Apple will soon be chopping off music downlands in the iTunes Store, that’s according to a report by Digital Music News. Citing sources familiar with the matter, the outlet says an aggressive, two-year timetable to switch completely to streaming music is gaining traction within the company.
Hedging on its claim, the site also says other shutdown plans are being considered, including one that would see the iPhone-maker offer music downloads for another 3-4 years. Regardless, executives have agreed that keeping downloads running forever is no longer on the table.
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 from $3.9 billion in 2012.
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.
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.
Published via: Digital Music News
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