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Apple's iTunes accounts for 75% of global digital music market, worth $6.9B a year

post #1 of 29
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After Apple published numbers for iTunes TV show and music downloads on Wednesday, Asymco's Horace Dediu broke down the stats to reveal the online storefront rakes in some $6.9 billion each year, or roughly 75 percent of all digital music sales.

iTunes
Source: Asymco


According to Dediu, the average iTunes account holder spends about $12 per year on music, reports Billboard (via AllThingsD), and with 575 million active users, Apple's annual revenue hits $6.9 billion.

The publication notes that the IFPI set the trade value of the global digital music market in 2012 at $6.9 billion, which is about 35 percent of the $16.5 billion for all recorded music. To extrapolate consumer spending, Billboard assumes labels net 60 percent of the retail price, resulting in a digital market worth $9.3 billion.

That means Apple's $6.9 billion account for about 75 percent of the $9.3 billion global digital music market. The remaining slice of the pie is divvied up to streaming music services like Pandora and retailers like Amazon.

Apple, however, recently announced its own Internet radio streamer in iTunes Radio, an ad-supported service that has built-in links to purchase songs directly from the iTunes store. As the feature has yet to roll out to the public, it remains to be seen whether Apple's system will be competitive with already established apps.
post #2 of 29
Seems like only yesterday that all the Apple-haters were unanimous in saying that iTunes would be a massive failure.......
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post #3 of 29

Now I'm going to have to revise my trolling. Here I've been bugging the fandroid trolls that iTunes accounts for 2/3 of digitial sales. Now it's reported to be at 3/4. It just keeps getting better (or worse, depending which ecosystem you belong to).

 

All those gazillion Android users and they aren't being monetized. At all.

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post #4 of 29
Quote:
Originally Posted by EricTheHalfBee View Post

Now I'm going to have to revise my trolling. Here I've been bugging the fandroid trolls that iTunes accounts for 2/3 of digitial sales. Now it's reported to be at 3/4. It just keeps getting better (or worse, depending which ecosystem you belong to).

 

All those gazillion Android users and they aren't being monetized. At all.

I'm sure many of them are purchasing via iTunes on PC or Mac and then loading it on their Android device :)

 

EDIT: Wait I forgot this ... /s

post #5 of 29
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Originally Posted by jragosta View Post

Seems like only yesterday that all the Apple-haters were unanimous in saying that iTunes would be a massive failure.......

 

Yesterday? Five minutes ago they were still flogging on about how iTunes is useless bloatware and how they buy all their music from Amazon, and how Pandora is the way to go, and how Rhapsody is killing iTunes, and how nobody they know is using iTunes anymore because it is obsolete and passé. 

post #6 of 29

I'm thinking Amazon must make up a good chunk of what's left. This would mean the Microsoft Marketplace is sucking air...again.

 

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post #7 of 29

This proves yet again that certain analysts and other clueless people put way too much stock and importance into non Apple activation numbers.

 

What does it matter how many supposed Android activations there are, when the combined user base has the total purchasing power of a handful of bums? People on other platforms are not doing much or purchasing a lot with their devices, and this has been proven time and time again.

 

There are about 50 quadrillion ants on planet earth, that's 50,000,000,000,000,000. The total amount of Android users is of no importance, and they are about as significant as those ants. Who cares about Android or what some people with no money are doing on other platforms?

 

Apple has the premiere eco system on the entire planet, and nobody else even comes close.

post #8 of 29
How exactl does Dediu arrive at his figures? Is he doing estimates similar to other firms out there?
post #9 of 29
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Originally Posted by Rogifan View Post

How exactl does Dediu arrive at his figures? Is he doing estimates similar to other firms out there?

What part of "Apple's $6.9 billion account for about 75 percent of the $9.3 billion global digital music market" didn't you understand? Now if you're questioning the numbers that's a different story but the math is correct.
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post #10 of 29
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Originally Posted by jragosta View Post

Seems like only yesterday that all the Apple-haters were unanimous in saying that iTunes would be a massive failure.......

Those are monopolistic numbers and they'll increase prices like all monopolies do according to you.
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post #11 of 29
Both the math and the numbers are wrong! The graph shows that music makes up less than a third of the overall iTunes revenue - apps take the most. Also 6.9 is not 60% of 9.3. Poor article all round. Looks more like Apple takes 15% - 20% of the digital music market!!
post #12 of 29
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Originally Posted by dasanman69 View Post

Those are monopolistic numbers and they'll increase prices like all monopolies do according to you.

I never said any such thing.

I said that there's the POTENTIAL for companies to abuse monopoly power. I never said that they all do.

And given Amazon's behavior, it's clear that they would. They did everything possible to scare the publishers away from Apple - as shown during the trial.
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post #13 of 29
Quote:
Originally Posted by dasanman69 View Post

Those are monopolistic numbers and they'll increase prices like all monopolies do according to you.

Except for the fact that iTunes uses the agency model that Apple also wanted to use with iBooks. Apple just gets their 30% cut. As you know Amazon was using a wholesale model and predatory pricing to have a monopoly of thee-book market. So..apples and oranges...
post #14 of 29
Quote:
Originally Posted by dirtymonkey View Post

Both the math and the numbers are wrong! The graph shows that music makes up less than a third of the overall iTunes revenue - apps take the most. Also 6.9 is not 60% of 9.3. Poor article all round. Looks more like Apple takes 15% - 20% of the digital music market!!

