying the payoff from ripping my CD collection and putting them into storage. But wouldn't it be significant regarding the under 25's who buy the most music on a regular basis?

macfan881
Dec 12, 2006, 02:50 PM
also i wonder to if its the new Tax deal there trying to put on itunes Ijust moved out of nj during the sumer and in sempter i rember reading that the pased a new tax bill and now ur having charged tax on itunes songs as well

Kirkmedia
Dec 12, 2006, 02:52 PM
OK. Talking past each other, I guess.

I see your point about competing DRM schemes, but still maintain that DRMs (especially Apple's benign flavor) are necessary. Would it change your argument if, say, Apple's DRM became the industry standard?

Also, like I said, at least with Apple DRM it is fairly simple to protect your personal use concerns. Can't speak for the others but my expeerience w/ Apple DRM makes me fall short of call to revolution.:)

Yes, an industry standard, will increase paid music downloads.

mahonmeister
Dec 12, 2006, 02:53 PM
I've only bought one song from the iTunes Store. If they sold lossless quality and allowed you to download and print all the art that comes with regular CDs then I'd buy all my music from iTunes. Otherwise I don't plan on buying any more music through them.

So this downward trend doesn't surprise me.

twoodcc
Dec 12, 2006, 03:03 PM
wow. i really believe that the store is probably doing just fine, like Apple said (or at least i sure hope so)

aserg
Dec 12, 2006, 03:05 PM
Maybe everyone started buying from AllOfMp3.com, I know I have! And I believe they wouldn't show sales from them.
AllOfMp3>iTunes :)

gwangung
Dec 12, 2006, 03:05 PM
Right away you should realize this isn't a very deep population sample.

Right now, folks should realize you don't know that much about statistics.

*sigh*

Unspeaked
Dec 12, 2006, 03:06 PM
Maybe everyone started buying from AllOfMp3.com, I know I have! And I believe they wouldn't show sales from them.
AllOfMp3>iTunes :)


allofmp3.com is fine if you don't mind a little polonium mixed in with your downloads...

:rolleyes:

balamw
Dec 12, 2006, 03:07 PM
allofmp3.com is fine if you don't mind a little polonium mixed in with your downloads...
Doesn't matter now. AllofMP3 is dead, dead, deadski.

http://news.com.com/Russia+agrees+to+shut+down+Allofmp3.com/2100-1027_3-6139350.html

B

Westside guy
Dec 12, 2006, 03:13 PM
Still, DRM is undermining iTunes and we all know this for a fact.

In fact, emusic is kicking the butt off itunes.

You keep using that word - I do not think that word means what you think it means...

PCMA
Dec 12, 2006, 03:17 PM
iTunes passed the 1 billion downloaded songs mark in February.

We were also led to believe that Apple were selling songs at a rate of >1billion per year - and that sales were accelerating.

So where is the celebration (or media release) to mark the download of the 2 billionth song from iTunes. :)

aserg
Dec 12, 2006, 03:18 PM
Doesn't matter now. AllofMP3 is dead, dead, deadski.

http://news.com.com/Russia+agrees+to+shut+down+Allofmp3.com/2100-1027_3-6139350.html

B

I heard it the act will be effective in June 2007, so there's a long way to go.
AoF probably has something up their sleeves. If they do get closed down, they could always open up under a different name, nothing USA can do about it.

puuukeey
Dec 12, 2006, 03:34 PM
If the mp3 sales go up Apple does well
if the mp3 sales go down. SCREW RECORD COMPANIES.

AvSRoCkCO1067
Dec 12, 2006, 03:40 PM
If the mp3 sales go up Apple does well
if the mp3 sales go down. SCREW RECORD COMPANIES.

well said :)

theBB
Dec 12, 2006, 03:50 PM
Check out emusic.com they sell digital tracks of better quality than iTunes for $0.25 each.
Not anymore, they have increased their price by 30%, now it is 33c per song.


This seems to be typical disinformation, damn lies and statistics. What seems to be down 65% is the rate of increase of sales not the sales themselves.
I read the article, but I don't see that. I am probably missing it, could point to that piece of info?

Since January 2006...

Didn't Apple have 3 conference calls since then?
None of them showed any drop in iTunes music sales.If there really IS a 65% drop since "Jan.2006" this drop must have taken place after August 2006 because sales were on a steady increase.

