Digital music grows $363M in 2009, iTunes a quarter of all U.S. sales

Posted:
in iPod + iTunes + AppleTV edited January 2014
Though overall music sales declined $1.3 billion in 2009, digital downloads grew $363 million to $4.3 billion, with Apple's iTunes representing more than a quarter of total digital and retail U.S. sales.



The figures come from the recently released Recording Industry in Numbers report from the International Federation of the Phonographic Industry. As reported by paidcontent.co.uk, global digital music sales grew 9.2 percent in 2009, and now make up over a quarter of total music income. This as the worldwide market decreased by 7.2 percent to $17 billion.



Digital sales, however, were relatively stagnant in the U.S., with just 1.1 percent year-over-year growth in 2009. Domestically, Apple's iTunes represents more than a quarter of all music sales, both digital and retail.



Apple's rise to the top has been quick: iTunes first cracked the top 10 music retailers in 2005, and ousted Walmart for the No. 1 position in 2008.



Because of Apple's dominant market presence, the report suggested that improvements to record sales in the U.S. must come from the iPod maker.



"The industry must hope Apple innovation can provide it with another shot in the arm," author Robert Andrews wrote. "iTunes Store boosted sales after its launch in 2003 - so maybe a subscription iTunes offering can do it again."







Together, the U.S. and Japan -- the two biggest markets for the music industry -- were responsible for 80 percent of the sales loss in 2009. With Japan and the U.S. taken out of the equation, global music sales would have fallen just 3.2 percent.



The report from the IFPI noted that piracy is still one of the music industry's "biggest obstacles," noting that growth can return for the first time in over a decade if local governments can "deal" with piracy. The record industry has seen its sales decrease every year since 1999.







The IFPI numbers correspond with data released last summer that said Apple's iTunes had a 25 percent market share of all U.S. music downloads. That was well ahead of the number two overall music seller at the time, Walmart, which took 14 percent.



Last year's NPD totals also pegged Apple as the largest online music seller, taking a whopping 69 percent of the total market. The next closest seller was Amazon, with 8 percent of all paid downloads.



As for the potential of an iTunes subscription plan, it has been rumored for years, but never become a reality. Apple's purchase of streaming music service Lala for $85 million in late 2009 has led to speculation that iTunes content and purchases could be moved to the cloud, allowing users to access their content from a range of devices or via a Web browser without running the iTunes desktop client.
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Comments

  • Reply 1 of 25
    palegolaspalegolas Posts: 1,273member
    What does that "Perf. Rights" mean in the lists?

    Is it sales to radios and spotify and the likes?

    By the way.. is Spotify and web radios represented in the digital collumn in some way?



    Somewhat related:

    I feel like Spotify is a gray zone here.. swallows a huge ammount of music - with just peanuts for the artists. If Apple launches a "subscription" feature, I really hope they create a new model that is great for the artists. I can feel the pain listening to a whole album using Spotify knowing that the artist is kind of left in the blue(s).
  • Reply 2 of 25
    Of course, no need to mention the 30% iTunes price hike in North America... There's no reason for that to have a negative effect on music sales.



    And a year in, we see the lie the music labels said about pricing, where they said some at $0.69, some at $1.29, most at $0.99. In reality, it's a split between $1.29 and $0.99 [as it's hard to determine how many songs at each price level, but pretty much all new music is $1.29], with $0.69 songs as rare as a hen's tooth.
  • Reply 3 of 25
    davegeedavegee Posts: 2,765member
    Just trying to understand the numbers...



    Apple's iTunes had a 25 percent market share of all U.S. music downloads.

    Walmart, which took 14 percent (#2 seller)



    Apple as the largest online music seller, taking a whopping 69 percent of the total market.

    The next closest seller was Amazon, with 8 percent of all paid downloads.



    What are these actually referring to?
  • Reply 4 of 25
    bedouinbedouin Posts: 331member
    Who the hell buys music on-line from Wal-Mart? I had 5 free downloads from them and couldn't find a damn thing worth hearing.
  • Reply 5 of 25
    Quote:
    Originally Posted by AppleInsider View Post


    "The industry must hope Apple innovation can provide it with another shot in the arm," author Robert Andrews wrote. "iTunes Store boosted sales after its launch in 2003 - so maybe a subscription iTunes offering can do it again."



    That guy really needs to learn how to read his own chart. Music sales have been dropping ever since 2003 despite iTunes. So how exactly has iTunes boosted sales?
  • Reply 6 of 25
    elrothelroth Posts: 1,201member
    Quote:
    Originally Posted by whatisgoingon View Post


    Of course, no need to mention the 30% iTunes price hike in North America... There's no reason for that to have a negative effect on music sales.



    And a year in, we see the lie the music labels said about pricing, where they said some at $0.69, some at $1.29, most at $0.99. In reality, it's a split between $1.29 and $0.99 [as it's hard to determine how many songs at each price level, but pretty much all new music is $1.29], with $0.69 songs as rare as a hen's tooth.



    I think you're overreaching a bit. For the music I search for, probably 90% is still $0.99, with maybe 8% at $1.29 and 2% at $0.69. Maybe that's just me - the stuff I look for is not so popular, and usually not brand new.
  • Reply 7 of 25
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by caliminius View Post


    That guy really needs to learn how to read his own chart. Music sales have been dropping ever since 2003 despite iTunes. So how exactly has iTunes boosted sales?



