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News
Digital Music Sales Flat
Tuesday, November 15th, 2005 at 2:00 PM - by Jeff Gamet
Online digital music sales in the United States has remained fairly flat for the past five months, according to a MacNewsWorld report. Music downloads tripled up to 6.6 million a week from May 2004 to May 2005. By October, however, sales were still at 6.7 million a week.
The recording industry is disappointed, since it was counting on the iTunes Music Store (iTMS) and other on line music services to boost music sales. Instead, sales are unlikely to even make up for declining CD purchases.
SG Securities media analyst, Simon Baker, commented "Downloads in the U.S. have plateaued alarmingly. This has devastating implications for predictions that digital sales would grow exponentially."
The record labels have been looking at the iPod's success as a tool to boost their own revenues, assuming that iPod sales would translate into new music sales, much like CDs did during the transition from vinyl records and cassettes.
Songs per iPod sold has dropped in the past year. In October 2004, the average number of songs purchased annually was at 25 per iPod. But in October of 2005, that number had dropped to 15.
Even without a steady increase in digital music sales, consumers are purchasing nearly 27 million songs online each month, helping some companies turn a profit. EMI, for example, showed a net income of US$99.4 million for 2005.
Ultimately, music distributers may have set their expectations higher than consumers were willing to go.
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