Sorry I don't believe this..
Agreed. Neither do I.

wordmunger
Dec 12, 2006, 03:52 PM
I think the key problem with this research is that it's self-reported. Two years ago, I probably remembered every iTunes purchase I made, because of the novelty of it. Now I have to kick myself to remember the purchases when the credit card bill comes in. I seriously doubt revenues are down 65 percent at Apple -- after all, they're getting new potential iTunes every day, with every iPod sale.

balamw
Dec 12, 2006, 03:52 PM
I read the article, but I don't see that. I am probably missing it, could point to that piece of info?
I was paraphrasing from lost posts in the earlier thread.

EDIT: A good link below http://forums.macrumors.com/showpost.php?p=3144614&postcount=133

B

BWhaler
Dec 12, 2006, 03:56 PM
Well (and I'm pretty much repeating my Slashdot post from yesterday), when an album basically costs as much on ITMS as the CD does on Amazon, I really can't see the point in paying for a digital-only lower-quality version. I don't pirate music, I buy what I want; and the vast majority of my music purchases over the past three years have been in CD form. I do grab all the free ITMS songs though.

But given that ITMS (reportedly) doesn't turn a significant profit, and given that iPod sales are doing quite well - does Apple care that much? I'd think they would mainly care about overall market share.

Apple's DRM is pretty benign IMO, and doesn't enter into this equation at all for me.

I agree with the first and last points.

The price of albums and DVD's are so close to Amazon at this point--and Apple's album prices has been creeping up--that it makes zero sense to buy from the Apple store.

Buying one-off songs or TV shows now and then seems to be the buying behavior people are gravitating towards. Entire movies or albums doesn't seem to have an economic argument anymore.

I also agree with the Apple DRM comment. I don't mind it since it doesn't get in my way and I know I can break it if need be. (Something I won't do until the moment I am prohibited from doing something with my music I believe I legally should be able to do.)

Finally, I think Apple does care about the music being sold through the store. It makes for a huge switching cost and barrier to exit from the iPod product line.

jmbear
Dec 12, 2006, 03:57 PM
When iTunes was first released, everything was new. After the first few months, people had gotten the available songs they wanted. Now, those customers simply wait for new songs they want to be released.

The inital surge and the subsequent drop should have been expected.

I was thinking that too; however, its not like people have a wish-list of all the songs they want and buy them once they get a chance, and then only buy new releases. You continue discovering new music, even if it isn't a new release.

There could be many explanations for this, a simple substitution effect from digital music to CDs because you can gift-wrap a CD (holiday season), the same can't be done with digital downloads.

In the end, we should not even care about this lol, since Apple makes money on iPods not on iTMS. Give us more iPhone rumors!

whatever
Dec 12, 2006, 04:07 PM
I guess I must not be the "average person"? If I pay for a song I want to have the ability to play it on whatever device I want, etc. without having to gain a third party's permission (ie: authorize my player as iTunes requires).

What are you talking about. The iTunes Music Store is designed to operated currently on two devices. Personals computers and iPods. For a song to play on a personal computer you need to have iTunes, for it to play on an iPod, well you need an iPod.

However, you don't have a car adapter and wish to play it on a CD player you can rip a CD.

Your argument doesn't make sense to me. It's like someone complaining that they can't play their Xbox 360 games on WII. Which is a competing device.

cloudnine
Dec 12, 2006, 04:07 PM
That's exactly what worries me too. :mad:

Are you guys serious? I don't think they meant Visa and Mastercard are selling reports stating who's buying iTunes music... I think they meant a study based on the sales from iTunes, which as far as I know are only available via credit card or gift card purchase. You can't walk up to the iTMS with cash or check in hand...

o_O

gauriemma
Dec 12, 2006, 04:09 PM
The report is surprising in that Apple has routinely given the impression that the iTunes store has been doing well. During Apple's 3rd Q 2006 conference call, Apple estimated that it had 85% of the legal download market (http://www.macrumors.com/pages/2006/07/20060719164004.shtml).

Not so surprising, really. If the market for downloadable music has dropped across the board, Apple can still have 85% of it. It just has 85% of a smaller pie.

gauriemma
Dec 12, 2006, 04:12 PM
I see your side of this, but as someone who primarily buys albums, iTunes has never made sense to me.

Even CD singles can be had for $2 or $3, living in a metro area with a wealth of music retailers. Heck, Tower Records has their CD singles priced at 75 cents during their current liquidation sale!


Yeah, and right now, all remaining stock is 70% off. Just picked up 5 CDs for around $20. But Tower's not going to be around after next Tuesday...

gauriemma
Dec 12, 2006, 04:15 PM
But if the only good pop album in 2006 was Christina Aguilera's album, then what does that mean for the record industry?

