iTunes sales falling

[Leaf]

Apple ITunes Sales Slid in First Half, Forrester Says (Update4)

By Dina Bass

Dec. 12 (Bloomberg) -- Apple Computer Inc.'s iTunes music store suffered a 65 percent slump in sales during the first six months of the year, reversing almost two years of gains, according to a Forrester Research Inc. report.

The number of iTunes transactions declined 58 percent between January and June of this year, while transaction size fell 17 percent, the Cambridge, Massachusetts-based market- research firm said today. ITunes spokesman Tom Neumayr said the report is ``simply incorrect.''

``ITunes won't save the music business, or Apple,'' analyst Josh Bernoff wrote in the report.

Forrester, which based its findings on analysis of 2,791 U.S. iTunes debit and credit purchases, said it is too soon to tell whether the decline is seasonal or if demand for digital music is falling. Apple got $452 million in sales last quarter from music sold through iTunes as well as accessories for its market-dominating iPod device, the company reported in October.

Shares of Cupertino, California-based Apple fell $2.61, or 2.9 percent, to $86.14 as of 4 p.m. New York time in Nasdaq Stock Market composite trading. Before today, the stock had gained 20 percent this year.

No Recovery

In 2005, iTunes sales dropped after Christmas before rising ``significantly' in May of that year. That recovery didn't materialize this year, Forrester said.

Steve Lidberg, an analyst at Pacific Crest Securities, said in a note today he doesn't see a slowdown in digital music sales. Lidberg, who's based in Portland, Oregon, and rates Apple ``outperform,'' cited other data from researcher SoundScan that show weekly digital album sales have more than doubled to date.

The Forrester report also found that most music stored on iPods isn't purchased from iTunes. Apple sells about 20 iTunes songs for each iPod purchased, even though the devices can store hundreds or thousands of songs.

Many iTunes buyers purchase a few songs at a time with the median size of transactions at $2.97, the report found. One- third of all purchases cost $1.08 or less.

The iTunes store had a profit in the quarter ended Sept. 30, according to Apple. ``Our view continues to be that selling music and TV shows and now movies helps us to sell iPods and accessories,'' Apple Chief Financial Officer Peter Oppenheimer told analysts on an Oct. 19 conference call.

Apple started iTunes in April 2003 to help broaden the iPod's appeal. The iTunes store offers more than 3.5 million songs, 250 TV shows, 9,000 music videos and 100 movies. Apple has sold more than 1.5 billion songs through the site and said it sells more than 1 million videos a week.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net .
Last Updated: December 12, 2006 17:24 EST
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoZMUef6e_4k&refer=home


:eek:
I propose we offer Apple some constructive criticism on how to make iTunes music a hot item again in case the decline continues. IMHO, the price is good but a few tweaks are in order to make it more user friendly, like first removing the crazy padlock on the music. You have to admit that a lock on a peice of music regulating when, where or how it used is pretty darn strange, and maybe the decline in sales is caused by people now knowing this is no ordinary purchase of a recorded piece of music.

When i reinstalled XP, I put it on a larger hard drive than before, and when I tried to play an iTune it said I had to authorize my computer, which I did. Then it informed me, I can authorize up to 5 computers. Shouldn't the limit be however many computers I have, as in no limit?

Policing should not be on the piece of music (which is not only crazy and something very new, it is probably very also very costly), they should just have a law against stealing music with cops arresting the violators and their accomplices.

A feature that i think would be nice, since they already spy on you like peeping toms to watch what you play and know what you purchased, is if you lost a tune that you payed for, you could go get again for free.:p

What do think would improve sales? Is this is just a slump that will soon work it self out?


David:)

[SeanHannifin]

I'm still a tangable CD person. :D Buy CDs! (if you can)

Padlocks, DRM, etc... not appealing...

[Leaf]

I agree, Sean.

Before I was environmentally conscious, if I bought a CD and ended up not liking it much, I would fly it like a frisby as far as the eye could see... but the ones i liked i still have and and can take them anywhere, listen to them on any computer or CD player.