    I think the implication is that it would have fallen faster without Apple who made online sales a viable option. I think it's a viable suggestion that without a convenient online solution that many more people would have resorted to the also convenient stealing of music.
  • Reply 8 of 25
    elrothelroth Posts: 1,201member
    When you look at physical sales, nowhere are used CDs accounted for. I think that's a pretty big market, especially now with Amazon Marketplace, and all the used CD stores popping up locally.



    Of course, the record companies don't get paid for used CD sales.
  • Reply 9 of 25
    spotonspoton Posts: 645member
    Quote:

    Digital sales, however, were relatively stagnant in the U.S., with just 1.1 percent year-over-year growth in 2009. Domestically, Apple's iTunes represents more than a quarter of all music sales, both digital and retail.





    Yep, I´d say the market is saturated.



    I got all the 8000 songs I will ever need, never hear the same song for months or years sometimes.



    The labels really screwed themselves with the $1.29, .99 and .69 model verses the all songs .99 model like before. It tells people which songs are good and which ones are lousy.



    As more people buy just the $1.29 songs to save money and avoid the others, the ratings get skewed to reflect that, only to reinforce the problem.



    So that results in less people sampling songs in the entire album and deciding for themselves what they like and willing to purchase.



    Would one go see a $10 movie at a theater or the $1 one? Likely the $1 movie totally sucks right? Why else would they charge a $1 for it? Why waste 2 or 3 hours of oneś life watching a sucky movie?



    Dittto.





    Funny, the solution to the problem is to raise all song prices to $1.29. Idiots.
  • Reply 10 of 25
    SpamSandwichSpamSandwich Posts: 30,721member
    Here's a quick way to increase iTunes sales across the board...



    iPod 3G. Same plans as offered on the iPad, no voice service just data. Usage and purchases of music, movies, books and apps would all skyrocket.
  • Reply 11 of 25
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by SpamSandwich View Post


    Here's a quick way to increase iTunes sales across the board...



    iPod 3G. Same plans as offered on the iPad, no voice service just data. Usage and purchases of music, movies, books and apps would all skyrocket.



    I'd drop my iPhone service and buy that sight unseen, assuming we're talking about the Touch.
  • Reply 12 of 25
    tjstjs Posts: 31member
    Quote:
    Originally Posted by solipsism View Post


    I'd drop my iPhone service and buy that sight unseen, assuming we're talking about the Touch.



    I'd be right behind you!
  • Reply 13 of 25
    chronsterchronster Posts: 1,894member
    Quote:
    Originally Posted by SpamSandwich View Post


    Here's a quick way to increase iTunes sales across the board...



    iPod 3G. Same plans as offered on the iPad, no voice service just data. Usage and purchases of music, movies, books and apps would all skyrocket.



    A jailbroken "ipod 3g" could make internet calls and bypass a voice plan (only where 3g service is available of course) so I doubt we'll see such a thing



    Oh and that's of course assuming someone had a mic and stuff lol
  • Reply 14 of 25
    chronsterchronster Posts: 1,894member
    Quote:
    Originally Posted by bedouin View Post


    Who the hell buys music on-line from Wal-Mart? I had 5 free downloads from them and couldn't find a damn thing worth hearing.



    wheels on the bus wasn't good enough for you?
  • Reply 15 of 25
    Quote:
    Originally Posted by SpamSandwich View Post


    Here's a quick way to increase iTunes sales across the board...



    iPod 3G. Same plans as offered on the iPad, no voice service just data. Usage and purchases of music, movies, books and apps would all skyrocket.



    You wouldn't happen to know of a site that has accurate information about the iTunes install base? I keep finding numbers from 125-500 million users.
  • Reply 16 of 25
    SpamSandwichSpamSandwich Posts: 30,721member
    Quote:
    Originally Posted by chronster View Post


    A jailbroken "ipod 3g" could make internet calls and bypass a voice plan (only where 3g service is available of course) so I doubt we'll see such a thing



    Oh and that's of course assuming someone had a mic and stuff lol



    Darn it, in the moment of inspiration I forgot to type out the whole name... iPod touch 3G!



    And as the iPad has been called 'a large iPod touch', this would be essentially 'a small iPad 3G.'
  • Reply 17 of 25
    Quote:
    Originally Posted by SpamSandwich View Post


    Darn it, in the moment of inspiration I forgot to type out the whole name... iPod touch 3G!



    And as the iPad has been called 'a large iPod touch', this would be essentially 'a small iPad 3G.'



    iPad Nano.......lol
  • Reply 18 of 25
    bartfatbartfat Posts: 432member
    Why are music execs jumping to the conclusion that piracy is the problem to growth? Maybe they haven't realized that they just don't produce very much good music nowadays because they've decided to follow the money, instead of just producing good content so that the money will come?
  • Reply 19 of 25
    rob55rob55 Posts: 1,254member
    Well, I'm personally glad to see that physical media still represents 70% of music sales. As much as I like the iTunes store and being able to sample music before buying, I much prefer to rip my own CDs @ 320k VBR. And to cite yet another example, the new MGMT album is $9.99 on iTunes and $9.99 on Amazon for the actual CD. I think this is a clear example that digital music prices are too high. I mean really, why would I want to pay the same price for less quality. Now if the digital version was $2 or $3 less, then maybe we'd have something.
  • Reply 20 of 25
    anonymouseanonymouse Posts: 6,570member
    Quote:
    Originally Posted by bartfat View Post


    Why are music execs jumping to the conclusion that piracy is the problem to growth? Maybe they haven't realized that they just don't produce very much good music nowadays because they've decided to follow the money, instead of just producing good content so that the money will come?



    That way, they don't have to admit to their shareholders that they don't know what they are doing.
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