Frankly, if that's your stance, I'm more worried about what it means for you...

apb3
Dec 12, 2006, 04:16 PM
Are you guys serious? I don't think they meant Visa and Mastercard are selling reports stating who's buying iTunes music... I think they meant a study based on the sales from iTunes, which as far as I know are only available via credit card or gift card purchase. You can't walk up to the iTMS with cash or check in hand...

o_O

No the data was not from the CC companies. It was from a SMALL non-random sample of people who opted-in to share theie credit card purchases.

It would be a breach of their privacy policy (and INCREDIBLY bad PR at least) for a cc company to do something like that even if they submitted the info "annonymously."

Hugs and Kisses!!

apb3
Dec 12, 2006, 04:20 PM
Frankly, if that's your stance, I'm more worried about what it means for you...

And I'm worried about what my purchases of Fergie (and a gift purchase of it for my cousin as well) and Paris Hilton say about my warped mind. Granted they were semi-jokes but I find myself listening to them WAY to much. I try to blame it on my sons but I got a weird look from my wife when I fired up Front Row on the living room TV just to hear Fergilicious while waiting for Sleeper Cell to start. My sons were already asleep so I could think of no excuse...

Must've been a psychological side effect of all those shots and pills they gave us before deploying.:eek:

wildmannz
Dec 12, 2006, 04:36 PM
Analysis from another person shows more sense:
http://biz.yahoo.com/seekingalpha/061212/22282_id.html?.v=1

Again - declining growth is not EXACTLY the same as declining sales.

Nice dip in the share price though. I just bought some!

wmmk
Dec 12, 2006, 04:36 PM
The report is based off of an analysis of credit card transactions over a 27 month period.

Well, a lot of iTS users are young people who, myself included, don't have credit cards and buy iTunes prepaid cards in brick and mortar establishments. This, IMHO, is a biased study.

NewSc2
Dec 12, 2006, 04:37 PM
And I'm worried about what my purchases of Fergie (and a gift purchase of it for my cousin as well) and Paris Hilton say about my warped mind. Granted they were semi-jokes but I find myself listening to them WAY to much. I try to blame it on my sons but I got a weird look from my wife when I fired up Front Row on the living room TV just to hear Fergilicious while waiting for Sleeper Cell to start. My sons were already asleep so I could think of no excuse...

Must've been a psychological side effect of all those shots and pills they gave us before deploying.:eek:

Don't be too worried -- even though Fergie, Christina, Paris, etc. aren't "musicians" per se, they have excellent producers behind their backs.

Music nowadays is all about hiring 40-50 year old music professionals, and slapping a cute face on top. It kind of bastardizes the whole concept, but these producers are really really good musicians.

I met Christina Aguilera's producer and he's produced Quincy Jones and listens to all sorts of music -- jazz, techno, etc.

These people understand the concept of pop music through and through, and make cookie-cutter, catchy songs (that go through the bastard record companies, but still...)

And anyway, I agree with the people who say they first downloaded a lot of music to digitize their collection, and now they're pretty much through with it all, and might purchase around 5 albums a year. Frankly I've never bought on iTunes -- I usually buy CD's off amazon.

iMeowbot
Dec 12, 2006, 04:47 PM
Not so surprising, really. If the market for downloadable music has dropped across the board,
But this is exactly the problem with the Forrester observation, the download market grew by 75% in the past year. That's half the growth rate of last year, and that itself is something to be concerned about for such a young market, but it's still growth.

schnico
Dec 12, 2006, 04:49 PM
I'm stunned to think anyone could believe a 65% drop in monthly revenue for iTS is even a remote possibility. If that were the case, do you think we would be hearing it from Forrester? Record companies would be jumping ship, or at the very least complaining very loudly in the media. Such a drop would be a huge trend away the success of the iPod.

I do believe that the iTunes purchases of 5580 specific households MIGHT drop 65% from one year to the next. It is conceivable that folks might buy a lot of iTunes songs early on for their iPod and slow down their purchases later. I am skeptical, but really, if these 7000 folks have had iPods for at least 27 months - maybe individual users tend slow down their iTunes purchases over time as they build out their libraries.

However, even if people slow down their song purchases after a couple years, there are many, many more iPods being sold now than there were 2 years ago. So it is still highly likely that sales at iTS are increasing, though I agree we don't know those specific numbers. And neither does Forrester (though they are not claiming to know).

