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News
Apple Drives Music Sales While Overall Market Declines
Monday, October 3rd, 2005 at 3:00 PM - by Jeff Gamet
Due in part to the iTunes Music Store, digital music sales tripled in the first half of 2005, despite a global drop of 1.9 percent in general music sales, according to the International Federation of the Phonographic Industry. Digital sales now account for 6 percent of the music market, estimated at US$790 million, and represent the majority of singles sold worldwide.
Music labels attribute the weaker general market to dropping CD sales and piracy. Thanks to the continuing decline in sales of CDs, they are pushing for Apple and other music sales and subscription services to raise rates in an effort to generate more revenue. Apple maintains that the current flat-rate system is best, while the labels want a sliding scale based on song popularity.
The looming showdown does not bode well for the music labels. The iTunes sales model has proven itself , and is very popular. Changing that now could erode digital sales, which would be akin to the music industry shooting itself in the foot.
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