Some young kid a little 10 0r 11 year old girl sent an idea to Apple and they didn't like it. It was including a text of the lyrics with the sale of an iTune. I thought it was a great idea and to take it a step farther they could include a score for an additional charge.

[C J Pro]

Actually, that would be an interesting idea to develop...um, I'll be right back. Just gonna look up a few APIs or whatever is needed to implement the Finale and Sibelius players into my latest creation.

[SeanHannifin]

Some young kid a little 10 0r 11 year old girl sent an idea to Apple and they didn't like it. It was including a text of the lyrics with the sale of an iTune. I thought it was a great idea and to take it a step farther they could include a score for an additional charge.

Ooo... that would be awesome! :D Though I would think it would probably cause more trouble than benefits, what with having to license copyrighted lyrics that listeners can probably find somewhere online themselves anyway. Scores would definitely be fun though. :D

[ptram]

Personally, I bought a couple songs from iTunes, just because I had to listen to them for a job. Otherwise, I continue buying CDs, probably since I've grown in an era of concept albums.

I wonder if the sales are falling due to increasing competition (I doubt this is the reason), or just because they sell the same stuff you can hear everywhere at commercial radios, and the curiosity for the new gadget has finally come to an end.

[Styxx]

Apple ITunes Sales Slid in First HalfSo sad ...:D

[Garritan]

According to a Businessweek report: (http://www.businessweek.com/technology/ByteOfTheApple/blog/archives/2006/12/why_itunes_sale.html?campaign_id=rss_blog_byteofth eapple)

Why iTunes Sales Are Down: Music Is Bad :eek:
There's a lot of buzz going on about this Forrester Research report that portrays iTunes sales as "collapsing." Well, here's the thing: I don't think they were ever all that great to begin with. Sure, Apple has sold some 1.5 billion songs or more by now. But divide the number of songs sold by the number of iPods sold, and the average songs sold per iPod works out to about 22 songs each, and that's over the entire lifetime of the iTunes Store.

I don't know about you, but I haven't been buying much music at all lately. And the reason is that I'm 1) too busy to listen all that much, and secondly, 2) I think that most new music put on the market these days is just abysmally bad....


I have a theory also....

The Sugar Plum Theory:

The Garritan Community Christmas CD came out and people have been flocking to the free album. With so much great holiday music for free, the incentive to pay for mp3s has substantially diminished. Now people are rolling in sugar plums after downloading the album. :D

[Styxx]

I totally agree Mr. G! )(~)(~)(~)(~

[JonFairhurst]

One thing I would like is for iTunes to remember what I bought and let me listen to it wherever I go. The problem with locking the file to a small number of machines is really short sighted. How long do you expect to keep using the computer that you are reading this on?

[Karl Garrett]

One thing I would like is for iTunes to remember what I bought and let me listen to it wherever I go. The problem with locking the file to a small number of machines is really short sighted. How long do you expect to keep using the computer that you are reading this on?

As bad as the DRM of Apple is, it isn't as bad as the competition. Don't blame Apple for this. Do you really think that there would be a single song on iTunes if there weren't some kind of protection for the labels? You can easily reauthorize the songs you purchase and move them to another computer. You can do it in a batch. It only takes a moment.

If you want to rip the copy protection from the tunes you purchased from iTunes, I don't think it's a secret that all you have to do is to burn them to an audible CD. Woops! What happened to it? It's gone.

I think that Apple has made a good compromise with the music industry, that on one hand gives s little protection to the Labels, yet is a very workable solution for the consumer

It could be worse. You could buy a Zune and find that you couldn't play any of the songs you purchased with Microsoft's old DRM. That would be something to be upset about. :D

Karl

[JonFairhurst]

But it's the database thing I'd like them to improve, moreso that the DRM.

Let's say I download one copy and put it on one machine. Then the hard drive dies. Then I have no more music.