And for those who are jumping to the conclusion that the cause of the supposed decline in iTS sales is derived from DRM, that is just as silly as believing iTS monthly revenue has declined 65%. DRM has been there from the beginning. What event happened in relation to DRM in 2006 that could have caused millions of people to change their minds about buying songs from iTS?

Gasu E.
Dec 12, 2006, 04:49 PM
There is a lot of confusion in both the original article and this forum about what the Forrester researcher did and did not say. I am a Forrester subscriber and I've read the report so let me try to clear it up.

Forrester maintains a panel of 7,000 consumers who willing provide information about their technology habits, including their credit card purchases. No one snooped through people's credit card data. These people willing gave their information for study, knowing it would be kept confidential.

Forrester looked at transactions by this panel from April 2004 to June 2006. During this time there were 2,791 iTunes purchases by the 7,000 consumers on their panel.

Forrester also looked at the data from the perspective of "households," not just individual users. There were 5,580 households that remained part of their panel continuously from July 2005 to June 2006. During that 12 month period, only 181 of those households made an iTunes purchase.

Right away you should realize this isn't a very deep population sample. Apple has sold more than 1.5 billion songs on iTunes and this study only looks at a total of 2,791 of those transactions, spread out over two years.

Everything that Forrester says in this research about iTunes is drawn from this sample. The big headline is that the number of transactions, per household in their panel, went from about 17 in January 2006 to about 7 in June 2006, while the average amount of dollars spent on each transaction went from about $7 to about $5.50. This amounts to a 65% drop in monthly revenue during that period.

This was the first drop in the data that Forrester saw, reversing a generally upward climb since June 2004.

Forrester themselves cautioned heavily against people drawing larger conclusions. In particular, the report does not suggest that "iTunes monthly revenue droped 65%." It says the monthly revenue dropped 65% among the people it's been watching as part of its consumer panel.

It may well be that people get an iPod, buy some songs (not too many) and then stop buying after a little while. But if more people keep buying iPods and then buying songs that may prop up the revenue from the store. Of course, long term, that still bad news for the iTunes store but it's different that what's been reported.

Thank you for sharing that.

Based on what you are describing, the Forrester report says even less than you conclude. The number of transactions per household in a given month only apply to households that made a purchase during that month (otherwise the numbers would be ridiculous). It says 181 households made a transaction over 12 months, but it does not say when the made them. It is possible, for example, that only 1 household made purchases in the first month and all 181 made purchases in the last month. Forrester is not implying that revenues are down, even in their small sample. It is only saying that the average revenues per month for customers who made a purchase in that month are down.

bigfoot
Dec 12, 2006, 04:53 PM
My daughter's 1st ipod was replaced once, fixed a second time now DOA. Her second is now DOA. She's an adult who takes good care of things. She has stopped paying for itune songs. She refuses to buy another ipod. I rarely download songs to burn audio discs. I think the honeymoon is winding down as is the novelty.

ChrisA
Dec 12, 2006, 05:01 PM
It's going to be interesting. Will Apple cave and add $20.00 to every iPod in this naked money grab by the studios?

I hope they do AND I hope Apple states that included with each iPod is a paid up license to "steal music". Although if you just paid the studios $20 it is no longer "stealing" because you just paid.

The studios need to think twice before asking for compensation. Once you start taking money people think it is in exchange for some product or service.

theBB
Dec 12, 2006, 05:08 PM
Analysis from another person shows more sense:
http://biz.yahoo.com/seekingalpha/061212/22282_id.html?.v=1

That guy cannot do any math, either. He is plotting cumulative sales of songs and claims that iTunes sales are growing dramatically. Well, cumulative sales would never show you a drop in sales. If Apple sells one more song next year, the cumulative sales would show an increase, even though sales per year would be horribly down from last year.


Again - declining growth is not EXACTLY the same as declining sales.

Yes, that's true, but Forrester's sample of consumer spending does show a decline in sales per month. It is NOT a case of confusing declining growth with declining sales. The only question is whether their sample of a few thousand consumers represent behavior of the millions of consumers around the world accurately.

ChrisA
Dec 12, 2006, 05:10 PM
Possibly the market is getting more educated. At first they bought iTumes downloads, now they find (1) they don't like 128kbps quality and (2) they figured out how to rip their CDs. or (3) they've figured out how to use the other on-line services that charge les than Apple.

Digitalclips
Dec 12, 2006, 05:15 PM
When iTunes was first released, everything was new. After the first few months, people had gotten the available songs they wanted. Now, those customers simply wait for new songs they want to be released.

