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Re: Apple is preparing to abandon music downloads
Apple is now preparing to completely terminate music download offerings on the iTunes Store, with an aggressive, two-year termination timetable actively being considered and gaining favor. According to sources to Digital Music News with close and active business relationships with Apple, discussions are now focused “not on if, but when” music downloads should be retired for good.
The sources insisted on confidentiality and required that all conversations be conducted outside of email or any written medium, given the realistic fear of reprisals for sharing details of internal corporate discussions.
Back to the story, the sources indicated that a range of shutdown timetables are being considered by Apple, though one executive noted that “keeping [iTunes music downloads] running forever isn’t really on the table anymore.” Also under discussion is a plan to “ride the [iTunes music download offering] out for the next 3-4 years, maybe longer,” when paid music downloads are likely to be an afterthought in a streaming-dominated industry.
Since publication of this story on Wednesday, Apple has issued a rare denial of reported shutdown proposals.
Part of the debate is that paid music downloads still account for hundreds of millions of dollars to Apple, worldwide. According to an estimate revealed by music industry analyst Mark Mulligan at Canadian Music Week in Toronto, iTunes music downloads will still be worth an estimated $600 million in 2019, though that is down from peak revenues of $3.9 billion in 2012.
“If he were alive, Jobs would have killed it,” one source bluntly stated (and he’s probably right).
But this is a ship that is sinking, fast. “Last year downloads declined by 16% in nominal terms,” Mulligan noted. “This year they are tracking to decline by between 25% and 30%.”
Earlier estimates by Digital Music News projected song download revenues closer to the $750 million mark, though that could be overly-optimistic given recent declines.
Steve Jobs.
Lingering large is the ghost of Steve Jobs, who created a culture of aggressively phasing products out in favor of new ones, even if the older products were still earning money. That bleeding edge approach of actively cannibalizing Apple’s own products is now legendary, and the stuff of only the gutsiest companies and CEOs. Within the less renegade Apple of 2016, the question is whether current CEO Tim Cook is guilty of riding out the profits on a dying technology. “If he were alive, Jobs would have killed it,” one source bluntly stated (and he’s probably right).
Apple Music Growth.
A critical piece of this puzzle comes from Apple Music, the subscription service launched last July that already boasts 13 million paying subscribers (as first reported by Digital Music News). According to Mulligan, that number is surging towards 20 million by year end, with Apple’s streaming revenues surpassing peak music download revenues by 2020. “By 2020 [Apple’s] download business would be tracking to be 10 times smaller than streaming revenue but, crucially, streaming revenue would nearly have reached the 2012 iTunes Store download revenue peak,” Mulligan estimated.
“This is the point at which Apple would choose to turn off the iTunes Store.”
Product Confusion.
Weighing heavy on the decision-making process is a growing level of confusion amongst various Apple music properties. Already, download purchases are leading to obnoxious and confusing tie-ins with Apple Music (and for more on that, read this). Indeed, paying downloaders are being punished by a confusing traffic jam of overlapping offerings, not to mention wandering zombies like iTunes Match, iCloud, and other high-calorie components of iTunes’ ‘bloatware’ application.
Interestingly, the iTunes Store is almost looking like a microcosm of the issues that plagued a ‘Jobless’ Apple in the 90s, when endless computer models, printers, and other confusing peripherals and unnecessary products sagged the company’s profile and nearly plunged it into bankruptcy. Perhaps this is the perfect time for another serious streamline in music (and other media properties), and a solid wave to the music industry’s past.
Global Considerations.
According to the same sources, Apple’s termination could be staggered depending on the country. The reason is that rollouts and adoption rates can be completely different depending on the global region, with some countries yet to embrace streaming music (music less Apple Music).
According to one source, an initial shutdown could take place in ‘tier 1’ countries like the United States, UK, and leading countries in Europe and Asia, with ‘tier 2’ and ‘tier 3’ countries experiencing a staggered shutdown in subsequent years.
Label and Content Owner Considerations.
Another wrinkle comes from recording labels themselves, especially independent labels. That group derives significant revenues from music download sales, and is expected to express significant displeasure against any ‘premature’ shutdown. “It’s the past, not the future, but then you should know how the music business is,” one source ribbed.
Major labels, many of whom stand to gain handsomely from a meteoric rise in streaming, may be more supportive of the termination. Already, the entry of Apple Music appears to be bolstering music streaming overall, with Spotify thanking the company for pushing it past 100 million users. In that light, streaming music could enjoy even greater growth with a product clarification and streamlining from Apple.
