Apple iTunes Has A Big Drop In Music Sales…is Streaming the Answer?

There has been a huge drop in digital download sales, and Apple has not been exempt from plummeting sales.  In fact, iTunes sales have fallen 13%-14% world-wide since the beginning of the year, and the reason for this steep decline is due to the availability of cheap music from free videos,  low cost streams, and $10/month subscription plans.  It is no mystery why Apple bought Beats Music, the $10/month streaming service, to help boost sales in this category. It has been reported that Beats Music will relaunch as part of iTunes next year.

Although many businesses are hopeful that sales will increase with a move to low cost subscription plans, there is a lot of concern in the industry that download sales will decline faster than streaming sales will grow.  Dave Bakula, Nielsen Entertainment analyst, attributes the decline in downloads primarily to “a shift in the way consumers are consuming music.”

According to the RIAA, streaming services account for nearly one-third of the revenue from recorded music in the U.S.  Spotify is on top of this trend and recently dropped prices for its streaming service to attract more customers.   Streaming may be an answer to declining download sales, but time will tell if this model is sustainable over time.

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