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iTunes Sales 'Collapsing'

ScuttleMonkey posted more than 7 years ago | from the nothing-definitive dept.

Music 651

Alien54 writes to tell us The Register is reporting that based on reported revenues this year iTunes sales are plummetting. From the article: "Secretive Apple doesn't break out revenues from iTunes, but Forrester conducted an analysis of credit card transactions over a 27-month period. And this year's numbers aren't good. While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring's rebound wasn't repeated this year."

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651 comments

iTunes 7.0 (1, Insightful)

Anonymous Coward | more than 7 years ago | (#17203504)

The disaster that was iTunes 7.0 is a very likely explanation for this. It must have cost Apple millions to release a version of iTunes that failed to run properly on Win32. If nobody lost their job over that, it says some very bad things about the company's management.

More to it than perhaps that (5, Interesting)

moriya (195881) | more than 7 years ago | (#17205092)

I think there's more to the declining sale than just a release of iTunes 7.0. I'm no expert on how things are going but it seems Apple is expanding a bit too much as to what they offer in the online store. First, we had just plain ol' music. And that's fine given the iPod can only play music. Then it expanded to photos and then videos. Soon the store offered some music videos... then TV episodes... and now movies...

Maybe it's because of other things... but my feeling and opinion is that Apple should have stuck with music overall instead of expanding into selling music videos, TV shows, and movies.

Re:More to it than perhaps that (3, Insightful)

Jason1729 (561790) | more than 7 years ago | (#17205334)

I would like to see a mac mini with TiVo-killer hardware and software, but I doubt it will exist as long as Apple is selling TV shows in their store.

The movies and TV shows are in crappy quality aimed at the iPod screen size too, so they're a gross ripoff given that they're priced like DVDs.

Front Row (5, Informative)

Savage-Rabbit (308260) | more than 7 years ago | (#17205514)

I would like to see a mac mini with TiVo-killer hardware and software, but I doubt it will exist as long as Apple is selling TV shows in their store.

The movies and TV shows are in crappy quality aimed at the iPod screen size too, so they're a gross ripoff given that they're priced like DVDs.


I can't comment on the accuracy of your description since iTunes isn't available where I am living at the moment so I haven't been able to take a look at these services and I am to lazy to go to the trouble of making use of the loopholes. However, if that's really true and iTunes movies and TV shows are aimed at the iPod then Apple is barking up the wrong tree. Selling Movies and TV shows through iTunes is a good idea but they should tie it into Front Row and aim the sales at the desktop/mediacenter user not the iPod user. The iPod is a music player... period. I don't understand why Apple hasn't done more with Front Row and Mac-Mini combo. Perhaps they are so busy trying to wring the most out of the iPod they have forgotten about their other media products. I use a Mac-Mini as a media center along with an Elgato tuner and it works brilliantly but only because Elgato tacked a home made extension onto Front Row for their TV tuner which is a good thing since the remote Elgato ships with their tuners is (in my experience at least) complete crap. How hard can it be for Apple to create an API for TV tuner manufacturers like Elgato to use to integrate their products into Front Row? Still, it's cool to be able to control a DVD player, music jukebox, photo slideshow viewer, movie player and a TV tuner complete with recorder using a 6 button Front Row remote.

Re:More to it than perhaps that (1, Interesting)

Anonymous Coward | more than 7 years ago | (#17205536)

Maybe it's because of other things... but my feeling and opinion is that Apple should have stuck with music overall instead of expanding into selling music videos, TV shows, and movies.

Unless that was the plan all along. Apple makes little to no profit from music, music is a fickle industry and the labels had to be brought to the table kicking and screaming. They did not want online distribution. it was forced upon them. It's almost 2007 now.. What, eight or nine years past Napster's heydey... And they still seem to wish downloadable music would just go away. To them, the iTunes store is a "strange bedfellow", and to Apple, the store is nothing more than a way to sell iPods.

The TV and movie industry, on the other hand, seems to want to find a way to distribute online. Apple wants to be the one to do it. I would bet that the arrangement here is much more in Apple's favor and that, unlike music, Apple makes a profit from every TV show and movie sold.

Of course there are valid reasons for each of their positions-- the simplest being the music industry profits from CDs before anything else, whereas a TV show or movie has generally paid for itself already through commercials or the box office.

So what I'm saying is... Could it be that the iTunes music store was just a stepping stone to what Apple really wanted, which is to deliver TV and movies over broadband to the living room?

Re:iTunes 7.0 (1, Informative)

Anonymous Coward | more than 7 years ago | (#17205138)

"The disaster that was iTunes 7.0 is a very likely explanation for this. It must have cost Apple millions to release a version of iTunes that failed to run properly on Win32..."

I don't know how badly it runs on Win32, but I can say that it doesn't work as well as previous versions did on the Mac either. I have no idea who okayed their new playback technique, but apparently they don't have very good hearing, because the quality is *horrible* at times (and I'm up to date). Maybe Apple can't fire them because of fair employment policies (no offense to the hearing impaired). But at least I'm still able to purchase music from the store, which has failed me once for the first time ever, for whatever that's worth -- or not worth.

Re:iTunes 7.0 (5, Insightful)

DrXym (126579) | more than 7 years ago | (#17205386)

I've never used iTunes 7.0 for downloading music, but I use it for managing podcasts. That functionality was seriously broken until 7.02 (frequent occurences included downloads hung forever, stuck video, 100% CPU) and even without bugs lacks any easy way to manage subscriptions. This was a surprise to me since Apple software usually works properly.

Concerning iTMS, my theory is that CDs are so cheap (or rather iTMS et al are so expensive) that there is little incentive for people to download songs. $9.99 for an album really is a scam when often it is on Amazon on CD for $9.99 and sometimes less. It's easier to buy and rip the CD. A CD that you then own forever.

