Apple's Beats Music Deal Seen as Key to Bolstering Declining iTunes Revenue Momentum

[HarryAinslie]

I don't think it helps when there are pas on the app store which allow users to download free music.

I don't understand Apple's logic to allow this.

With regards to movies etc, these are far overpriced on iTunes compared to getting DVD's etc. I think Apple should be offering some more deals on movies.

 

[Steve121178]

What do you do when you do not have a data connection to stream the music?

You can download or stream. No issue

 

[usarioclave]

Definitely agree, it's great being able to legally check out new bands and songs I hear on the radios and at parties on the fly wherever I'm at. Now, what it does to my data plan is a different story, though.

Music discovery is something that a minority of people actually do; most people just listen to the radio. They hear/get tracks from their friends.

Those people who discovered music were called "tastemakers" or something like that.

Those are the people who really care about discovering new music. They're already getting subscriptions to whatever.

Everyone else doesn't really care. Look at the radio stations: country, classic rock, hits, classical, indie, oldies. For the vast majority, anything that gets into rotation in their genre category is what they listen to. If they want something new or out of genre (if they're listening to a classic station), they turn to the hits station.

 

[rp2011]

Everyone I know uses Spotify or something similar. I honestly do not know anyone who buys CD's or pays for individual downloads other than older people.
Much the same way with movies and Netflix instead of buying DVD's or downloads. It's because of the sheer convenience and affordability of on-demand subscription.
I am sure iTunes will sell individual tracks and movies for a long time to come, but most younger people I know would just rather stream and explore movies and music on demand than buy. Let's remember AOL still makes money from landline internet and Xerox still sells copiers even as most customers have moved on.

Most entrenched companies, when they have a steady stream of income, develop tunnel vision and the company focuses all of their energies on that one thing and becomes complacent. Content in the short term as new ideas pass them by. We saw Microsoft, AOL, Xerox and Smith Corona go this way. Hopefully we will not see Apple do the same.

 

[PatriotInvasion]

How many songs do you buy a year. for 9.99 a month, to me it's cheaper to just buy what I want.

I tend to agree with this, but perhaps you buy less music because you feel the pain of every transaction one-by-one. While $9.99 may be a little more expensive than what you typically would purchase in a year, it opens the doors to all kinds of music that you never knew you liked and in the end may end up being a bargain in relation to the enjoyment you get out of it.

Regardless, I doubt the iTunes purchase model disappears. More likely it will exist alongside a subscription model for those that prefer it --- similar to how iTunes Match is available if you choose to buy it allowing for streaming of your library and ad-free iTunes Radio.

 

[dvdlovr24]

That would be nice! Maybe you could explain how that every HD movie I've purchased in iTunes have all been 720p...

Sounds like you need to go change your preferences in iTunes. Select preferences, then store and you will see an option to select 1080p for downloading. You can go back and redownload your movies in 1080p.

 

[musika]

Maybe your to young but musicians say this for decades if not centuries. Your chances are similar to those who play lotteries to make their living.



Get a real job


(...says the drummer)

I do understand my chances. My point was that people deserve to be paid for the work they do.

 

[MacSince1990]

Why buy music from iTunes when I can stream whatever I want for a small monthly fee with Spotify?

Or download it. Been doing this since the early days of Limewire. Never paid for a song (CD) unless I wanted to support the artist.

Or hell even YouTube it.

 

[jedifaka]

The price of exclusivity?

For lots of services, I can see how Apple's strict platform limitations can support the bottom line.
But for music, maybe a subscription service that's doesn't require strict platform allegiance in perpetuity makes some sense. I wonder if an Android app for iTunes would help or hurt Apple. I think it'd very obviously be a benefit to iTunes. But maybe ecosystem "stickiness" is more valuable to Apple as a whole.

 

[NY Guitarist]

At face value I really don't see 200,000 subscribers, two 'name' employees, and a product line that Apple could easily acquire or create for far less than $3B being a smart move.

If this deal is legit maybe there is some behind-the-scenes stuff that is worth $3B. I doubt it though.

Once again, I wonder if this isn't the gangsta way to hype the Beats brand name by generating a rumor of acquisition by Apple, with Beats et al as the source.

 

[scottsjack]

Here is the iTunes purchase story from just one consumer, me. I prefer to buy Hi-Res files from HDTracks in the highest bitrate they sell. My second choice is music on CDs.

I do buy on occasional song from iTunes, maybe an oldie but goodie or a trial. A few one-song trials from iTunes have led to more than a few CD purchases from Amazon.

Sound quality is important to me. Even on my MBP and iPhone the difference in the sound quality between iTunes and CD varies from just noticeable to distinctly better. The difference between iTunes and HDTracks Hi-Res varies from incredibly, stupendously better to incredibly, stupendously better.

For those of us to like 192/24 or 96/24 music Apple is missing out on sales. Hi-Res music at HDTracks is not cheap, often $30.00 for a 192/24 album but I am willing to pay for it.

 

[Sigma4Life]

Lots of good info on here...