On that front, top Apple Music executive Jimmy Iovine, a longtime fixture Universal Music Group before migrating to Apple Music, could play a key diplomatic role in the termination and transition.
Re: Apple is preparing to abandon music downloads
But this is a ship that is sinking, fast. “Last year downloads declined by 16% in nominal terms,” Mulligan noted. “This year they are tracking to decline by between 25% and 30%.”
That's an insane statistic. I'd also like to see the statistics on torrents. I rarely download anymore and when I do go to Pirate Bay I notice how few people bother to use it anymore. Shit that used to have many thousands of seeders now have hundreds and those that had hundreds are in single digits.
Streaming really is going to be the nail in the coffin. That era I predicted years ago where albums would eventually become extinct and artists would just release a series of singles to help promote their tour may be fast approaching.
I thought a potential new GNR album would be able to go platinum with ease. I think I'm wrong. 
Take dwindling shelf space for CDs in stores into account with the death of the download industry and the focus being on streaming, nobody will be going platinum anymore.
Re: Apple is preparing to abandon music downloads
Apple has since denied the rumor.
http://www.recode.net/2016/5/11/1166098 … s-not-true
I think this is quite horrifying to both musicians and fans of music. What is the incentive to make great music if there isn't a sustainable economy for you? I get the appeal of streaming but it's also requires either Wi-Fi or a continuous suck on your limited data package. You're paying the $X on data that you could've spent on music that benefits your favorite artists.
The whole thing seems topsy turvy to me.
Re: Apple is preparing to abandon music downloads
They should look to video/TVs lead and offer it for pay for the first 3-6 months as download or paid streaming thru the artists site (Biebs, Taylor, Kanye etc). THEN give it to youtube/pandora/spotify etc afterwards. Similar to shows ending up on Netflix.
Re: Apple is preparing to abandon music downloads
They should look to video/TVs lead and offer it for pay for the first 3-6 months as download or paid streaming thru the artists site (Biebs, Taylor, Kanye etc). THEN give it to youtube/pandora/spotify etc afterwards. Similar to shows ending up on Netflix.
Netflix is guaranteed $$$.
I don't think it works that way with music. It only fuels the black market, especially in Kanye's case. No one gives two fucks about Tidal.
Re: Apple is preparing to abandon music downloads
Apple has since denied the rumor.
http://www.recode.net/2016/5/11/1166098 … s-not-true
I think this is quite horrifying to both musicians and fans of music. What is the incentive to make great music if there isn't a sustainable economy for you? I get the appeal of streaming but it's also requires either Wi-Fi or a continuous suck on your limited data package. You're paying the $X on data that you could've spent on music that benefits your favorite artists.
The whole thing seems topsy turvy to me.
That won't be a problem. No real artist ever did it for the money. Getting out of the record label economy is actually a good thing. They've long since lost interest in promoting proper music and helping real bands make it, so what are they offering? A contract limiting your freedom? Recording equipment you can pretty much match on a 2k laptop?
These days the money is in touring, and it's decent money if you got fans. And with the internet and social media you are no longer dependent on a big label to get the word out. If the music is good and you put in the effort, you will get fans. You won't be bathing in cash perhaps, but make a comfortable living should be very attainable if you got the talent (or just the work ethic, Kiss are millionaires).
I'm far more worried about the lack of creativity in the movie industry. Where does a real artist find work there these days? Most of them are doing tv work, but even that is getting completely taken over by commercial interests. Not like you can make a movie in a home studio like a musician can.
Re: Apple is preparing to abandon music downloads
I'm far more worried about the lack of creativity in the movie industry. Where does a real artist find work there these days? Most of them are doing tv work, but even that is getting completely taken over by commercial interests. Not like you can make a movie in a home studio like a musician can.
Mostly indy films. Maybe in films filmed outside USA as well. It's not totally dry but I do think they have to be creative and find these opportunities instead of depending on the agent.
Because it sure as hell doesn't look like the Superhero/remake and sequel trend here is ending anytime soon in regards to cinema. At least you're lucky that you live in Europe and those trends haven't hit that continent yet.
Re: Apple is preparing to abandon music downloads
Those trends are alive, dominant and destroying souls in europe too.
Re: Apple is preparing to abandon music downloads
I'm far more worried about the lack of creativity in the movie industry. Where does a real artist find work there these days? Most of them are doing tv work, but even that is getting completely taken over by commercial interests. Not like you can make a movie in a home studio like a musician can.
It's depressing because you're quite right. Getting funding, even for established filmmakers is extremely difficult.
