“If you still think of online sales as a business on the fringe of the music industry, take another look. Digital downloads have become a force in the music world. As evidence, Apple’s iTunes Music Store today crossed the marketing landmark made famous by McDonald’s hamburgers: ‘More than 1 billion sold.’ And that means more than just bragging rights. Although digital song downloads are expected to account for only 6 percent of recorded music sales this year, that’s up from zero three years ago, Piper Jaffray analyst Gene Munster said,” Steve Alexander writes for The Minneapolis Star Tribune. “‘Twenty-five percent of worldwide industry sales will be made online,’ he said. In the United States, as much as half of all recorded music sales will be digital downloads a decade from now, Munster predicted.”
“Hitting the 1 billion mark also indicates that Apple’s iTunes Music Store will remain the undisputed world leader in online music marketing this year, with a projected 85 percent share of worldwide sales of individual songs online, [Munster] said,” Alexander writes. “Apple’s dominant position with iTunes is a direct result of its commanding lead in sales of digital music players, Munster said. The iTunes software is the way most consumers load music into Apple’s iPod music player. The iPod accounted for 78 percent of U.S. unit sales of digital music players last year, and about half of world unit sales, he said… When revenue from individual song sales are combined with subscription revenue, Apple’s worldwide market share of all digital music was 64 percent in 2005, and it is projected to grow to 70 percent this year, Munster said. Apple’s nearest online music competitors, RealNetworks and Napster, collectively have about 10 percent of total online music revenue, he said. Other companies that had been expected to do well in the online music business, Wal-Mart and Sony, have gained little market share, Munster noted.”
Full article here.
MacDailyNews Take: Let’s take a stroll down memory lane in our specially-selected related articles below. We’ll focus on a truncated look back at Microsoft as the representative of the also-ran failures because listing all of the iPod and iTunes “killers” would take up too much space.
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Related articles:
Enderle: Microsoft’s ‘PlaysForSure’ going to be a long-term problem for Apple – January 09, 2006
Microsoft, MTV target Apple’s iTunes Music Store leftovers – December 15, 2005
Analyst: Unlike Microsoft, Apple has the advantage by not licensing their technology – October 13, 2005
Analyst: Real and Microsoft deal ‘doesn’t change the dynamics for Apple in any way, shape or form’ – October 12, 2005
Microsoft’s Bill Gates’ prediction of Apple iPod market share decline fails to materialize – September 18, 2005
Apple’s vs. Microsoft’s music DRM: whose solution supports more users? – August 17, 2005
Microsoft executives acknowledge Apple’s ‘iPod Halo Effect’ – July 29, 2005
Microsoft’s Gates ‘not amused’ about Apple’s digital media supremacy, courts Hollywood allies – July 19, 2005
Microsoft dismisses threat of Apple’s ‘iPod Halo Effect’ – April 04, 2005
Microsoft management frustrated as 80 percent of MS workers with music players have Apple iPods – February 02, 2005
BusinessWeek writer: Microsoft will eventually dominate online music which ‘may be the best outcome – November 08, 2004
Guardian writer thinks Apple must open iPod or Microsoft will eventually own market – October 21, 2004
Microsoft attempts to isolate Apple with ‘PlaysForSure’ logo plan – October 19, 2004
Microsoft debuts ‘PlaysForSure’ logo to signify incompatiblity with Apple iPod, iTunes Music Store – October 15, 2004
Microsoft CEO Ballmer: ‘Apple iPod users are music thieves’ – October 04, 2004
WinInfo’s Thurrott: Apple acting ‘petty’ by not allowing Microsoft to sell music for iPod – September 03, 2004
ZDNet Editor: Apple will lose, Microsoft will win music wars – September 01, 2004
Is Gates’ Microsoft about to declare war on Apple’s iTunes, iPod? – July 25, 2004
Microsoft to release new Windows Media Player in attempt to match Apple’s iPod/iTunes synergy – June 02, 2004
Microsoft: we’ll sell music players that will ‘look and feel’ as good as Apple iPod for 80% less – May 27, 2004
Napster, others agree to use new Microsoft DRM media software, subscription music on portables – May 01, 2004
Columnist: Apple’s smug faithful will not prevail, Microsoft ‘good enough’ for the rest of us – April 16, 2004
Microsoft poised to release ‘iPod killer,’ enlists Creative, iRiver, Napster, others – March 17, 2004
Apple’s iPod mini sold out in many locations; Analyst: Microsoft could threaten iPod – March 01, 2004
Microsoft tries to push WMA by propping up beleaguered Napster – February 25, 2004
Microsoft’s plan to unseat Apple’s iPod juggernaut – February 10, 2004
Microsoft unhappy with HP, Apple music pact; says deal will ‘limit choice’ – January 13, 2004
Microsoft ponders iTunes Music Store-like service – July 28, 2003
Microsoft – AOL alliance might pose threat to AAC – May 30, 2003
Microsoft preparing counterattack against Apple’s iTunes Music Store – May 23, 2003
Competitors (including Microsoft) line up to knock off Apple’s iTunes Music Store – May 09, 2003
Simply put, “Apple rules.”
