Posted on 12/13/2006 4:47:24 AM PST by MeneMeneTekelUpharsin
AMSTERDAM (Reuters) - Sales at Apple's (NASDAQ:AAPL - News) online music shop iTunes Music Store fell off a cliff in the first six months of 2006, according to a recent survey. Since January 2006 the number of monthly iTunes transactions has declined 58 percent, while the average size per purchase declined by 17 percent, leading to a 65-percent overall drop in monthly iTunes revenue, U.S. market research group Forrester said in a survey among North American consumers. "It is too soon to tell if this decline was seasonal or if buyers were reaching their saturation level for digital music," Forrester said in the report that was published to its clients last week, and made available to Reuters on Wednesday.
Apple's iTunes Music Store is the most popular online music store in the world and Apple said it has sold over 1.5 billion music tracks and tens of millions of TV shows and movies. The decline comes after a period of strong growth. The number of monthly iTunes transactions grew sevenfold, from just over two transactions per 1,000 households in April 2004, to nearly 17 during January 2006. Over that period, the average transaction size almost doubled, to $6.69 from $3.55. Forrester analyzed 2,791 US iTunes debit and credit card purchases made between April 2004 and June 2006 from the research firm's consumer panel.
Most consumers buy just a few songs at a time, while the average is boosted by a smaller number of heavy buyers. "Only Apple knows just how much profit there is at the end of the day on a $1.98 credit card transaction for two songs, but with transaction costs, hosting costs, and the wholesale price of the songs, there's not much margin left," Forrester said. Of all online homes, only 3 percent buy music at Apple's music store, and of those most continue to buy most of their music on compact discs (CDs). "Although Apple is the dominant leader in the digital music industry, the entire category of digital music made up just 4 percent of U.S. music sales in 2005," Forrester said.
Ping. I'll comment later
I wonder where everyone is getting the free music from all of a sudden?
I'm just pacing myself.
A lot of people are getting smart and don't want to pay for music online anymore!
Looks like people are figuring out about mytunes...
I can sign in the shower... much cheaper than downloading iTunes.
and it's quieter. :^)
You're deaf and you sign to yourself in the shower?
Well, at least it doesn't disturb anyone else.
Not just that, but they don't want to pay for music that is married to their iPod's and iTunes. People are finally starting to realize that the music they buy from Apple is very limited in where you can use it. I'd guess that has at least some significant impact on iTunes decline this year.
Oh, you're deaf?........
He CALLS it signing.......
I purchased some music from ITunes, but have converted more from albums I already own. Most online music stores have a rather poor selection in what I want (jazz, swing, standards) so my buying music in the past several months has fallen off considerably.
Also, I wonder how much their going to court for supposed licensing violations has cooled the sales?
He probably signs off-pitch.
"I wonder where everyone is getting the free music from all of a sudden? "
You should see my Master Card bill. I gave my kid permission to purchase itunes @.99 a song. He owes me $70 this month. When you find out where they're getting the free music let me know! I'm going broke! ;0)
That could be dangerous! He might slip and break his wrist!......
If someone flushes the toilet do you scream your hands off?
Zune!!!!
That's really not the case. One can burn a CD from iTunes or convert to another format, say MP-3 or WAV, using another application specifically for that.
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