The inital surge and the subsequent drop should have been expected.

I agree 100%. Plus iPods are not only bought by those wanting to buy music on iTunes, we have several in the family and 99% of content is from our CD and even LP collections plus a few ibooks. If we are not unique there might not be any direct connection to iPod sales and iTunes sales and we all know Apple make the big $s on iPods and Macs.

torv
Dec 12, 2006, 05:16 PM
Frankly, those numbers seem logical if only anecdotally.

The article seems to imply that it has something to do with the iTunes Music Store or music downloads in general which I believe is incorrect. The article is missing the obvious point: for the most part the music being produced today SUCKS!!! There is no breakout hit artist on the market at all. I remember a couple of years ago when Coldplay went back to the drawing board with what was to become X&Y because the band wasn't happy with the record. BMI's stock plummeted on that announcement because they didn't have a hit band's record for another 6 months.

It's so simple -- no hit bands = lousy music sales, on-line or otherwise.

recordprod
Dec 12, 2006, 05:31 PM
Maybe Apple should offer at least CD quality encodes? I'd not buy any of the low quality stuff currently on offer.

Sabenth
Dec 12, 2006, 05:56 PM
Frankly, those numbers seem logical if only anecdotally.

The article seems to imply that it has something to do with the iTunes Music Store or music downloads in general which I believe is incorrect. The article is missing the obvious point: for the most part the music being produced today SUCKS!!! There is no breakout hit artist on the market at all. I remember a couple of years ago when Coldplay went back to the drawing board with what was to become X&Y because the band wasn't happy with the record. BMI's stock plummeted on that announcement because they didn't have a hit band's record for another 6 months.

It's so simple -- no hit bands = lousy music sales, on-line or otherwise.

bang to rights got it in one there isnt anything worth really getting unless you dig really deep and lets face it not many people do they go with the top 10/40 and as for the credit card stuff to be expected without a doubt

JSchwage
Dec 12, 2006, 06:00 PM
I stopped buying songs on iTunes after I bought about 35 songs. I just can't deal with the DRM restrictions anymore. I want to be able to do what I want with my music, and I'd rather have a higher bitrate than 128kbps anyway.

schatten
Dec 12, 2006, 06:19 PM
Isn't this the first year without the Pepsi free iTunes givaway? I wonder if that had much bearing. I know that the Pepsi givaway always prompted me to not only buy more pepsi but more iTunes music as well!

Object-X
Dec 12, 2006, 06:20 PM
I'm experiancing a little Deja Vu. Wasn't there a story just like this last year about this time? iTunes sales are plummeting and then when the holiday season was over, Apple announced their numbers, and they were off the chart. My prediction is more of the same.

phytonix
Dec 12, 2006, 06:30 PM
Check out emusic.com they sell digital tracks of better quality than iTunes for $0.25 each.

emusic sells MP3 format, bitrate higher but not necessarily better quality, esp when there are some 168kps VBR on emusic.
No DMR is the advantage of emusic.

reykjavik
Dec 12, 2006, 06:36 PM
I actually would assume this would happen. As oppose to all other retail during the shopping season, Im not surprised to see revenue go down for intangible property because its not something you can really give to someone. And after someone has spent all their extra money on gifts for others, they have little left over for music for themselves. Seems logical...

peterjhill
Dec 12, 2006, 06:40 PM
This is the register.. I get their RSS feed and it seems to me that it is a pretty sensational article.. They knew they would get lots of mention for it.. I have seen it posted on digg and /.

All I know is that my wife just spend $85 on Christmas Music and I have bought about 135 items in the past three months.. Apple is still selling a ton of iPods, and that is where Apple is making the money. I think the music store is doing better than breaking even. If Apple is still making more money year over year and beating the streets revenue expectations.. I don't see the problem.

Looking at http://tools.thestreet.com/tsc/quotes.html?symb=AAPL&pg=analyst

They dont see any problems... Nothing like an Apple story to drive page views though.

Chupa Chupa
Dec 12, 2006, 07:02 PM
Possibly the market is getting more educated. At first they bought iTumes downloads, now they find (1) they don't like 128kbps quality and (2) they figured out how to rip their CDs. or (3) they've figured out how to use the other on-line services that charge les than Apple.

I doubt most people understand the relationship between bitrate and sound quality. But people have had time to have a run in with DRM. Having to de-authorize songs when you sell your old machine is easy enough...but who remembers. Heck half the time I zero out my drive and THEN remember. Too late. Maybe it's a little more work to go to the store and buy a CD, but it's a lot easier in the end.