Come on, MDN. Don’t skimp. Bits and bytes are cheap these days. We want to see the whole list of runners up, also rans, wannabes, failures, and soon-to-be failures, ad nauseum. It would also be a little icing on the cake if we could get Microsoft’s position on the bottom 9 of the Top 10 onliine music stores.
It’s just plain fun, isn’t it?
Tera Patricks
TeraTalks
i thought that stories like this were for ipoddialynews. that had zero mac news in it. if this were the apple daily news website, that would be one thing… but it isn’t. Let’s try to stick to macintosh related stories.
All I can say is 1 billion songs in and it has been a multiplatform (OSX and Windows) for less than 3 years. It has only been open since 2002.
I would LOVE to be a fly on the wall when the Music Companies try to renogiate their deal with Apple.
MDN Magic Word: Hard
It is going to be hard (read nearly impossible) for anyone to come after the iPod or iTMS.
The article read…
Munster said. “Over the next 10 years, the retail music industry will be turned upside down.”
I’ve said it before, Apple’s approach will wield the same sword upon the motion-picture industry as well (lets see what is unveiled later today). Traditional Hollywood distribution has something to worry about, and I don’t think it has anything to do with (Apple purchasing) Blockbuster.
MW:cold, as in …
“Its cold down here, can someone turn up the heat!”
Satin
AKA
Satan
MW: face, as in…
You trying to save face?
“All I can say is 1 billion songs in and it has been a multiplatform (OSX and Windows) for less than 3 years. It has only been open since 2002.”
Actually, the iTMS opened in (April) 2003.
Microsoft’s current market share dominance has been attributed to the failure of Apple to provide an economical and functional alternative during the era when personal computing was becoming popular. Whereas, Microsoft’s dominance originated from the lack of a real competitor, Apple’s resurgence developed from innovation and vision. Apple has trumped Microsoft and others with iTunes and, possibly, iVideo. I suppose that this only illustrates how Microsoft is more an accident of events than a true example of technological superiority.
Tera Patricks?
Is this the same Tera Patricks that I’m thinking of? You know… that one.
Super Tim: you don’t think that stories about the iTMS qualify as Mac-related? I do.
ZDNet Editor: Apple will lose, Microsoft will win music wars – September 01, 2004
Yet again ZDNet demonstrate what they do BEST: get it wrong. It’s what I now call an ‘Enderlism’.
Me thinks that Apple is now the Master of FUD as what MS et al must be feeling now.
I would love to see the recording companies finally get a clue and drop their demands on DRM. You want less dominance by Apple? There’s your answer. Remove the DRM and all of a sudden you’ve got a level playing field. Online music stores will compete. I can then buy from where I want and play it on what I want.
Now for those of you who insist that Apple really doesn’t want DRM, I say BS. I have heard from someone who tried to get his band’s music on iTunes that Apple would NOT sell their music without the DRM. Now I know that the music on the store doesn’t contain the DRM, its actually put in their when its downloaded to iTunes. So iTunes is whats adding the DRM. But if Apple really had no interest in DRM, they would have put a flag in the song that said whether or not to add the DRM.
Apple has done something far more important than just sell a lot of content or iPods…. they’ve created a new whole new vehicle for content to be delivered and it’s not HD-DVD or BluRay.
Apples DRM system is flexible enough for consumers to be willing to buy content “On-Demand”, it’s portable enough to be fun, cheap enough to buy in quantity, good enough to be worth spending the money and it’s SECURE enough for content providers to finally feel comfortable in allowing the revolution to begin.
Viva the Revolution!
“Our best guess, is that for every legal song download there are 75 illegal downloads,” …..
But who does the RIAA and MPAA screw with DRM ??
The ONE in 75
They must be using this NEW MATH that I hear about
“Now for those of you who insist that Apple really doesn’t want DRM, I say BS. I have heard from someone who tried to get his band’s music on iTunes that Apple would NOT sell their music without the DRM.”
Of course Apple needs DRM for iTMS. First, by all accounts, iTMS runs on slim margins. They have to be efficient, so they aren’t going add another level of effort into the process by creating two classes of songs: those with and without DRM. Everyone is treated the same; all songs go through the same process built into the infrastructure.
Secondly, Why would any digital file purveyor go to the expense of setting up a space in the store for a band and its music when the first download could be used to propagate a billion copies on P2P networks within days? Like any store, iTMS needs people to actually buy merchandise to survive. Once again, it is the obvious reality of illegal duplication and piracy that is the root of DRM issues, not a single player in this game such as Apple.
DRM exists for the same reason we have locks on our doors: because there exists a small percentage of the populace that can’t resist taking things that don’t belong to them, or otherwise resent an ownership society. We all have gotten used to carrying key rings to secure our homes, apts, cars, etc. DRM is no different. Get used to it. But at the same time, fight to retain our fair use rights!