Must just be the majors. The indies are thriving. (5, Interesting)

linuxbaby (124641) | more than 7 years ago | (#17204860)

Here in the land of the truly independent artists [cdbaby.net], iTunes sales have almost DOUBLED. iTunes is paying our clients almost a million dollars a MONTH in sales, now. (My company is one of the back-end digital distributors of audio to iTunes, Rhapsody, EMusic, etc.)

I feel like this is the same story as "CD sales are declining!" The whole time you've heard that in the news for the past 6 years, physical CD sales for small independent artists has shot WAY up.

It's like you were looking at one of those stock charts that compares two different companies' stocks. The big famous artists would be that stock whose value has fallen from $100/share to $70/share. But the independent (mostly unknown) artists are like a $1 stock that is now at $5. It's more newsworthy to talk about the big visible stock falling, but the real story down here is in the huge boost that the indies have gotten from improved distribution / availability.

Check out this visual / geographic metaphor [longtail.com], too.

Re:Must just be the majors. The indies are thrivin (-1, Troll)

Anonymous Coward | more than 7 years ago | (#17204900)

and how much are you going to give back to charity?

Re:Must just be the majors. The indies are thrivin (5, Insightful)

MrPerfekt (414248) | more than 7 years ago | (#17204958)

No, this is just some bad data. If "secretive Apple" isn't publishing data, where do that get it from? Oh yeah, Forrester...

*crickets*

I'm probably missing something and that's okay. Because you can analyze numbers to your hearts content, the point that all the "analysts" are missing is that most of the DRM'd music that's been released is backcatalog, plain and simple. Did it ever occur to anyone that many people probably splurged on legal tunes that they already loved and owned to get it onto their iPod (or whatever). Now that they have all the favorites/classics/etc., there is no reason for them to keep pace with whatever of the 70% crap that the industry pumps out.

Maybe the industry is just slowed down while they wait for Brittany, Nickelback and whatever shitty country singer to release their new album? Stop thinking that small decline in numbers means THE INDUSTRY IS DEAAAAAAD. It's ridiculous.

Re:Must just be the majors. The indies are thrivin (5, Insightful)

Golias (176380) | more than 7 years ago | (#17204984)

Did it ever occur to anyone that many people probably splurged on legal tunes that they already loved and owned to get it onto their iPod (or whatever).

Why would anybody buy a song they already own on CD???

Ripping a song from CD to either AAC or Apple Lossless is faster than downloading via a typical broadband connection.

iTMS is awesome for a very specific purpose: 1-hit wonders.

Anybody who makes an album of consistently good music, I'd rather hunt down a used CD and rip it to a Lossless file, but if I only want one or two songs from a particular artist ever, and I'm not too fussy about hi-fi sound, then $1 per song is a good deal.

Here's your explination: (5, Funny)

Anonymous Coward | more than 7 years ago | (#17205152)

People are lazy. People are stupid. People do stupid and lazy things.

That about covers it.

Re:Must just be the majors. The indies are thrivin (1)

MrPerfekt (414248) | more than 7 years ago | (#17205286)

In the grand scheme of things, CD's haven't been around all that long. Cassettes and vinyl before that can conceivably make up a good portion of a person's collection.

Re:Must just be the majors. The indies are thrivin (1)

Dahamma (304068) | more than 7 years ago | (#17205544)

In the grand scheme of things, CD's haven't been around all that long. Cassettes and vinyl before that can conceivably make up a good portion of a person's collection.

CDs have been around since *1982*. That is 26 years. That means pretty much anyone under 40 has been exposed to CDs as a primary source of music (and though I am over 30 myself, I can state for a fact my parents, aunts/uncles, and grandparents have ALL switched entirely to CDs - and my mom owns over 1/2 of the original Beatles and Stones on vinyl ;) Besides, under 40 makes up pretty much 99%+ of the people who buy music from iTunes, so who cares if the rare aging audiophile (who will hate digital music on principle anyway) has a kick-ass vinyl collection?

"The grand scheme of things" is a pretty useless argument -in the grand scheme of things, printing presses are a new invention - how many hand scribed books have you read?

Re:Must just be the majors. The indies are thrivin (2, Insightful)

SinGunner (911891) | more than 7 years ago | (#17205042)

Your two points work well together. Indie labels don't usually have much of a back-catalog.

Re:Must just be the majors. The indies are thrivin (2, Funny)

Unipuma (532655) | more than 7 years ago | (#17205236)

Stop thinking that small decline in numbers means THE INDUSTRY IS DEAAAAAAD. It's ridiculous.
Because we all know only Netcraft can confirm that something is dying. ;)

Not only that... (1)

hummassa (157160) | more than 7 years ago | (#17205166)

But indies, as a group, release more and more often than the majors (that are just hammering the ears of the poor radio listeners with the same tracks over and over) and it's only logical that even if you are a hardcore .m4a buyer, once you bought all the pop you wanted to put in your iPod, you must start buying some real music (== indies) because iTMS ran out of pop ;-)

Re:Must just be the majors. The indies are thrivin (1)

Jack Action (761544) | more than 7 years ago | (#17205388)

Another dynamic of a typical market seems to be at play here: scarcity.

Indie stuff is rarer on the p2p networks than the major, big label artists. Its difficult to find whole albums, or much beyond whatever underground/sub-genre/or local scene hits an indie artist has had. If the music in question is a few years old, it becomes even rarer on p2p.

So if you want to scratch that itch, you have to pay for the tracks from iTunes, or the artist's website. (That's in addition to the willingness of the average music fan to support these types of artists directly).

Why buy the cow? (1, Insightful)

BadAnalogyGuy (945258) | more than 7 years ago | (#17204902)

Why buy the cow when you can get the milk for free?

Legitimate users of iTunes have always confounded me. What with the way they dress and their holier-than-thou attitude.

Re:Why buy the cow? (5, Funny)

Dan East (318230) | more than 7 years ago | (#17204914)

Beef.

