Despite the rise of new competitors, Apple’s dominance of the market for digital songs remains the same. AllThingsD points out that new research from Asymco shows that Apple’s iTunes generates around $6.9 billion in revenue from digital music each year, which is 75% of the $9.3 billion that consumers spend on digital music annually. This means that while music streaming services such as Pandora and Spotify have shown rapid growth recently, they still can’t match the revenue generating powers of the iTunes store. iTunes’ popularity also shows us why Apple was able to successfully play hardball with music labels when negotiating a deal for iTunes Radio — its clout in the digital music realm means that record companies are willing to take less per-song revenue if it means they’ll be exposed to a much wider audience.
Apple revealed earlier this week that its iTunes music store is now home to 575 million users. Horace Dediu of Asymco noted that the company is adding roughly a half-million new accounts on average per day. At its current rate, Apple will add another 100 million iTunes accounts by the end of 2013. The analyst found that while more consumers are using the service, revenue per account has actually decreased over the past few years. He explained that each of the 575 million accounts generates about half as much revenue, or $3.20 per month, as Apple’s 100 million iTunes accounts did in 2009. Dediu doesn’t think Apple is in trouble, however. He notes that customer satisfaction and loyalty is still high, and the number of new customers is increasing at higher rate than the decline in spending.
Apple’s iTunes has long dominated the market for online music purchases and it seems that it holds a similar stranglehold on the market for online movie and TV show purchases as well. New data from the NPD Group shows that iTunes accounts for 65% of all online movie downloads and 67% of all online TV show downloads, putting it significantly ahead of both Amazon Instant Video, which accounts for 10% of movie downloads and 8% of TV show downloads, and Xbox video, which accounts for 10% of movie downloads and 14% of TV show downloads. NPD analyst Russ Crupnick says that iTunes has stayed on top of the online video market because “Apple has successfully leveraged its first-mover advantage and of iTunes, iOS and the popularity of iPhone and iPad” to secure an enduring market advantage.
New licensing agreements with Google Play, Microsoft (MSFT) and other services helped musicians generate more royalties in the U.K. from digital music services than radio for the first time last year, The Guardian reported. Songwriters earned a total of £51.7 million in the U.K. (roughly $77.7 million USD) in digital royalties, an increase of 32.2% from £39.1 million in 2011. Digital music services are now the single biggest source of income for musicians in the U.K., surpassing radio and live events. Online licensing revenues have doubled in the county since the arrival of download and streaming services such as Apple’s (AAPL) iTunes Store and Spotify in 2008.
Apple (AAPL) shares have fallen more than 35% since hitting a record high last September. The tech press has declared that Apple is doomed. On the defensive. Unable to compete with Samsung (005930). Never mind that the company only pulled in $13 billion in profit last quarter, and only has $140 billion in cash, and that Apple has the best-selling smartphone in the world. There is one thing that Wall Street analysts have forgotten in their reports, models, and projections — Apple has 500 million iTunes accounts with credit cards. More →
Yes, it seems that Steve Jobs knew what he was doing when he decided to launch the iTunes store all those years ago. Apple (AAPL) announced on Wednesday that it has now sold more than 25 billion songs over iTunes, an astonishing figure for the online store that has changed how people buy and listen to music. For the record, the 25 billionth song downloaded was something called “Monkey Drums” (Goksel Vancin Remix) by Chase Buch, which was downloaded by a German man named Phillip Lüpke. To celebrate his remarkable achievement of downloading a song, Apple is giving Lüpke an iTunes gift card worth €10,000.
Apple (AAPL) announced on Thursday its iTunes Store is now available in 56 new countries including India, Russia, South Africa and Turkey, bringing the company’s digital store to a total of 119 countries. All customers will have access to music available in DRM-free format with high-quality 256 kbps AAC encoding as well as iCloud. Along with popular international artists such as The Beatles and Coldplay, Apple says the new iTunes Stores includes music from local artists including “Elka in Russia, Sezen Aksu in Turkey, AR Rahman in India, and Zahara in South Africa.” Movies for rent or purchase are available only in the four aforementioned countries. MacRumors also has a great breakdown of every single new country that now has the iTunes Store. Apple’s press release follows below.
