Since Apple
launched its iTunes music download services back in April 2003, their sales
continued to rapidly rise month after month, which in turn lead to a massive
increase in legal music downloads. In the first half of this year, 155
million tracks have been sold between music download services, more than the 141
million tracks sold throughout 2004. Apple's iTunes sales alone were so
strong that they accounted for an average of 5% of label revenue.
However, from about May on, music download sales have come close to flattening out. In May, an average of 6.4 million downloads were being sold a week, however this only increased to an average of 6.6 million a week throughout the third quarter. At present, the IDC estimates that there are 11.5 million users making use of pay-per-down services, while a further 3.4 million users use subscription based services.
The main
event that took place around that time of the legal music
download slowdown was around the time of the Supreme Court ruling that
the companies behind P2P software could be held liable for their actions back in June. Worse
still, the RIAA sent
cease and desist letters to companies behind seven P2P file sharing services back in September, which led to BearShare and i2hub going down and iMesh deciding to convert to a legal service.
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Digital downloads got off to a strong start in 2005. More than 155 million tracks were downloaded in the first half of the year, quickly surpassing the 141 million tracks downloaded during all of 2004. According to research firm NPD Group, Apple Computer's iTunes Music Store now sells more music than retailers Tower Records or Borders Books & Music. Digital revenue overall, including ringtones sales and subscription services, now accounts for 5% of label revenue on average, double that of last year. But as the year wore on, the growth of downloads began to slow. In May, about 6.4 million downloads were selling per week; average weekly downloads for the third quarter were only up to 6.6 million, according to Nielsen SoundScan. |
It seems like that as the music industry is getting more aggressive at trying to shut down file sharing services that allow users to share and download music, legal download services seem to be suffering as a knock on also. On the other hand, it could be that the iTunes service has finally reached its peak. As a result of the overall legal music download slowdown, it will be interesting to see how iTunes continues from this point. Then again, iTunes has been such a major success that Apple should be happy with how well they have been up until now.
Feel free to discuss about music download services and file sharing networks on our Music Download, Peer to Peer (P2P) & Legal Issues forum.
Source: Leading the Charge
