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Apple Hopes iTMS Gift Certificates Will Reverse Download Decline

Tuesday, December 13th, 2005 at 3:00 PM - by Staff

With average downloadable music sales down 0.44% in the third quarter of 2005, despite ever-increasing MP3 player sales, Apple is looking to the holiday sale of iTunes Music Store gift certificates to help the situation. Simon Aughton, writing for PC Pro, noted: "iPod customers are preferring to fill their players from ripped CDs and P2P downloads."

If the sales decline doesn't reverse itself after the holidays, music labels may be in a stronger position to demand higher prices for new songs on the iTMS, according to Mr. Aughton. They may also be able to push Apple into offering a subscription service, something CEO Steve Jobs has resisted so far.

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A guest said: (hide)

Tue Dec 13, 2005 4:08 pm

Thoughts from a music industry rep...

"iTMS downloads are down? I've got a brilliant idea...raise the prices!"

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macnut said:

member since 28 Jul 2004 with 52 posts, unranked, send him a message or view his profile

Tue Dec 13, 2005 4:26 pm

"They may also be able to push Apple into offering a subscription service, something CEO Steve Jobs has resisted so far."

I doubt it. They may be able to get away with raising the prices, but they can't force Apple to start a business that they don't want to. It would be like making Blockbuster sell pr0n.

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A guest said: (hide)

Tue Dec 13, 2005 4:46 pm

"If the sales decline doesn't reverse itself after the holidays, music labels may be in a stronger position to demand higher prices for new songs on the iTMS"

I read this comment somewhere else, too. Poor sales = raise prices, sounds logical too me - not!

(and I do realize that they want to balance the higher prices with lower prices for less popular music, but still digital music has less value, there is no resale, if your hard drive crashes it is lost, etc.)

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A guest said: (hide)

Tue Dec 13, 2005 4:57 pm

I would think its the reverse. Since sales are down, I could see Apple pushing for price reductions, increased quality, and discovery features like Pandora-type streaming to make downloaded music more desirable.

And I wouldn't put it past SJ to have intentionally caused music downloads to decrease by putting Apple's emphasis on podcasts and video content, so as to strengthen his hand.

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LizzyMcBee said:

member since 16 Apr 2002 with 7 posts, unranked, send him a message or view his profile

Tue Dec 13, 2005 5:04 pm

The percentage 44% means 44 out of 100 or 44/100. The percentage you used in this article is .44% which means .44 out of 100 or less than half of one percent, .0044. Did you mean 44% which is very significant or less than half of one percent which is not notable?

Thanks,

LizzyMcBee

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mahuti said:

member since 09 Jan 2003 with 377 posts, TMO Staff, send him a message or view his profile

Tue Dec 13, 2005 5:13 pm

I have a better idea for the music folks. Put out better and more diverse music and maybe I'll buy more. Oh wait.. if they did that it would be tougher to run all of the Clearchannel stations.

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bijoubip said:

member since 13 Dec 2005 with 1 posts, unranked, send him a message or view his profile

Tue Dec 13, 2005 6:35 pm

Simon Aughton seems to have ripped off his story directly from BusinessWeek online (http://yahoo.businessweek.com/magazine/content/05_51/b3964063.htm) while simultaneously warping the facts!

According to the BusinessWeek article: "According to Nielsen SoundScan, average weekly download sales as of Nov. 27 fell 0.44% vs. the third quarter." NOT as Simon Aughton re-writes: "The research group (Nielsen SoundScan) found that average sales dropped 0.44 per cent in the third quarter despite the continuing rise in sales of MP3 players."

Apparently Simon Aughton was doing very little fact checking of his own - he couldn't even plagiarize accurately from the BusinessWeek article which itself has all the appearance of thinly disguised FUD generated by Chris Gorog or someone sharing his goals.

The Businessweek article takes the weekly download count of November 27, which has got to be one of the WORST weeks of the year (Thanksgiving?, Travel?, Holiday Shopping Season begins?) for online downloads of music and compares that to the third quarter average!?! WTF!?! And at that the count is down less than .5%! This has all the stink of someone cherry-picking statistics to suit their own end purpose! And Simon Aughton is an all too willing but half as bright accomplice.

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MacTad said:

member since 05 Dec 2001 with 338 posts, unranked, send him a message or view his profile

Tue Dec 13, 2005 7:00 pm

LizzyMcBee wrote:
The percentage 44% means 44 out of 100 or 44/100. The percentage you used in this article is .44% which means .44 out of 100 or less than half of one percent, .0044. Did you mean 44% which is very significant or less than half of one percent which is not notable?

Yeah, I was just about to mention that. Somehow, a 44% reduction in downloads would have caused mass panic by now. Therefore, I think these numbnuts are worried about a measly .44% which one can easily attribute to any number of things. Geez, let's find something else to worry about, why don't we?

MacTad

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A guest said: (hide)

Tue Dec 13, 2005 7:58 pm

Did Apple release a press release saying they hope that gift cards raise downloads? I haven't seen it but the article starts by saying that "Apple hopes..." Apple never said it. I'm sure they want downloads to go up but they are putting words in their mouths.

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A guest said: (hide)

Tue Dec 13, 2005 8:09 pm

There is a simple way to increase the iTMS music sales: Apple should simply increase the bitrate of the files.