Meanwhile, it looks like iPod sales are still increasing. Apple makes very little money from iTMS. I think this is more a message to the RIAA, MPAA, etc than Apple.

Kenn Marks
Dec 12, 2006, 07:11 PM
Seconded - there's no way 65% of iTunes purchases are being made via gift cards.

Would you give your kids access to your credit card info or an unlimited account at the iTunes store, I hope not. Gift cards from the local Apple Specialist is how I gift friends and family (No tracability there). The Nielson Soundscan chart I saw only looks as if there there was a 15% decline in music sales in 3rd Qtr 2006 from the January Qtr 2006 high.

anothergene
Dec 12, 2006, 07:34 PM
That's exactly what worries me too. :mad:

Seriously. This surpises you? I bet they know difference in mass between what you eat and ****.

Teddy's
Dec 12, 2006, 08:32 PM
Well, there is nothing interesting to buy. I have bought many songs that I can't find anything good ... either past or new.

So the record industry is not looking good now at least for me.

zzzz

SeaFox
Dec 12, 2006, 10:29 PM
If Apple is only making pennies on this anyway, who cares? It's not like people aren't buying music anymore. It is still being purchased, ripped and played on an mp3 player. For as long as the iPod is the player of choice, Apple should be sufficiently pleased.
Exactly. People sometimes forget that the iTMS exists to sell iPods. It may create some revenue in the process, but it is not a major source of revenue for Apple - the iPod is.

I bet all music consumption is down. IMO, there hasn't been anything worth buying in a long time. Frankley i beleive the quality of the current music is not worth my money now
Which is actually part of the reason the iTMS has been such a success so far. Music quality has been down for about 10 years, with only to three to five tracks on the average album really being all that outstanding, so buying singles and skipping the whole album makes good financial sense.

JFC, MacRumors and Appleinsider have been wearing out the question mark key in their latest headlines.

iTunes Store Seeing Revenue Crunch?
Aqua To See Leopard Refresh?
iPhone not at Macworld Expo San Francisco 2007?
Public Beta of Adobe Creative Suite 3?
Three New iPod Models in 2007?
16GB Flash-based iPod Video Player?

Please find alternative ways to write a headline.
This is actually considered poor journalism, too. Take an inflammatory/unproven statement, then add a question mark at the end and it becomes an interrogative rather than a statement. The premise is you're now posing it as a question, but it still reads like a suggestion and FUD.

But then, when the entire publication is based on rumors, its kinda hard to always make truthful statements in headlines.

I only use paypal and I buy quiet a bit.
So are you saying you don't buy much (so you have a lot of quiet in your life), or you're a fan of those tracks on the store that are recorded silence? I couldn't let that typo go. :D

HA! That's like saying the Patriot Act isn't an issue if you're not doing anything wrong.
No, it's a suggestion that DRM is not an issue with things like Hymn, downloading the music illegally, burning and re-ripping, ect

"DRM is not an issue if you're buying music legally." is a sentence that fits your comparison.

Analysis from another person shows more sense:
http://biz.yahoo.com/seekingalpha/061212/22282_id.html?.v=1

Again - declining growth is not EXACTLY the same as declining sales.

Nice dip in the share price though. I just bought some!
Declining growth might as well mean declining sales in todays business world. And I think that's a real issue. If you're not constantly growing you're doing something wrong is the attitude taken by Wall Street today, the result is the list of "successful" companies only includes the top three in an industry now.

Remember when a business was considered a success simply by making a modest profit? What happened to that. World domination isn't the end-all/be-all.

emusic sells MP3 format, bitrate higher but not necessarily better quality, esp when there are some 168kps VBR on emusic.
No DMR is the advantage of emusic.
I'm an emusic subscriber and I have to say that generally the music is higher quality. Most tracks are 180-220 VBR. yeah, there are the occasional stick in the mud group that will only put out 128kbps, but I've only had that happen a couple times, and emusic marks albums encoded this way.

I also suspect that iTunes "colors" some tracks audio-wise. I have a single I got from iTunes that sounds "better" than a 192kbs MP3 version I downloaded online. Now I can't verify what encoder settings that user had when he ripped the album, but there was significantly sharper treble and deeper bass in the iTunes version.

geerlingguy
Dec 12, 2006, 11:26 PM
does this include Debit card purchases? cause I have my iTunes setup with my debit card

...and I have mine set up through PayPal, which goes through my bank account...