 

Just buy the damn report and then comment: http://www.ifpi.org/content/section_resources/rin/rin.html

post #15 of 29
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Originally Posted by GregInPrague View Post

Except for the fact that iTunes uses the agency model that Apple also wanted to use with iBooks. Apple just gets their 30% cut. As you know Amazon was using a wholesale model and predatory pricing to have a monopoly of thee-book market. So..apples and oranges...

They've never publicly admitted that they use the agency model for music.
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post #16 of 29
Quote:
Originally Posted by jragosta View Post

I never said any such thing.

I said that there's the POTENTIAL for companies to abuse monopoly power. I never said that they all do.

And given Amazon's behavior, it's clear that they would. They did everything possible to scare the publishers away from Apple - as shown during the trial.

Now you're back tracking to support your position. I've argued this very point with you time and time again.
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post #17 of 29
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Originally Posted by dasanman69 View Post

Now you're back tracking to support your position. I've argued this very point with you time and time again.

No one's backtracking. I never said that EVERY monopolist abuses their monopoly power. You just can't stand the fact that I won't let you get away with your silly red herring arguments.
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post #18 of 29
Quote:
Originally Posted by dasanman69 View Post

They've never publicly admitted that they use the agency model for music.

It's not really an agency model. The studios have no direct say on price per track, other than what tier a song falls into. Otherwise it is a negotiated tiered pricing across the board. But it's not a wholesale model either.
post #19 of 29
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Originally Posted by jragosta View Post

You just can't stand the fact that I won't let you get away with your silly red herring arguments.

I'm sensing a trend with him.

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post #20 of 29
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Originally Posted by Pendergast View Post

It's not really an agency model. The studios have no direct say on price per track, other than what tier a song falls into. Otherwise it is a negotiated tiered pricing across the board. But it's not a wholesale model either.

So Apple could theoretically raise prices with their market position power?
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post #21 of 29
Quote:
Originally Posted by jragosta View Post

No one's backtracking. I never said that EVERY monopolist abuses their monopoly power. You just can't stand the fact that I won't let you get away with your silly red herring arguments.

But you have said that historically monopolies have raised prices and there's nothing to suggest that Amazon wouldn't follow that path.
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post #22 of 29
Quote:
Originally Posted by dasanman69 View Post

So Apple could theoretically raise prices with their market position power?

Well, it would have to be negotiated with the studios. Last time it was raised was to go higher quality with DRM-free. I'm guessing any further raise would invite scrutiny.
post #23 of 29
Quote:
Originally Posted by Pendergast View Post

Well, it would have to be negotiated with the studios. Last time it was raised was to go higher quality with DRM-free. I'm guessing any further raise would invite scrutiny.

The "either you let us raise prices or sell your songs elsewhere" type of negotiations?
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post #24 of 29
Quote:
Originally Posted by EricTheHalfBee View Post

Now I'm going to have to revise my trolling. Here I've been bugging the fandroid trolls that iTunes accounts for 2/3 of digitial sales. Now it's reported to be at 3/4. It just keeps getting better (or worse, depending which ecosystem you belong to).

All those gazillion Android users and they aren't being monetized. At all.

Right ... but I doubt most so called Android users even exist. It's hard to monetize a device sitting in the inventory of manufacturers shipping crates ... Assuming that's even true!
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post #25 of 29
Quote:
Originally Posted by dasanman69 View Post

The "either you let us raise prices or sell your songs elsewhere" type of negotiations?

It's possible. But that would be a complete reversal. Historically, it's been the studios who want to raise prices.

I don't know if any huge move would cause scrutiny; it would be more likely if they had 90% or more share.
post #26 of 29
Quote:
Originally Posted by Pendergast View Post

It's possible. But that would be a complete reversal. Historically, it's been the studios who want to raise prices.

I don't know if any huge move would cause scrutiny; it would be more likely if they had 90% or more share.

Thanks you've been very helpful. I don't believe at all that Apple would do such a thing but it's nice for someone else to agree that it is possible.
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post #27 of 29
Quote:
Originally Posted by dasanman69 View Post

Thanks you've been very helpful. I don't believe at all that Apple would do such a thing but it's nice for someone else to agree that it is possible.

No problem.

Personally, I'd be more worried about a company like Amazon having a monopoly. With Apple, you know where they make their money. Amazon? Wall Street has been banking for years that Amazon will finally capitalize on their market share.
post #28 of 29
Quote:
Originally Posted by dirtymonkey View Post

Both the math and the numbers are wrong! The graph shows that music makes up less than a third of the overall iTunes revenue - apps take the most. Also 6.9 is not 60% of 9.3. Poor article all round. Looks more like Apple takes 15% - 20% of the digital music market!!


It's probably better if you actually try to read the chart correctly and not make stupid comments.

Each bar is a quarter (see bottom axis). Each quarter, iTunes seems to make about $1.6-1.7Bn on music alone, which (amazingly) adds up to $6.9Bn for 2012.

 

Oh, comprehension... it's not overrated...

post #29 of 29
I'm still a big fan of streaming music, my children use Pandora and I like Groove Shark. Buying music from iTunes got to be an expensive commodity with a teenager in the house. I think Apple Radio is the way of the future, especially for parents.
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