Dan East

Re:Why buy the cow? (1)

Broken scope (973885) | more than 7 years ago | (#17205010)

I don't think the cows appreciate that.

Re:Why buy the cow? (1)

patio11 (857072) | more than 7 years ago | (#17205070)

Of course cowss won't appreciate that, but they're whiners. Where did you think the expression "Don't have a cow, man" came from? It certainly isn't advice for how to make a satisfying dinner.

Re:Why buy the cow? (1)

edwardpickman (965122) | more than 7 years ago | (#17205348)

Why buy the cow when you can get the milk for free?

Because why raise cattle if no one wants to pay for milk?

The Register (5, Insightful)

jeffkjo1 (663413) | more than 7 years ago | (#17204918)

From the article:

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.

So maybe there's something going on... maybe not.

More than that, The Register is not exactly a trustworthy news source. Think of it as the supermarket tabloid of Technology News. I wouldn't be surprised to see something like 'Steve Jobs an Alien Lovechild' on it's front page.

Re:The Register (1)

The Bungi (221687) | more than 7 years ago | (#17204982)

More than that, The Register is not exactly a trustworthy news source

Except, at least around here, when it happens to be reporting something negative about Microsoft. Then it's usually the end-all of online journalism.

Re:The Register (5, Insightful)

1u3hr (530656) | more than 7 years ago | (#17205094)

More than that, The Register is not exactly a trustworthy news source.

To the contrary. I think it's more authoritative than 95% of the "news" that's linked from here. (John Dvorak -- give me a break.) You may disagree with their opinion pieces, but that's another issue. And Slashdot submitters, thorough malice or stupidity, have submitted many of their joke pieces as straight news. They're not to blame for the non-existence of Slashdot's vetting system.

Re:The Register (5, Interesting)

Jah-Wren Ryel (80510) | more than 7 years ago | (#17205114)

The Register is not exactly a trustworthy news source. Think of it as the supermarket tabloid of Technology News.

The Register and the Inquirer (founded by the creator of the Register after losing a power struggle at the Register) never sign NDAs. That means that they rarely get the inside scoop. But, it leaves them completely free to report whatever they dig up, whenever they dig it up.

So, you have your choice - Press Release journalism from places like Anandtech, Tom's Hardware, etc or "You'll know it as soon as we know it" from places like The Reg and The Inq.

Pick your poison. I choose the later - better to get it wrong by accident than by some PR flack's direction.

Re:The Register (1)

Iago515 (862958) | more than 7 years ago | (#17205364)

What your confusing is their blatant editorial/sarcasm that they mix in with their news stories. It's not that the news isn't trustworthy, is that they deliver it with humour and their own style.

For instance: [theregister.co.uk] "CEO swaps, stagnant shares and scandal behind it, HP appears to have reached retirement age for some of its veterans. Last week, HP Labs director Dick Lampman announced that he would depart in 2007, and this week CFO Bob Wayman said that he'll vanish at year end."

Re:The Register (0)

Anonymous Coward | more than 7 years ago | (#17205428)

The Register isn't bad, the problem is the author of this piece, Andrew Orlowski. I would imagine that he wasn't loved as a child because almost all he ever does is write sensationalized anti-Apple articles in an age old effort of getting page clicks at any cost. Now that one of his pieces of poor guesswork and even worse judgement has made it to Slashdot he will be ever so happy.

Early (1)

El Lobo (994537) | more than 7 years ago | (#17204924)

I would say that it's early to say that the sales are collapsing. They will eventually go down because the novellity of the service is past at this moment. That was was a cool thing (download 3-5 songs) is now not so cool. People are begining to realize that owning some bits it's not the same that owning the full work of art that a physical album is, with cover art, and full disc information included. Yes, eventually the iTune sales will go down, but nothing happens over a night.

Is the story full of it? (4, Insightful)

93 Escort Wagon (326346) | more than 7 years ago | (#17204946)

After reading TFA, I'm not sure if what they're deducing is actually real or not. But I can tell you this - when I can get a real CD on Amazon for $10-12, and it costs me exactly that for a noticeably lower-quality digital-only version of the same album, then I see no reason to buy from the ITMS. I don't pirate music; I buy what I want... and the vast majority of my purchases these past three years (the time period over which I've owned an iPod) have been in the form of CDs.

The bigger question, though, is this: Does Apple really care? ITMS can't be making them any sort of profit compared to iPod sales; and iPod sales are still going up. All in all, Apple seems to be enjoying a healthy bottom line.

Re:Is the story full of it? (4, Informative)

Whiney Mac Fanboy (963289) | more than 7 years ago | (#17204972)

The bigger question, though, is this: Does Apple really care?

Errrrr, according to the article, sales are dropping. So I'd say yes - Apple probably do care

If the article is correct in the assumption that sales are dropping due to DRM (which would seem to hold true in my experience), then I'd say Apple would care alot - nothing worries a company more than a division's future earnings collapsing.

Futhermore, ITMS music shackles a consumer to an iPod. A portion of future iPods sales rely on ITMS sales right now.

Re:Is the story full of it? (1, Troll)

iamacat (583406) | more than 7 years ago | (#17205170)

Ever tried to burn your songs to CDs? Apple's DRM is just so that teenagers don't just copy their whole music library to other people. If you are an audiophile, well you probably don't mind waiting for a music DVD from Amazon and you wouldn't think of playing it on an iPod then.

Re:Is the story full of it? (0)

Anonymous Coward | more than 7 years ago | (#17205248)

If you are an audiophile, well you probably don't mind waiting for a music DVD from Amazon and you wouldn't think of playing it on an iPod then.

Actually, if you are an audiophile looking for a music player, you might be motivated to buy an iPod specifically because it actually supports a lossless format, unlike the Zune. Then you can listen to your lossless audiophile audio through your $300 Etymotic headphones...

