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

Posted:
in iPod + iTunes + AppleTV edited January 2014
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.
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Comments

  • Reply 1 of 28
    jragostajragosta Posts: 10,473member
    Seems like only yesterday that all the Apple-haters were unanimous in saying that iTunes would be a massive failure.......
  • Reply 2 of 28


    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.

  • Reply 3 of 28

    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

  • Reply 4 of 28
    lkrupplkrupp Posts: 6,682member

    Quote:

    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. 

  • Reply 5 of 28


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


     


    Chairs were broken, monkeys danced and a VP was sacrificed.

  • Reply 6 of 28
    apple ][apple ][ Posts: 8,360member


    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.

  • Reply 7 of 28
    rogifanrogifan Posts: 10,669member
    How exactl does Dediu arrive at his figures? Is he doing estimates similar to other firms out there?
  • Reply 8 of 28
    dasanman69dasanman69 Posts: 12,973member
    rogifan wrote: »
    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.
  • Reply 9 of 28
    dasanman69dasanman69 Posts: 12,973member
    jragosta wrote: »
    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.
  • Reply 10 of 28
    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!!
  • Reply 11 of 28
    jragostajragosta Posts: 10,473member
    dasanman69 wrote: »
    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.
  • Reply 12 of 28
    dasanman69 wrote: »
    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...
  • Reply 13 of 28
    mdriftmeyermdriftmeyer Posts: 7,211member

    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

  • Reply 14 of 28
    dasanman69dasanman69 Posts: 12,973member
    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.
  • Reply 15 of 28
    dasanman69dasanman69 Posts: 12,973member
    jragosta wrote: »
    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.
  • Reply 16 of 28
    jragostajragosta Posts: 10,473member
    dasanman69 wrote: »
    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.
  • Reply 17 of 28
    pendergastpendergast Posts: 1,358member
    dasanman69 wrote: »
    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.
  • Reply 18 of 28
    tallest skiltallest skil Posts: 43,399member
    jragosta wrote: »
    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.
  • Reply 19 of 28
    dasanman69dasanman69 Posts: 12,973member
    pendergast wrote: »
    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?
  • Reply 20 of 28
    dasanman69dasanman69 Posts: 12,973member
    jragosta wrote: »
    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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