“Analyst Horace Dediu estimates the average iTunes account generates $12 in music sales,” Glenn Peoples reports for Billboard. “The chart published on Dediu’s blog makes clear music spending has consistently fallen over the last six years. As Apple has added more iTunes accounts, average annual music spend fell from $42 in 2008 to $20 in 2010 to $12.”
“The median annual music spend is probably higher than $12. If one assumes not every iTunes account has purchases music — a reasonable assumption — then some of the 575 million iTunes accounts represent no spending at all. So, accounts that are buying music are spending more than $12 a year. The fact that some family members share accounts means the average spend per person is less than $12 a year,” Peoples reports. “The total spending per iTunes account is $43 per year across all media, says Dediu. At 575 million iTunes accounts, that works out to $24.7 billion of consumer spending at iTunes per year.”
Peoples reports, “Tunes accounts for a large portion all of global spending on digital music. At the $12 per account estimated by Dediu, the 575 million iTunes accounts result in $6.9 billion of annual consumer spending on music. That number is roughly three-fourths of global consumer spending on digital music in 2012.”
Read more in the full article here.
[Attribution: AllThingsD. Thanks to MacDailyNews Reader “Sarah” for the heads up.]
The problem with his analysis is that an iTunes account (or Apple ID) is how Apple has you sync all of your devices, and also App Store purchases, which are not counted as music purchases. So many, many people have gotten iTunes accounts but don’t purchase music via iTunes because they use the iTunes account for other purposes.
Absolutely this suddenly occurred to me. Fact is years ago an iTunes account was only for buying music whereas now it overs lost any financial and otherwise online link to Apple and its services and products. So such comparisons are increasingly misleading and comparing changes over time and totally misleading if used to try to gauge individual users increase/decrease in their purchases of music.
Music industry continues to hope that people would in fact switch to the subscription model. They have to; such model could bring $80 – $120 per year from a consumer who currently barely spends $12 on music.
Unfortunately, it won’t happen. People spend $12 on music because in any given year, that is precisely how much music there is that they are willing to spend on (equivalent of 10 – 12 songs). Now, if there are only about a dozen or so good songs that they are ready to buy, it would make absolutely no sense to spend almost ten times as much for some monthly subscription, which would require one to give up an entire collection of music if one were to cancel the subscription.
As an experienced professional musician, I hate to say it but only with better quality of music is there a chance that music will sell better. Bundling model (the artificial “Album” construct) is now gone forever, and the days of the single are now back. People are never going to go back to buying a $15 CD because they like two tracks. They are now spending exactly $2 on those two tracks, and record companies must re-tool their business model for this new old reality — the single.
For me, personally, I buy alot of music from itunes, closer to $100.00 and by the time I add in app purchases, it could be double that. Some games, you can purchase additional coins, gold, etc. I do buy that stuff also. Let’s just say I’m in the over 40 year old group. I have friends who also buy music and apps, much more than you think they do…
I’ve bought far more singles in one year on iTunes than I have when buying CDs with tracks I never listen to in the 5 years before iTunes.
It’s convenient and fast and I buy more totals than when I passed on buying a CD because I only liked two tracks.
I used to buy a lot of music but stopped when they raised their price.
I balked at the price increase at first until I learned the slightly higher priced tracks had no DRM.
In the 1960’s we paid .99 for a Beatles 45 record with two songs on it. Paying $3.18 for those same two songs doesn’t seem like much of a stretch in 50 years.
I like it. I also like how just about every old albums and songs I purchased years ago converted to higher bit rate with iTunes Match. Just two Albums are no longer available on iTunes. So its stuck in 128 AAC.
that’s just an incredible achievement.
yet all my clients want to grab their ankles and take it in the ass for amazon and google play – it is like they literally had shit for brains and hoped to chase dragons… lord help the lost and stupid, they’d face a better life betting on heron.
Meh, YouTube.