Re:Is the story full of it? (1)

sandoz (49648) | more than 7 years ago | (#17204976)

I do remember reading that Apple operated ITMS at a loss in order to sell iPods. So, I agree, who cares. I tend to buy some music from ITMS and some from the stores, it just really depends if I feel like going to the store or not....

Re:Is the story full of it? (1)

1u3hr (530656) | more than 7 years ago | (#17205120)

I do remember reading that Apple operated ITMS at a loss in order to sell iPods. So, I agree, who cares.

But if people are rolling their own MP3s, they can easily move to any other iPod clone. If they have a big iTunes collection, they're pretty much locked in to iPod (I know, there are ways, but nor as simple as copying an MP3.)

Re:Is the story full of it? (4, Interesting)

DECS (891519) | more than 7 years ago | (#17205230)

The fantasy of iTunes lock in is rather weak. Anyone downloading iTS music is unlikely to be freaked out by some hypothetical loss in quality from buring to a CD and reimporting it. It wasn't high end audiophile stuff to begin with, so anyone who could hear the difference woundn't be experiencing the problem.

Vendor lock in is not Apple's plan, its the fantasy of people trying to vilify Apple for selling a good product. There is minimal profits with selling RIAA music, since Apple only gets a few cents anyway. The real money is going to the RIAA, or in the case of iTS indies like CDBaby, the artists. The value Apple adds is the service and convenience, and that makes its overall system of iTunes and the iPod more attractive. That's why iTunes doesn't work with other music players, and that's where Apple makes its money: the iPod hardware.

Microsoft thought the money was in downloads, so it set up PlaysForSure to inject itself into stores and players to make tax money on every song moving around. Unfortunately for them, there was no volume of songs being sold. The new Zube is hoping to make money on hardware sales, but because its priced to compete with the iPod, its not making any money either. And subscriptions aren't going to result in anything either - Microsoft bet the farm on music rentals, and consumers are clearly even less interested in signing up for music rentals that they are about buying tracks online.

No amount of analysis studing the buying habits of 7000 people, less than half of whom even use the iTS, will tell you much about how well the iTunes store is doing. Apple's own numbers make it clear that everyone with an iPod isn't buying music. In fact only a minority are both willing and able, since the store doesn't sell music worldwide.

Apple is building a platform based on hardware profits, the same thing it has always done. Microsoft is trying to tax a system with licensing fees. The difference is that in this arena, Microsoft doesn't have cheaper, higher volume hardware sales to ride. It's trying to ride a minority of the market: a fraction of the installed base, made up of less profitable hardware. It has further splintered its efforts by breaking the Zube off from PlayedForSure.

The other missing component between the PC business and the music player business is that music players don't need specialized software, they can run the same music users already have. So Microsoft is also lacking an equivalent to Office to sell its music customers. This is not another Windows.

Why Microsoft Can't Compete With iTunes [roughlydrafted.com]

Newton Lessons for Apple's New Platform [roughlydrafted.com]

Re:Is the story full of it? (2, Interesting)

Mr2001 (90979) | more than 7 years ago | (#17205438)

The fantasy of iTunes lock in is rather weak. Anyone downloading iTS music is unlikely to be freaked out by some hypothetical loss in quality from buring to a CD and reimporting it.
No, but they might figure that the inconvenience of having to jump through those hoops just to listen to the music they've paid for is a reason to stay away from the iPod+iTMS system.

That is, if you buy an iPod, buy a bunch of DRM'd music for it, and then decide next year that you like another player better, you can look forward to hours of burning and re-ripping. If you buy a PlaysForSure device, however, then there's at least some chance that the player you like better next year will also be a PFS device, and your music will be portable. And if you're a think-about-the-long-term kind of guy, those possibilities might influence your buying decisions this year.

Vendor lock in is not Apple's plan, its the fantasy of people trying to vilify Apple for selling a good product. [...] Apple is building a platform based on hardware profits, the same thing it has always done.
You're arguing against your own point here. Apple wants to sell hardware, so it isn't exactly far-fetched that they'd bind their software (music files) to their hardware on purpose - that way anyone who buys the software has an incentive not to jump to another brand of hardware. You can see the same principle at work with OS X requiring Apple brand hardware.

BTW, the name of Microsoft's new player is "Zune".

Re:Is the story full of it? (1)

killjoe (766577) | more than 7 years ago | (#17205454)

Actually with zune dollars MS has found a great way to make money off their music store. Because you are not allowed to spend just a buck and buy a song you have to fork over five bucks to get the song you want. While they are waiting for you to buy the other four songs they are earning interest on your money. MS by forcing you to purchase in lots of five is going to make millions on interest.

It's clever and a great way to make money while ripping off your clients.

Re:Is the story full of it? (1)

Lars T. (470328) | more than 7 years ago | (#17205414)

I do remember reading that Apple operated ITMS at a loss in order to sell iPods. So, I agree, who cares.

But if people are rolling their own MP3s, they can easily move to any other iPod clone. If they have a big iTunes collection, they're pretty much locked in to iPod (I know, there are ways, but nor as simple as copying an MP3.)

Again why would Apple care that people don't buy from iTMS anymore, they already bought a song from the iTMS and can't switch anymore.

Re:Is the story full of it? (1)

mrfett (610302) | more than 7 years ago | (#17205406)

i've noticed that in the last 3~4 months amazon's prices have become more competitive with the iTS. i always compare prices, and there have been several times i've ended up ordering a handful of cds from amazon rather than downloading them because it's just cheaper. on the other hand, i can see derek's point above about indies. there have been more than a few times that i've wiped the lotion off my hands after watching the latest suicidegirls podcast and gone to the iTS to look for the artist featured in the vid.

Tell ya what Apple... (2, Insightful)

Nemus (639101) | more than 7 years ago | (#17204964)

Make your player truly affordable for a full time college student working a full time job, give me the ability to easily take all the songs I buy to any device, any media I wanna take them to, and we'll talk. In the meantime, I'll buy CDs from my local indie record store, and do with them as I see fit.

