iTunes interest climbs as one analyst claims falling sales

“Two separate reports offer contrasting opinion on the health of the digital music market,” Jonny Evans reports for Macworld UK.

“Forrester Resarch analyst, Josh Bernoff has revealed figures that claim Apple sells 20 songs through iTunes for each iPod sold. He makes the assumption that this figure — which has remained relatively static historically — represents all legitimate music consumption by iPod users,” Evans reports. “Meanwhile, Akamai has published a global glance at the traffic levels across 40 digital music stores, including iTunes.”

“The Forrester figures aren’t based on actual sales, but on information Bernoff has been able to estimate that is based on credit card records,” Evans reports. “Over the past 12 months, 3.2 per cent of US households with internet access have purchased songs through iTunes, but only about $17 worth, his report claims. He also says the number of iTunes sales has slipped 58 per cent since January 2006.”

Evans reports, “Akamai’s report deals with known levels of activity on music websites. These contrasting results indicate that interest in digital music services continues to grow.”

“Akamai also conducted a survey of online consumers to better understand their digital music habits. Respondents ranged in age from 19 to 68 with a survey base of 200 people, 58 per cent female and 41 per cent male,” Evans reports. “The survey showed that 86 per cent of respondents own a portable music device and 76 per cent spend $1-$5 on music downloads every week. 82 per cent of music lovers prefer a download-to-own service to anything else, and 42 per cent of customers are loyal to one digital music service.”

Full article here.

Related articles:
Akamai Net Usage Index for Digital Music measures real-time global consumption of online music – December 11, 2006
WSJ mistake: ‘digital-music sales have stalled for the first time since Apple launched iTunes Store’ – December 06, 2006
Digital downloads drive world music sales in first half of 2006 – October 13, 2006
Study reports the obvious: most music on iPods not from iTunes Store – September 17, 2006
Apple iTunes Gift Cards help boost growth of digital music in U.S. – April 21, 2006

34 Comments

  1. As I keep saying, “There are lies and then there are statistics.”

    These various analyses can be made to support whatever is needed to be supported.

    Talk about twisting figures, only 3.2% of all households!! How many of those have an iPod? What type of internet access do they have? (try downloading with dial-up, I have.) Geez. More anti Apple FUD.

    I guess this is a good thing, I was getting tired of only hearing good news.

  2. My take is you are foolish to use a credit card to buy songs. Credit card companies charge you interest on the loan to buy a song (unless you pay it off monthly).

    The only way to go is to use an iTunes card. You pay cash at Target or where ever and use it.

  3. “…survey base of 200 people, 58 per cent female and 41 per cent male,”

    That give us a total of 116 females and 82 males. I wonder what the other two are.

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  4. MikeR:
    Wow – why wouldn’t you pay off your credit card each month? Did you calculate frequent flyer miles or other incentives? Did you consider the ‘cost of money’? You know, the loan you are giving to Target! What about the risk of losing the card or having someone steal the data (saw the story recently)? Maybe you could have left the money in a bank account drawing interest until the moment you wanted to make the purchase. Mike, you should consider taking some basic finance courses.

  5. Obviously, there is no way to measure this. I have over 350 songs that I have purhcased over the past 3 years. Some with Gift Cards, but most with a credit card. My nephews have at least 100 songs each, mostly through gift cards. The teens are mostly purchasing their music through gift cards.

  6. Obviously, the analyst makes an error by only using credit card purchases.

    However, if Bernoff’s data is specifically about iTunes, the Akamai data that Evans cites does not refute those claims. Unless I missed something, the Akamai data does not break down download traffic by store (note: Akamai does the streaming & downloads of many music stores, including iTS). It is possible, though doubtful, that iTS traffic is dropping even though overall legal downloads are increasing. Understand, it is not that I think Bernoff’s analysis is correct, but that Evans needs to have actual data for iTS to argue Bernoff’s conclusions.

  7. TommyBoy – I agree with you. Use credit cards wisely and you never have to pay a dime in interest.

    FWIW I rarely buy from iTS. Main reason is the bit rate. Also buying CDs can be cheaper than buying an album on line if you know where to look.

    However I do get the coolness of only buying songs that you like which I do occasionally.

    This is still a developing industry and it’s good that Apple have the lead.

    When Apple announce the 2B song sale then we will really know what the sales rate is.

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