I switched from using my credit card to PayPal to consolidate my bill paying. But I don't think 65% of Apple's users did.

0010101
Dec 13, 2006, 12:38 AM
It's not surprising that online music sales in general will eventually taper off.

Think about the natural progression of the first time MP3 player buyer.. they run out and the first thing they do is load it up full of all the music they want.

Once it's loaded up, then the only time you bother buying music is when something in particular interests you.. which certainly isn't something that happens every day, or even once a week.

So now since most of the people interested in having an MP3 player has one, and most of them are finally getting all their old favorites loaded into their players, they won't be buying as much.

Zab the Fab
Dec 13, 2006, 06:05 AM
wow, I just read this, I find it quite surprising, if not shocking.

I just can't make sense of the figure: is it that in general music sales have dropped so dramatically or is it that people are buying elsewhere ?

Any comments ?

THE REPORT IS DELIBERATE DISINFORMATION

http://www.blackfriarsinc.com/blog/2006/12/do-math-itunes-sales-arent-collapsing.html

PLEASE START THE WAVE OF ARTICLES EXPOSING THIS LAME ATTEMPT TO DISCREDIT THE iTUNES STORE !!!! SPREAD THE WORD !

Cinematographer
Dec 13, 2006, 07:37 AM
Forrester looked at transactions by this panel from April 2004 to June 2006. During this time there were 2,791 iTunes purchases by the 7,000 consumers on their panel.

[] During that 12 month period, only 181 of those households made an iTunes purchase.

Right away you should realize this isn't a very deep population sample. Apple has sold more than 1.5 billion songs on iTunes and this study only looks at a total of 2,791 of those transactions, spread out over two years.

Everything that Forrester says in this research about iTunes is drawn from this sample. The big headline is that the number of transactions, per household in their panel, went from about 17 in January 2006 to about 7 in June 2006, while the average amount of dollars spent on each transaction went from about $7 to about $5.50. This amounts to a 65% drop in monthly revenue during that period.

[] Forrester themselves cautioned heavily against people drawing larger conclusions.

Thank you very much for this information.

It puts the whole story into perspective.

kresh
Dec 13, 2006, 08:39 AM
My daughter's 1st ipod was replaced once, fixed a second time now DOA. Her second is now DOA. She's an adult who takes good care of things. She has stopped paying for itune songs. She refuses to buy another ipod. I rarely download songs to burn audio discs. I think the honeymoon is winding down as is the novelty.

My household has 7 iPods and never has had a failure. Your daughter has had three failures.

hmmm..... Tell her to stop driving nails with it, it's not a hammer :)

It's plainly obvious it's something she's doing to the device.

princealfie
Dec 13, 2006, 09:10 AM
Don't be too worried -- even though Fergie, Christina, Paris, etc. aren't "musicians" per se, they have excellent producers behind their backs.

Music nowadays is all about hiring 40-50 year old music professionals, and slapping a cute face on top. It kind of bastardizes the whole concept, but these producers are really really good musicians.

I met Christina Aguilera's producer and he's produced Quincy Jones and listens to all sorts of music -- jazz, techno, etc.

These people understand the concept of pop music through and through, and make cookie-cutter, catchy songs (that go through the bastard record companies, but still...)

And anyway, I agree with the people who say they first downloaded a lot of music to digitize their collection, and now they're pretty much through with it all, and might purchase around 5 albums a year. Frankly I've never bought on iTunes -- I usually buy CD's off amazon.

And don't forget Linda Perry is also Christina's producer (and helped out James Blunt)

needthephone
Dec 13, 2006, 09:16 AM
The sample looks too small to be conclusive but personally I have never brought off itunes. Why would you though? You by an inferior quality compressed recording, with no hard copy and it will be gone if your computer dies. Sorry not a fan of itunes but I love the ipod.

caccamolle
Dec 13, 2006, 09:30 AM
ok, and according to Apple, things actually look pretty good for the ITMS.

It looks like it was mere misinformation spread by Forrester Research Inc. This is a name to remember. May be they were short Apple shares ??

It just did not make much sense, as I believe most of us said around here.

freeny
Dec 13, 2006, 10:03 AM
Now this from appleinsider-
http://www.appleinsider.com/article.php?id=2302

This (IMO) may have been an attempt to artificially lower apple stock and bring back some cheaper pricing. Im smelling foul play....:confused:

scottlinux
Dec 13, 2006, 10:50 AM
Sub-CD quality, DRM music. This is why I don't buy from the iTunes store.