Re:Tell ya what Apple... (5, Insightful)

cei (107343) | more than 7 years ago | (#17204994)

Wait, you want them to make a player you can afford, and you still want to say "screw 'em" if you can't easily take your music to a competitor's player? Doesn't sound like you're giving them an incentive to do either.

Re:Tell ya what Apple... (0, Redundant)

supasam (658359) | more than 7 years ago | (#17205004)

Yeah, man, burn those bad boys to 8 track and the boogey man can NEVER get you!! By the way, if you're "a full time college student working a full time job," and you want an Ipod but can't afford one, you're doing SOMETHING wrong. Maybe you need to skip then bag today and invest in a shuffle. Or get a loan, it's not going to kill you. In fact, get a loan so you don't have to work a full time job. Thats what loans are for. You can pay it back, don't worry, you're not getting an english degree, are you?

Re:Tell ya what Apple... (1)

hexadecimate (761789) | more than 7 years ago | (#17205168)

>You can pay it back, don't worry, you're not getting an english degree, are you?

I have *three* English degrees, you insensitive clod.

(Oh, and two ipods. Also your last sentence contains a comma splice, and "English" should be capitalized. So there.)

Re:Tell ya what Apple... (1)

OneSmartFellow (716217) | more than 7 years ago | (#17205468)

Also your last sentence contains a comma splice, and "English" should be capitalized.



Sentences beginning with the word "also" are considered grammatically correct in U.S. English; however, students of the Queens English should avoid this construct. Furthermore, your sentence cries out for a semicolon after the word "splice" followed by a comma after the word "and." This is because you have two independant clauses joined by an independant marker.

Your last sentence contains a comma splice; and, "English" should be capitalized.

Re:Tell ya what Apple... (0)

Anonymous Coward | more than 7 years ago | (#17205224)

Uh oh Apple, some random person on the internet isn't going to buy your stuff unless you massively change a proven successful formula, better do what he says! He is a random guy on the internet!

DRM and the improved iPod alternatives (5, Interesting)

ZP-Blight (827688) | more than 7 years ago | (#17204988)

When there was only the iPod as a really good portable player, iTunes was the only game in town. Now when you can get decent quality alternatives, interoperability is becoming a much bigger issue and DRM is like a doorstop not letting anyone in.

And when people can't get into a particular venue, they'll look elsewhere. And science bless the internet, there's a lot to choose from these days.

Re:DRM and the improved iPod alternatives (5, Funny)

cei (107343) | more than 7 years ago | (#17205024)

there's a lot to choose from these days

indeed -- iPod, iPod Nano, iPod Shuffle...

I use a gift card (5, Interesting)

Derling Whirvish (636322) | more than 7 years ago | (#17205000)

I use a gift card. Is that tracked like the credit card sales?

Re:I use a gift card (1)

The One and Only (691315) | more than 7 years ago | (#17205104)

Depends on how the gift card was bought. If it was bought at a cash register with cash, there's no way to track it through credit card records.

Re:I use a gift card (0)

Anonymous Coward | more than 7 years ago | (#17205128)

I use a gift card. Is that tracked like the credit card sales?

RTFA (first page even):

The figures don't include gifts redeemed via the iTunes Store.

Re:I use a gift card (4, Funny)

laffer1 (701823) | more than 7 years ago | (#17205240)

Well then its not a good way to track sales. Apple offers gift cards as well as paypal in the US at least. I often by my relatives iTunes gift cards for birthdays and sometimes christmas gifts. My mom gets at least $45 in gift cards a year for instance. Also, gift cards are available at local retailers like Target, etc. That wouldn't be tracked in the Apple store (online) sales either. (regardless of payment method)

I can think of one reason the conclusion maybe true though. Since Apple started selling tv shows and movies, I've bought very little music from them. Most of my iTunes budget goes into shows now. I've bought every episode of Monk, and various other things. I've got about 30GB of content that was purchased through ITMS between two computers. This does not include my wife's collection.

Another poster was also right. I have purchased most of the older tracks that I'm going to buy. At this point, I buy tracks from a few new albums if I actually like the song.

Finally, I use iTunes on Mac OS and Windows XP nearly everyday. I often stream from my iBook to my windows machine to use my nicer speakers. It does seem a little buggy and I can't stand the hidden equalizer. I've noticed that it acts up when downloading from Apple if my network connection is maxed out. I've also noticed that it locks up frequently on my Mom's PC last time I was there. She's on a dialup and even trying to get album artwork will cause a freeze. After 20 minutes I just killed it since there was no activity on the dial-up. Apple needs to fix iTunes quickly. There's room for improvement in usability too. My mother is having trouble using 7.0 and she jumped from 4 to 7. I get calls every few days because she had it crash or can't figure out how to do something.

As for iPod sales, I know 4 people getting shuffles and one getting a 30GB iPod.

I'd guess the trend will continue (0, Flamebait)

OpenSourced (323149) | more than 7 years ago | (#17205012)

So at last people are waking up to the hard DRM facts of life. I guess it took some time of real use to become aware that yes, they were now _paying_ to get _less_, uncredible but true. Probably they couldn't believe it before, after all, everybody was doing it, and it couldn't be that everybody was stupid. Somebody _surely_ had read the conditions before buying, and if nobody had found them bad (as evidenced by the number of iTunes downloads), then they were surely good enough. But the first time they cannot do something they want with "their" music file is I suppose for many the last time they buy anything from iTunes.

I'd expect the trend to continue.

Re:I'd guess the trend will continue (3, Informative)

mr_matticus (928346) | more than 7 years ago | (#17205090)

The thing is that they're paying less and getting less, and getting it faster. Nobody ever made the claim that there weren't any reasons to get CDs.