My POV is that streaming @ $10/month is like renting a place to live. The day you move out (stop paying) you have nothing! I'll pay my mortgage/iTunes purchases and accept that I have less access to some music but in the end I'll have something. Just my $0.02

You missed an important point. $10/month streaming is more like renting a HUGE mansion on beach front property that you & I could never afford to own (i.e. buying every song ever created). The alternative is to pay mortgage on a small house you can afford to buy (i.e. buying 1 album at a time).

I'd rather RENT a mansion for cheap than OWN a shack.

 

[RightMACatU]

You missed an important point. $10/month streaming is more like renting a HUGE mansion on beach front property that you & I could never afford to own (i.e. buying every song ever created). The alternative is to pay mortgage on a small house you can afford to buy (i.e. buying 1 album at a time).

I'd rather RENT a mansion for cheap than OWN a shack.

You have a point.
But I already have a huge mansion/iTunes Library that I built from CDs and purchases.

 

[Sigma4Life]

You have a point.
But I already have a huge mansion/iTunes Library that I built from CDs and purchases.

Except that your huge mansion is more like a museum since it doesn't automatically contain new songs released today, tomorrow, next week, etc. You have to continue to buy / download new songs to keep it fresh. $10/month to stream is still preferable for me.

 

[Uofmtiger]

Here is the iTunes purchase story from just one consumer, me. I prefer to buy Hi-Res files from HDTracks in the highest bitrate they sell. My second choice is music on CDs.

I do buy on occasional song from iTunes, maybe an oldie but goodie or a trial. A few one-song trials from iTunes have led to more than a few CD purchases from Amazon.

Sound quality is important to me. Even on my MBP and iPhone the difference in the sound quality between iTunes and CD varies from just noticeable to distinctly better. The difference between iTunes and HDTracks Hi-Res varies from incredibly, stupendously better to incredibly, stupendously better.

For those of us to like 192/24 or 96/24 music Apple is missing out on sales. Hi-Res music at HDTracks is not cheap, often $30.00 for a 192/24 album but I am willing to pay for it.

I would also love to see iTunes switch to a lossless format. I don't think it makes sense to pay for lossy files when I can stream in as good or better quality from Beats or another service (I am currently testing Beats). The opportunity for paid downloads is in lossless and hi rez would be even easier to market.

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Except that your huge mansion is more like a museum since it doesn't automatically contain new songs released today, tomorrow, next week, etc. You have to continue to buy / download new songs to keep it fresh. $10/month to stream is still preferable for me.

In this scenario, I already own a museum and I use the streaming services to find new pieces for it.

 

[Nunyabinez]

Who spends $10 on an album when you can buy the two or three tracks you actually like and let the filler sit there?

What sucky artists do you listen to that only produce two or three good songs on an album? That says more about what you listen to than anything.

 

[Nunyabinez]

You missed an important point. $10/month streaming is more like renting a HUGE mansion on beach front property that you & I could never afford to own (i.e. buying every song ever created). The alternative is to pay mortgage on a small house you can afford to buy (i.e. buying 1 album at a time).

I'd rather RENT a mansion for cheap than OWN a shack.

Actually, that's a poor analogy. I own everything that I'm interested in listening to. I don't live in a shack, and you don't get a better experience than I do. we both are listening to what we want to listen to.

If I was looking for a radio-like experience, then I would subscribe to a streaming service. I like "putting on" an album and listening to it several times, then finding another to do the same with.

I'm not criticizing anyone who wants to stream, but if your use case is better supported by purchasing music, then that what you should do. For me, I'm old school and buy my music.

 

[Soni Sanjay]

Here is the iTunes purchase story from just one consumer, me. I prefer to buy Hi-Res files from HDTracks in the highest bitrate they sell. My second choice is music on CDs.

I do buy on occasional song from iTunes, maybe an oldie but goodie or a trial. A few one-song trials from iTunes have led to more than a few CD purchases from Amazon.

Sound quality is important to me. Even on my MBP and iPhone the difference in the sound quality between iTunes and CD varies from just noticeable to distinctly better. The difference between iTunes and HDTracks Hi-Res varies from incredibly, stupendously better to incredibly, stupendously better.

For those of us to like 192/24 or 96/24 music Apple is missing out on sales. Hi-Res music at HDTracks is not cheap, often $30.00 for a 192/24 album but I am willing to pay for it.

ABX test or you are lying. Period.

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I would also love to see iTunes switch to a lossless format. I don't think it makes sense to pay for lossy files when I can stream in as good or better quality from Beats or another service (I am currently testing Beats). The opportunity for paid downloads is in lossless and hi rez would be even easier to market.

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In this scenario, I already own a museum and I use the streaming services to find new pieces for it.

You do know that Apple's AAC 256 kbps is better than Beats 320 kbps MP3 right?

 

[AdonisSMU]

What sucky artists do you listen to that only produce two or three good songs on an album? That says more about what you listen to than anything.

Every artist is sucky then. Even the best artists have filler on their albums...or songs that don't appeal to me. It's not that hard to do.