They should offer flac, or apple lossless at that same current prices. THEN it would be a good deal.

caccamolle
Dec 13, 2006, 11:38 AM
Sub-CD quality, DRM music. This is why I don't buy from the iTunes store.

They should offer flac, or apple lossless at that same current prices. THEN it would be a good deal.

I agree with you in principle. However I wonder how many people have hi-fi systems that can really resolve differences in quality between the various formats above what the ITMS offers.

On DRM it is a real huge pain in the behind; I still don't really understand it (and now with my 4th mac in the house I might have to). I however just don't know what else can be done in the attempt to defeat piracy.

Anyhow, for my critical music I also buy CDs only, and for all the remaining stuff I find the practicality of the ITMS store hard to beat.

JGowan
Dec 13, 2006, 12:08 PM
Nobody loses on this actually.

Apple is selling iPods like never before (the new shuffle will prove to be a bigger hit than the first one and the 80GB iPod will be even bigger). We've heard time and time again that Apple doesn't make money on the store so it's no big deal.

Content providers don't care (too much) as the store has always been just a very small suppliment to their overall sales.

Customers aren't losing. The store is there any time they want, with new content coming in every day.

JGowan
Dec 13, 2006, 12:17 PM
My biggest thought about the slower sales is the fact that people are repeat buyers of the iPod and know how the store works and aren't in as big a hurry to add content as they were intially. I have purchased about 400 tracks/video files since the store's introduction. Most were within the first year. I love Apple. I love the store. I've decided that, if the music is really good, I want the CD. I'd rather buy a Used "Very Good" CD from Amazon than download a whole album at a mere 128kbps. For quick song or two to please the wife or to have on my iPod, I still use the store.

Does this mean that Apple is losing money on me? No.

Personally, in 5 years, I have owned 6 iPods. I have bought iPods for my wife (5G & 2G Shuffle), father (3G), sister (3G & 5G) and best friend (2G). Apple is getting business as I'm certainly shelling out the money for my loved ones but not spending it on the store. I'm sure there are more like me.

It's funny that another big story on the horizon is the possible BEATLES introduction on iTunes. Why wouldn't the Register share that info as a possible "silver lining" to the current revenue cloud?

My guess is spin. Sex and Bad news are the E.F. Hutton of media.

tk421
Dec 13, 2006, 04:29 PM
Now there's this article (http://www.washingtonpost.com/wp-dyn/content/article/2006/12/13/AR2006121300500.html). Seems analysts at Piper Jafray think iTunes sales went up!

Flowbee
Dec 13, 2006, 04:46 PM
Here's an interesting comment posted on the original analyst's blog (http://blogs.forrester.com/devicesmedia/2006/12/itunes_sales_ar.html) (bold added by me):

Remy Fiorentino from Forrester here, I helped Josh with the analysis for this report.

TIMK - The 65% decline in revenue was between January 2006 and June 2006. This decline is statistically significant, but is still based on a sample of 181 iTunes buyers. When we compare this to 2005 data, we see that revenues declined 39% from January 2005 to June 2005. Is 2006 worse than 2005? It's hard to say. However, the January 2005 revenue was a bit higher than the January 2006 revenue, and the June 2005 revenue was more than twice the June 2006 revenue. Our data suggests that the iTunes growth has slowed, though neither Josh nor I would say sales have "collapsed".

181 iTunes buyers? They don't make a roll-eyes smiley big enough...

Passante
Dec 14, 2006, 06:14 AM
Never believe the Register, Thurrott, or cNet. They lack "truthiness" TM :D

balamw
Dec 14, 2006, 08:57 AM
Never believe the Register, Thurrott, or cNet. They lack "truthiness" TM :D

I don't think you're using that word correctly 'cause truthiness (http://en.wikipedia.org/wiki/Truthiness) is all they've got.

B

Passante
Dec 14, 2006, 06:23 PM
I don't think you're using that word correctly 'cause truthiness (http://en.wikipedia.org/wiki/Truthiness) is all they've got.

B

True, very True

apb3
Dec 14, 2006, 10:03 PM
http://blogs.forrester.com/devicesmedia/2006/12/itunes_sales_ar.html


http://blogs.business2.com/business2blog/2006/12/itunes_sales_ar.html

http://www.digitalmusicnews.com/#121406apple

Don't see the mainstream media-ocre, reporting this with such zeal...

Kid Red
Dec 28, 2006, 02:25 PM
sniff, sniff, is that crow I smell Register? 413% increase in sales...... LOL