There are tradeoffs to digital downloads. They're in a lossy format (but arguably more durable if one fails to make a backup of a CD and it gets scratched), delivered nearly instantaneously and always available (no getting out of bed or going to a store where it might be out of stock), and available a la carte for cheaper than CDs.

We already know the RIAA sucks, so there's naturally got to be some tradeoff for increased convenience and lower price. That tradeoff is being saddled with DRM. But iTunes purchases are not really any more or less "ownership" than a CD. They're just different.

I'd like the XXL grain O salt please... (5, Insightful)

Dhrakar (32366) | more than 7 years ago | (#17205014)

Don't forget that the author of the article is Andrew Orlowski. His particular axe to grind is that he wants all of us to pay for digital music via a mandatory flat licensing scheme. That is, all of us would pay a bit (or a lot) extra for our broadband access and that money would be used to pay artists, publishers, etc. Thus, I'd take any predictions he makes about iTunes collapsing as either A) wishful thinking on his part or B) an exaggeration of what Forrester really told him.

Re:I'd like the XXL grain O salt please... (1, Insightful)

Lane.exe (672783) | more than 7 years ago | (#17205046)

Mod parent up, +1 Insightful. I burned all my mod points earlier or else I would.

Orlowski... (5, Funny)

Anonymous Coward | more than 7 years ago | (#17205238)

Some of us wanted to be astronauts, some of us wanted to be firemen or doctors or schoolteachers. Orlowski, now... there's a guy who wants to be John C. Dvorak when he grows up.

We all need our goals.

I guess.

Improve your product Apple... duh (1, Interesting)

popo (107611) | more than 7 years ago | (#17205020)


Other industries improve their products over time. Where's the product improvement here?
Last time I checked Apple was still trying to sell DRM'd low-fidelity 128-bit MP3's.
Ultimately iTunes is a store for ignorant music shoppers who don't know that the music
they're buying is crippled and sounds significantly worse than a CD. When the public
becomes more discerning, its typically time to improve your products. Hello? Apple?

Re:Improve your product Apple... duh (4, Insightful)

cei (107343) | more than 7 years ago | (#17205060)

correction: low-fidelity 128-bit AACs, which do actually sound a bit better than 128-bit MP3s. And using my cassette adapter into the stereo of my 10+ year old car, cruising down the bumpy road at 50+ mph with my AC going full blast, I'm guessing I'm really not going to miss any frequency loss from the source material.

Re:Improve your product Apple... duh (1)

mr_matticus (928346) | more than 7 years ago | (#17205096)

Has the public become more discerning, though? I don't hear many people complaining about the audio quality of their iTunes downloads who aren't a) audiophiles or b) indignant Slashdotters.

No DRM better quality alternatives maybe ? (1, Informative)

ozzee (612196) | more than 7 years ago | (#17205026)

I can say I'll never buy from itunes as long as they have DRM.

All the music I have purchased over the last 2 years has been from Candyrat [candyrat.com] records. Here you will find some very impressive artists, not the run-o-the-mill, overhyped bands and singers. They feature "NO DRM", high bitrate MP3's (I'd prefer OGG but I need to bitch about it) and many albums have an electronic equivalent of the album cover.

Why would I possibly consider tieing my hands with DRM or itunes even ?

54% of all statistics are misleading. (1)

eaglebtc (303754) | more than 7 years ago | (#17205034)

The article starts off by citing Forrester's authoritative figures:
"Forrester conducted an analysis of credit card transactions over a 27-month period. And this year's numbers aren't good..."

But then it casts a HUGE shadow of doubt with this:
"(The figures don't include gifts redeemed via the iTunes Store. While Apple can argue this does not reflect the volume of transactions taking place, it gives a more accurate picture of what customers are actually prepared to pay for.)"

I have no doubt that gift cards now account for a far greater percentage of the sales than direct downloads.

Re:54% of all statistics are misleading. (1, Insightful)

Anonymous Coward | more than 7 years ago | (#17205144)

Forrester conducted an analysis of credit card transactions over a 27-month period.

WTF? How does Forrester get hold of credit card records? Don't financial institutions treat their customers' data as confidential any more? I think that's a bigger story than whether the ipod is doing well.

Wtf? (0)

Anonymous Coward | more than 7 years ago | (#17205036)

How exactly did Forrester get access to a massive database of credit card transactions? Is this the retarded AOL search data fiasco all over again? Even if the account personal data has been scrambled, it's easy enough to figure out who people are just by analyzing the data.

When you purchase from Amazon, for instance, they know exactly when your transaction and for how much your transaction was. Just search the "anonymized" credit card database for the same time/numbers. Amazon now has access to every personal transaction you ever made. They can resell this information to their hearts content. If you don't like Amazon as a theoretical villian, replace that with AOL or Walmart or any large retailer.

hohoho (4, Interesting)

djupedal (584558) | more than 7 years ago | (#17205050)

Must be a slow news day in the UK, I guess...

By reading that article (burn job de' jour), and most of the comments here so far, you'd think iTMS only sells music. Man - talk about tunnel vision.

...it doesn't. Movies, TV shows etc . are also part of the menu, so much so, that some are wondering how much longer Apple can call it the 'iT Music Store'.

Ok, so for the sake of whatever, we'll ignore the other digital fares for a moment, and talk about music sales out of the iTMS. Check the calendar...what, a dozen days from now and Santa will do his fear-factored chimney drop, right? All those USD$79.00 2G iPod Shuffles that are being stuffed into stockings as we speak, along with untold tens of thousands of other iPods & iMacs, are going to come online all at once. The bounce for the iTMS will not be trivial, in any case, easily echoing well into 2007 - perhaps just in time for the iTV, iPhone & wIdescreen iPod to hit the shelves and then...bamn...another bounce.

Collapsing - give me a break. The only thing collapsing is the patience of Apple's shell-shocked competitors, as they try to endure being dragged around the town square behind a team of slathering wild horses...again.