It wouldn't be so hard for Apple to keep a database of what I've already purchased and let me hear it.

Of course, in an ideal world we would all back up our data. Then again, in an ideal world HDDs would never die, so we'd never need backup our data.

The idea is that iTunes is a music SERVICE. And it would be a great service to me if I could purchase something at home, and then listen to it elsewhere without wasting my time making copies.

[ptram]

Hum... in the end, it seems we were discussing about nothing:
http://forrester.typepad.com/devicesmedia/

[Karl Garrett]

But it's the database thing I'd like them to improve, moreso that the DRM.

Let's say I download one copy and put it on one machine. Then the hard drive dies. Then I have no more music.

It wouldn't be so hard for Apple to keep a database of what I've already purchased and let me hear it.

Of course, in an ideal world we would all back up our data. Then again, in an ideal world HDDs would never die, so we'd never need backup our data.

The idea is that iTunes is a music SERVICE. And it would be a great service to me if I could purchase something at home, and then listen to it elsewhere without wasting my time making copies.

It's really easy to pick on Apple because they are in the lead. Why are they in the lead? Because they have done things right.

I don't see why musicians and record labels (although I have absolutely no love for the latter) should suffer because of the negligence of someone who doesn't bother to back up his/her files.

If I buy a staple gun, climb up on my roof to lay down some shingles, and let that staple gun fall to its death on the pavement below. Do you think Sears or the maker of the gun would give me a new one? Heck no. I'd just have to suck it up and go to the store and buy a new one.

As a musician, I don't mind giving away my music on occasion, But, I'd like a little control over when and to whom I do this. Now if I were a smart musician, I'd plan a way to have the tune someone purchased disintegrate one year and a day after someone purchased it. Like the hard-goods companies do. :D

We have all probably lost important data for not backing up. I was just as bad as anyone else about this. I had to learn the hard way.

In 1986 or so, I was working on my brand new Mac and using a new program called "Professional Composer". This was one of the first scoring programs for the personal computer. I had been working on a Piece for over a month. There was no such thing as a hard drive, which any mortal could afford to buy. You started up your computer with a floppy, when the system was loaded into RAM; you then loaded the program from another floppy. You would then save your files to a third disk. Now if I were smart, I would have used a forth floppy for a backup. I don't need to tell you that things crashed and my only copy of the piece was destroyed. Three months of ten to twelve-hour working days just down the drain. I had one excuse, I was stupid. With hard drives as cheap as they are, there are no excuses.

I have noticed that it seems to take this kind of major trauma to make most folks learn to back up.

I don't see why it's Apple's or anyone else’s responsibility to take care of someone’s problem if they forget or are to lazy to back up.

In the old days of vinyl, if one scratched her record, or the dog bit it in half, no one was going to fix her problem. Be smart, back up.

I think sometime the consumer has become as greedy as the recording industry. There is a happy medium and I think that Apple has found it.

P.S. if one wants to take his music with him where ever he goes, that’s why they make iPods. If he doesn't want to buy an iPod or music from the iTunes store, buy a Zune from Microsoft and see how easy it is to share your music. Welcome to the social.

Karl

[JonFairhurst]

I don't see why it's Apple's or anyone else’s responsibility to take care of someone’s problem if they forget or are to lazy to back up.It's simple. Their service would be better if they kept a list of the tunes you purchased and let you download them again for free. It's a competitive advantage. It's a benefit to their customers. It costs them almost nothing.

I stopped buying from iTunes. Why? Because I travel a lot and have a lot of PCs and laptops for work and home. And I don't want to worry about which machines have been authorized and which files have been copied where. Example: I'm at work and am inspred to buy something. Then I get home and realize that I didn't take the time to copy it to portable media. I go to iTunes from home, log in and it expects me to buy it again, if I want to hear the music I just purchased that very day.

You're right. It's not their responsibility to simplify things for me. But it would be an improvement in their service that might just get me to buy from them again.