Apple’s iTunes used to be one of the biggest deals in digital. Prior to streaming music apps and services, we were left to purchase music the traditional route, buying singles or albums via iTunes, which did little more than un-clutter our offices from towers of CDs. Over time, the Spotify, Pandora, and Play Music All Access’ of the world have eaten into iTunes’ business model, as we more toward a monthly fee and unlimited streaming. A new report suggests Appel is feeling the pinch, and iTunes sales have dropped dramatically.
Sources familiar with the matter, and speaking to The Washington Journal, say iTunes sales have dropped off 13-14% world-wide. A contrast to that point is digital downloads in 2013, where global revenue was down a mere 2.1%.
Further contrasting this divide is overall music sales, which have held steady over the last year or so.
There is a saving grace for Apple, though. It’s something we all speculated they could/would do with iTunes, and quietly hope for.
They need Beats.
If these numbers are accurate, iTunes sales are outpacing the slow, downward spiral music sales have been experiencing the past few years. Streaming services are supplanting sales, and Apple owns a streaming service in Beats Music. Those sources, speaking with WSJ also note that Apple may be planning to fold Beats in with iTunes somehow.
I’ve said it before, and I’ll say it again: Apple is very late to streaming, but a Beats app with access to the iTunes library would immediately knock all other services down a peg. Apple has already suggested Beats would get a refresh, and we’ve heard rumblings that Apple is trying to work with record labels on their royalty requirements for streaming music.
Many rumors point to a February launch of a new Beats Music subscription service, which is about the time we are expecting more details on the Apple Watch. IF the new Beats has iTunes’ library in tow, look for mass adoption and a return to the profitability Apple expects from iTunes.
Source: The Wall Street Journal