Re:hohoho (0)

Anonymous Coward | more than 7 years ago | (#17205106)

It has already been re-branded as "iTunes Store".

Re:hohoho (1)

djupedal (584558) | more than 7 years ago | (#17205142)

There, see - didn't take long at all to flip that one.

...'iTunes Store' - yep, much better, since of course, when I hear or read the word 'Tunes', the first thing I think of is 'Blade - The Series' :)

Teh Sky! It is falling! (0)

Anonymous Coward | more than 7 years ago | (#17205052)

Oh no! iTunes revenue down!? How will Apple survive!? That was the only thing keeping them afloat, right? Right?

iTunes 7 would account for this (-1, Redundant)

Anonymous Coward | more than 7 years ago | (#17205054)

... all by itself. The 7.0 release for Win32 was broken so badly that you couldn't use it to play music reliably, much less buy any. They've since fixed it, sort of, but it's still a travesty.

Apple's stockholders should demand the heads of the developers who released iTunes 7.0 on pikes.

iTunes is dying. (5, Funny)

CCFreak2K (930973) | more than 7 years ago | (#17205084)

It is official; Netcraft now confirms: iTunes is dying

One more crippling bombshell hit the already beleaguered iTunes community when IDC confirmed that iTunes market share has dropped yet again, now down to less than a fraction of 1 percent of all listeners. Coming close on the heels of a recent The Register survey which plainly states that iTunes has lost more market share, this news serves to reinforce what we've known all along. iTunes is collapsing in complete disarray, as fittingly exemplified by failing dead last in the recent The Register comprehensive networking test.

You don't need to be a Steve Jobs to predict iTunes future. The hand writing is on the wall: iTunes faces a bleak future. In fact there won't be any future at all for iTunes because iTunes is dying. Things are looking very bad for iTunes. As many of us are already aware, iTunes continues to lose market share. Red ink flows like a river of blood.

The iTunes Store is the most endangered of them all, having lost 93% of its core customers. The sudden and unpleasant departures of long time iTunes Store customers Bob and Jill only serve to underscore the point more clearly. There can no longer be any doubt: iTunes Store is dying.

...

All major surveys show that iTunes has steadily declined in market share. iTunes is very sick and its long term survival prospects are very dim. If iTunes is to survive at all it will be among OS dilettante dabblers. iTunes continues to decay. Nothing short of a cockeyed miracle could save iTunes from its fate at this point in time. For all practical purposes, iTunes is dead. Fact: iTunes is dying

Shamelessly plagarized by me.

Not enough suckers (-1, Flamebait)

Anonymous Coward | more than 7 years ago | (#17205100)

It appears Apple finally ran out of suckers to buy its DRM-ridden crap for $.99 per track.

Personally I like Allofmp3.com for its wide selection, reasonable prices and NO DRM, so you can trasfer tracks to any devices you own.

Re:Not enough suckers (1)

robzon (981455) | more than 7 years ago | (#17205172)

Yeah... I didn't see any other store selling music in ogg files.
I definitely wouldn't pay for music that has some dumb DRMs on it. It's like paying for a book you can only read when in your bedroom.

sales are plummeting because... (0)

Anonymous Coward | more than 7 years ago | (#17205116)

..the record companies aren't putting out much of anything actually worth buying, and people are noticing. its so easy to listen to what you're about to purchase. there's virtually no hassle at all, vs. a brick and mortar shop where you'd be more likely to buy an entire cd of something you don't like.

So the verdict of Slashdot is... (0)

SuperKendall (25149) | more than 7 years ago | (#17205136)

...Apple is dying.

Where have I head that before...

A few people seem to have forgotten that in the midst of this horric, company ending ITMS slump, iPod sales have risen at phenominal rates quarter after quarter.

Perhaps - just perhaps! - Apple benefits even if people stop buying online so much. Perhaps the iPod doesn't even need lockin to compete.

Credit Cards (5, Insightful)

Joebert (946227) | more than 7 years ago | (#17205160)

Who the hell is Forrester & how have they had access to Credit Card transactions for 27 months ?

Where the hell did my tinfoil hat go ?!

Just because of the Zune ? (1)

Rastignac (1014569) | more than 7 years ago | (#17205190)

Now comes the times of the Zune; what a success !
iPod and iTunes will be soon dead.
Microsoft rulez !
(Errr ? Ooops. Sorry).

Sales are down since January? (5, Insightful)

McNally (105243) | more than 7 years ago | (#17205192)

Sales are down since January, hmmm? Gee, I wonder what happens in January... Could that be the month that huge numbers of people who received iPods for Christmas try out the iTunes store for the first time? How about waiting a month and comparing January to January figures before drawing conclusions about a "collapse"?

For reasons earlier posters have done an excellent job of outlining, I'm skeptical about the article and its methodology, but even if they're correct is the situation really a grave concern for Apple? The (barely profitable) iTunes Music Store exists to sell (highly profitable) iPods, not the other way around. As long as iPod sales are healthy (and apparently they're very healthy) the effects of "collapsing" sales at iTMS would be secondary or tertiary concerns for Apple's digital music player business. Apple's big wins from the iTunes Music Store come through FairPlay DRM lock-in and influence in the music industry, neither of which is yet affected by these supposedly "collapsing" sales figures.

Assuming statistic is correct...obvious reasons (1)

jasmak (1007287) | more than 7 years ago | (#17205204)

Assuming that the statistic is correct there are many very logical explanations for this trend. But what I think are the most blatant reasons are:

1) Big Artist music did really bad this year and many of the big artists sound exactly the same in every song so why buy more than just one?

2) The longer itunes proves to be successful, the more other companies will strive to compete with them and some of those are finally starting to catch up.

3) Competition among players (ie. zune) as well as most cell phones integrating mp3. People are realizing more and more that phones are the future of mp3 players and they don't want to invest in DRM'd songs that wont work on most phones or other mp3 players.