With just one day to spare, Apple (AAPL) on Thursday released the latest version of its popular media hub, iTunes. Announced this past September and reportedly delayed due to engineering issues, Apple promised that iTunes 11 would launch in November and now it finally has. Highlights include a completely redesigned player view, a new library view, a new recommendation system, a redesigned store, enhanced iCloud and iTunes Match support, and a new feature that finally saves the position of a video or audio book if you pause on one device and continue playing on another. iTunes 11 is available immediately for both OS X and Windows, and it can be downloaded via the source link below or using Apple’s software update feature.
Apple (AAPL) has reportedly been unable to come to an agreement with the world’s largest music publishing company over licensing fees for its Pandora-like music streaming service that was set to debut alongside the iPhone 5, according to the New York Post. Sony/ATV is said have wanted a higher rate per song stream, however Apple refused to agree to the publisher’s request. Music distributors, such as Pandora (P), usually pay a statutory rate that has been set for all songs played on the Internet. Apple is looking to do more than Pandora, however, and instead had to negotiate with individual rights holders like Sony/ATV. According to the New York Post’s sources, Apple is interested in more flexible licenses that will permit the company to direct users to its iTunes store to generate sales. The license would also allow the Cupertino-based company’s service to play a selected artist more times than Pandora and other music services are currently allowed. Talks are said to be ongoing. More →
Not to be overlooked in the hype surrounding the iPhone 5 was Apple’s (AAPL) revamping of its classic iTunes music software to feature full integration with its iCloud data storage service. Among other things, the new iTunes has added a “play next” feature that lets users queue up any song as next on their playlist without dragging and dropping, as well as a revamped mini-player that now comes equipped with built-in search functionality to make it less intrusive than previous versions. The new iTunes will be available for download in October.
Reports dating back more than a year have suggested that Apple (AAPL) is working on a streaming music offering similar to the services provided by Pandora (P) or Spotify, and chatter resurfaced late Thursday. The Wall Street Journal cited multiple unnamed sources in claiming that Apple is currently holding talks with music labels to offer such a service. Earlier reports suggested the service would be tied to iTunes, and the Journal notes that it would be available across Apple’s range of computers and mobile devices, and possibly also on Windows PCs. A recent Nielsen survey found that more adults use Pandora to listen to music than iTunes. More →
Digital downloads have made purchasing content on the Internet remarkably easy. Each year, millions of people purchase games, music, movies and software through services such as Apple’s (AAPL) iTunes store, Steam and other digital platforms. The majority of people are unaware that most of the content they purchase isn’t actually theirs, however, as non-transferable licenses impose many restrictions on how people can use the content they download. One Hollywood A-lister has had enough with these licenses and is considering legal action against Apple over the rights to his iTunes library, The Daily Mail reported. Bruce Willis was hoping to give his vast digital music collection to his children upon his death, but such an act is illegal according to Apple’s Terms of Service agreement. The actor is reportedly weighing his legal options against the Cupertino-based company and may actively support proposed legislation in five U.S. states that aims to give downloaders more rights to their digital content.
Apple is reportedly planning a complete overhaul of its iTunes service, marking one of the largest changes since the music software debuted in 2003, Bloomberg reported. According to the publication’s sources, the changes will closely integrate the Cupertino-based company’s iCloud storage service with iTunes, allowing users to seamlessly access and manage their music, videos and downloaded apps across various devices. Apple has reportedly been negotiating with major record labels for rights to offer a feature that would allow users to share music with a friend for free. Music labels have also been urging the company to offer a subscription service to compete with Spotify, however it is unlikely to do so according to Bloomberg. Apple is expected to unveil the changes to iTunes by the end of this year. More →