Digital downloads eclipsed physical music stores a few years ago, rendering them almost obsolete.
Nielsen SoundScan reported a drop in U.S. digital music sales for the first time ever last year, from 1.34 billion to 1.26 billion. CD sales dropped 14 percent, to 165 million, although they have been steadily declining since digital downloading became the most popular method of obtaining music. Digital album sales remained steady at 118 million.
iTunes’ biggest competition is definitely services like Spotify, YouTube, and Rhapsody—118.1 billion songs were streamed through them last year, a 32 percent increase.
Apple has, however, experimented with streaming through its iTunes Radio feature.
Spotify made its U.S. debut in 2011, and several artists have protested because they don’t feel musicians are paid enough each time a song is streamed.
Streaming services are a profitable endeavor, though, which businesses like YouTube and Beats Electronics are picking up on. Both plan to launch their own paid streaming services this year.
Piracy has always been a threat to businesses attempting to sell music legitimately. Streaming services have the appeal of simplicity, large music libraries, and no chance of viruses. With their appearance, piracy has fallen. Sandvine, a broadband equipment company, reports that peer-to-peer file sharing networks account for less than 10 percent of North American web traffic now.
What do you think, PopWrappers? Is this drop in sales an ominous sign for iTunes? Or will Apple continue to reign in the music world?
Sound off in the comments below.