Re:Assuming statistic is correct...obvious reasons (1)

jawtheshark (198669) | more than 7 years ago | (#17205398)

People are realizing more and more that phones are the future of mp3 players

Someone really got to explain me that logic someday. Why in hell would I want to drain the battery of my cellphone by playing music with it. My cellphone easily lasts a week without a recharge, which is not something I can say about my shuffle. So, if I suddenly started to use my cellphone, I'd have to recharge it every day, or risk missing an important call.

I know most people claim "integration", but I think it's missing the point of specialized devices. My Zire 31 can play MP3s and has more than enough space to hold a few (1GB SD card), but I never use it to play MP3s.

Summa summarum: if I'd go on the "integration bandwagon", I'd like to have a device that can hold 1GB of songs (=my Shuffle), function as a PDA (=my Zire) and be usable over a week without a charge (=my cellphone). I don't think that I'm going to find such a beast. Oh, and don't let me begin about cameras in cellphones... I now see tourist taking pics with cellphone cams, as if it were as good as a 5 year old 2Megapixel camera with real optics. *sigh*

Back catalogue (1)

mwvdlee (775178) | more than 7 years ago | (#17205208)

So I guess this means most people have downloaded any back catalogue they want on their iPod's and are now just going to buy new releases. Logically, there are going to be less sales to those people.

*revenues* not sales (1, Interesting)

Anonymous Coward | more than 7 years ago | (#17205222)

if you read the article, it sounds like there is a greater percentage of lower-margin sales happening (tracks) now vs. higher margin stuff (albums).

sales could be up, even if revenues are flattening.

Re:*revenues* not sales (0)

Anonymous Coward | more than 7 years ago | (#17205314)

Why would anyone wants to pay 99c per track? I can go to the public library and borrow Music CD for FREE and rip the track myself.

Lots of iTunes goes through gift cards now (2, Insightful)

ewireless (963178) | more than 7 years ago | (#17205272)

The kids that I know of that buy stuff in iTunes mostly get their iTunes funds from gift cards purchased in stores. If this guy is trying to track iTunes sales by tracking credit card transactions done directly with iTunes, he's going to be missing a ton of business that is now driven through gift cards. Those credit card transactions will show for the retailer that sold the gift card, not for iTunes.

well of course (2, Insightful)

tehwebguy (860335) | more than 7 years ago | (#17205288)

this is just like when dvd sales initially dropped off. after a while, people have finished replacing their vhs with dvds and sales will drop.

But what about the DRM? (1)

DaveG, the Quantum P (664195) | more than 7 years ago | (#17205292)

I have never understood why you would buy from iTunes in the first place. Your music is infected with DRM that locks you into only using your music with an iPod. To me, that is (and should be for everyone else) a deal breaker at square one. So if sales are indeed plumeting, I hope that it is because people are getting wise to the unreasonable limitations DRM puts on your purchase. DRM - Making it harder for legitimate users while doing nothing to stop illigitimate users.

Yup, already downloaded it all (1)

Soong (7225) | more than 7 years ago | (#17205320)

It's like we've reached the end of the internet. No more to listen to. Done.

Competition from others and from itself (1)

Dachannien (617929) | more than 7 years ago | (#17205370)

I'm guessing that the decline in iTMS sales arises from two things: an increase in competitors and saturation of the market.

The "increase in competitors" thing is pretty easy. iTMS was the first really popular online music store, with its popularity fueled by association with the ubiquitous iPod. Now everybody and their grandmother has a legit online music store, and the competition is only going to get worse, with online stores starting to abandon DRM so that they can get their music onto the iPod as well.

The "saturation of the market" is sort of a two-pronged thing, though. Part of it is that a very large portion of the people who will become iTMS customers already are customers. The other part is that, when iTMS first started up, people had a large motivation to buy a lot of music: there was a very wide selection with easy access, representing decades' worth of music. But as time passes, more and more iTMS customers will only really be choosing from new additions to the catalog because they've already exhausted what Apple already has available. Eventually, that cash cow is going to dry up.

In other words, the past few years for Apple should be considered a gigantic bonus - one that was the result of an excellent marketing strategy by early entrants to the portable digital music market. Now, the transient is ending, and things are settling down to a more realistic level. The question now is whether Steve Jobs will realize this and move on to the Next Big Thing or not.

too expensive (1)

andyw720 (988090) | more than 7 years ago | (#17205376)

I am from the 'album' buying generation and I still just find it too expensive. I will only purchase tracks of itunes if it is a single song I really want. In Australia itunes albums are $16.99 and record stores are usually $23.99 or lower (can be up to $30 in more expensive stores). This is just not enough of a margin to accept lower quality audio and being DRM locked. Don't get me wrong, I would be willing to accept these downsides but so long as the cost/benefit ratio was more in my favour - something like A$9.99 would be very tempting...

I'll take DRM over spyware CDs (2, Insightful)

mgabrys_sf (951552) | more than 7 years ago | (#17205378)

Anyday. Don't think for a minute that since Sony got nailed that this crap is off the plate. The vendor that enabled Sony's scheme certainly had to have more than 1 client involved, or at least it'd be a safe bet. What isn't a safe bet is exposing my various CPUs that I depend on for income to the ilk that "might" still be out there. It's not a fact as much as a hunch. To me the Sony debacle seems to me to be a case of "the one that got caught".

At that point, I pretty much went with iTunes 100 percent for my purchases, and audiophilism be damned - it's decent enough for my ears (lord knows why AAC has it all over Mp3s - is it the master tapes Apple touts? - I'd love to know).

The 99c Challenge (2, Insightful)

malf-uk (456583) | more than 7 years ago | (#17205520)

Two years ago blanket license advocate Jim Griffin predicted that 99 cents per song was "both too high and too low". "It's too low to pay for the burden of a developing artist, and it's too high to fill an iPod," he predicted It would fill up quicker @ 99c per track if they switched to Apple Lossless
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