 

[iolinux333]

Hey Apple, recorded music is a dying business! You can save THREE BILLION DOLLARS by not buying more of a dying business.

 

[iMacFarlane]

As a professional medium it is dying. Very few can make enough money to pay bills or rent, same for almost anything that is digital or now digital; app developers, photographers, artists, video editors, writers (books/magazines), etc, etc. The price the public is willing to pay for anything digital is getting closer and closer to zero every year.

Roger that. Definitely visible in the app store's race to zero (and the current preference of the general public to FTP titles). It will be interesting to see where music goes over the next 20 years.

 

[ericinboston]

The declining revenue issue is a pretty easy item to figure out:

If you think about it, iTunes is the 1-stop-shop for all the music you would ever want to buy (that's the sales pitch but I still don't buy from iTunes...ever.). So you have this gigantic store with hundreds of thousands of songs. iTunes opens for the first day and as the months and years go on, millions of people buy music because of the inexpensiveness and the sheer catalog. People are NOT buying new music (necessarily), they are buying a new medium (files vs. physically something in your hand).

Now fast forward about 8 years when, gulp, everyone WHO WANTS TO OWN a digital music file basically has...all those wonderful tunes from the 50s to today are owned. People are not going to go back and buy the same items again. Now your customers must buy from the PRESENT...the songs that are good TODAY. The customers are only now buying a few songs/albums a year because, well, you guessed it (and I said it a few sentences back), they already own all the other wonderful hits. And unless you release a new medium/format, all these customers are not going to re-buy anything.

What I have just described is exactly what has been happening to the music industry AS A WHOLE starting in the late 90s...vinyl is the medium in the 70s and everyone buys it...then cassettes come along and everyone kind of restocks their home catalog with cassettes (that not only provide a smaller size but also ability to be used in cars, boomboxes, etc)...then cds come along and everyone re-buys older stuff on cd because of improved sound quality, extreme durability, and other reasons...then from the late 90s to the mid 2000s the music companies notice that gee, nobody's going out and buying all that "back catalog" music anymore...and the industry blames mp3s/pirating/cd copying.

So here we are, iTunes...you've made a lot of money selling billions of songs. But now everybody owns all the older material. So iTunes "sales" begin to decline (around late 2011) because again, everyone already owns it all. The only way iTunes would sell more and more music (meaning, the same old songs) is if the songs were re-released in another format...such as Lossless. But Apple doesn't want to do this...or if it does, it's all wrapped up in either DRM or some proprietary Apple format that can't be used/converted to anything industry standard to play on a computer or transfer back to a physical cd.

What I have described will ALWAYS be the case with selling music...either there needs to be a new format every 5-10 years to keep people re-buying their old/older tunes or there has to ALWAYS be an extremely high quantity of present-day music that will keep people coming back every Tuesday of the week (that is the day new music is released in the USA).

iTunes is now choosing to expand into streaming...which is fine. But I'm completely uninterested in PAYING for music that I can't physically own. I am not a believer (or "truster") of the cloud and similar "services".

 

[rp2011]

But I'm completely uninterested in PAYING for music that I can't physically own. I am not a believer (or "truster") of the cloud and similar "services".

I was with you up until the above.
I have had computers crash on me, misplaced files, disks that skip, eaten cassettes, lost and so forth. In my case I think I would rather have Apple store them for me. Wherever i go, as long as I have an internet connection all my music and more is with me. I have never had so much access to my favorite music than I have today.

 

[Sigma4Life]

Actually, that's a poor analogy. I own everything that I'm interested in listening to. I don't live in a shack, and you don't get a better experience than I do. we both are listening to what we want to listen to.

If I was looking for a radio-like experience, then I would subscribe to a streaming service. I like "putting on" an album and listening to it several times, then finding another to do the same with.

I'm not criticizing anyone who wants to stream, but if your use case is better supported by purchasing music, then that what you should do. For me, I'm old school and buy my music.

Actually you're response further proved my point. You're basically saying you're happy with a smaller house you own because you enjoy each room immensely. When you want another room you'll buy it. At the end of the day you 'own' all of your rooms.

Streaming is the equivalent of saying I'd rather borrow a mansion where I can explore and find new rooms anytime I want without paying more each time I want to try something new.

 

[Nunyabinez]

Every artist is sucky then. Even the best artists have filler on their albums...or songs that don't appeal to me. It's not that hard to do.

I think this highlights another difference between the owners versus streamers. I am very artist centric. For example, I like the Foo Fighters. So, I have their entire catalog and listen to all their tracks because I like the way they write and play music. Yes, some songs are better than others, but I like listening to their music.

You appear to be song centric. You find songs that you like and only want to listen to the songs that appeal to you.

So for me, I am fine to buy a whole album, because I will enjoy all of it, even if certain songs are better than others, where you are interested in only listening to songs that you like.

I have no issues with either approach, but I think that this is one of the reasons that people choose to stream versus own. I could probably do fine without owning music, but I like my collections of my favorite artists.