I will not download ANYTHING from iTMS at that ridiculously low 128kbs quality. Increasing quality to 192kbs would bring lot of the people who are currently ripping cds and downloading higher quality MP3-files, to iTMS.

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LaurieF said:

member since 15 Jun 2001 with 3547 posts, TMO Forum Mod, send him a message or view his profile

Tue Dec 13, 2005 8:13 pm

LizzyMcBee wrote:
The percentage 44% means 44 out of 100 or 44/100. The percentage you used in this article is .44% which means .44 out of 100 or less than half of one percent, .0044. Did you mean 44% which is very significant or less than half of one percent which is not notable?

Well, it would be notable if the previous months' sales had been regularly increasing at rates of, say, 5% a month; then a month comes along where there's a drop of 0.44%. Although the drop in sales/income is slight, the trend is the thing.

Nothing accelerates to infinity - eventually entropy takes over and it falls off. Even iTMS sales.

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Tue Dec 13, 2005 11:39 pm

Maybe it's a 44% decrease in expected growth. In political circles, this would be called a cut, a massive cut, a capricious cut intended to kill the poor, the sick, the elderly. Whatever the true meaning of this statistic, it is clearly the fault of George W. Bush.

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A guest said: (hide)

Wed Dec 14, 2005 12:47 am

Guest wrote:
Thoughts from a music industry rep...

"iTMS downloads are down? I've got a brilliant idea...raise the prices!"

my thoughts exactly - if people are turning to ptp downloads now, i'm sure higher prices will bring them right back to legal venues.

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Wed Dec 14, 2005 1:25 am

One guest wrote:

Quote:
(and I do realize that they want to balance the higher prices with lower prices for less popular music, but still digital music has less value, there is no resale, if your hard drive crashes it is lost, etc.)

The music is lost only if you're stupid enough to not back it up. You can save iTMS music files on *data* CDs or DVDs using iTunes. If you're not doing this every time you buy somethin on iTMS, you deserve whatever happens. Do it **NOW**.

Another guest wrote:

Quote:
I will not download ANYTHING from iTMS at that ridiculously low 128kbs quality. Increasing quality to 192kbs would bring lot of the people who are currently ripping cds and downloading higher quality MP3-files, to iTMS.

It would also increase the file size (and the download time) by 50%.

Are you sure that you can really tell the difference? Wanna try? I tried with AAC files and a real audiophile. He couldn't consistently pick out the higher bitrate files. I could have done as well flipping a coin. You have to try this completely blinded, so that neither you nor the person taking down the data knows which is which. Otherwise, there is far too much opportunity for subtle biasing. You have to try dozens of files, as well.

There is a lot of snobbishness and psuedoscience in audio work. (A simple example are very expensive cables, some of which are supposed to be "optimized" for ONE-WAY current--you attach a desinated end to the "source," the other to the "input." This is so silly as to be rediculous, given that the current flow both ways--it's an alternating current, after all.)

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A guest said: (hide)

Wed Dec 14, 2005 9:50 am

When will Dumbya start "reducing the increase" in Iraq reconstruction contracts to his friends? It seems okay to defend "decreasing the increase" in spending to help the poor, but G-d forbid we cut corporate welfare...

I agree that complaining about a .44% decrease is FUD...

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Tiger said:

member since 17 Jun 2003 with 1018 posts, unranked, send him a message or view his profile

Wed Dec 14, 2005 10:48 am

Everybody has pretty much said it here already. Lower the prices, stop producing crap, give the customers a product of value and they'll return to buying it.

The morning news had a similar complaint from movie studios who have seen their revenues plummit. Duh, same scenario. LOWER THE DAMN prices of movie tickets. I'm not going to pay $10 to go see a whole lot of movies that are garbage. I don't mind questionable content, I'm an adult, even if something can be construed as offensive, I have a thick skin. But come on, the Dukes of Hazzard? Heck, they shot that HERE where I live and it was embarassing (though, I did get to walk right through the set once and halt a shot as I was returning to my office with coffee and yes, I took satisfaction in that fact).

When only one or two movies a year are worth seeing, they can expect their revenues to continue to plummit. Enough with the $100 million blockbusters. Give us something of value and maybe you won't be "DeRailed."

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A guest said: (hide)

Wed Dec 14, 2005 4:26 pm

gslusher wrote:
Quote:
I will not download ANYTHING from iTMS at that ridiculously low 128kbs quality. Increasing quality to 192kbs would bring lot of the people who are currently ripping cds and downloading higher quality MP3-files, to iTMS.

It would also increase the file size (and the download time) by 50%.

Are you sure that you can really tell the difference? Wanna try? I tried with AAC files and a real audiophile. He couldn't consistently pick out the higher bitrate files. I could have done as well flipping a coin. You have to try this completely blinded, so that neither you nor the person taking down the data knows which is which. Otherwise, there is far too much opportunity for subtle biasing. You have to try dozens of files, as well.

When you're comparing file formats, you should never just try to pick the "best sounding" file. Instead, you should ALWAYS compare the compressed file to the original uncompressed file. And yes I CAN tell the difference. Even 192kbs MP3 file is closer to the original uncompressed file, than the 128kbs AAC file.

Sometimes 128kbs AAC file might sound even "better" than the original uncompressed file. This is for the same reason that some people prefer the crunchy sound on LPs. If the bit rate is high enough, you wouldn't notice ANY difference, and the compressed file shouldn't sound better or worse.

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