iTunes has been experiencing a nose dive on their music sales. With new, cheaper, ways of music-lovers getting their songs, it is making iTunes a long second or sometimes even third option for the consumers to get their material. Many new apps like Pandora allows the consumer to download the application for free and listen to a category of music with minimal advertisements. There have also been new apps that charge monthly with unlimited downloading ability for those days. Apple's sales have dipped 14% from the previous year, compared to a shallower dip of only 2% in 2013. It is incurring a rapid decline in sales where some actions has to be done, or Apple's system must be modified, or else iTunes would soon be outdated except for storing music on your phone.
The recent decline worries record company executives due to their fears of causing a loss of revenue. When iTunes was the main platform for music downloads it provided record companies stability, knowing they would get paid properly for each individual song or even album. With multiple alternatives, some being free, record companies pray that consumers turn to the $10-month subscription options so they could still earn a profit. iTunes needs to adjust their system to get back to the number one music download option.
Sources: http://online.wsj.com/articles/itunes-music-sales-down-more-than-13-this-year-1414166672
I agree that Apple needs to change some aspect of iTunes to ensure more promising revenue.From what the article mentions, I believe Apple will turn into a different sort of service such as a Pandora or Spotify but have its own twist on it. It's no secret that Apple is an exceptionally innovated company therefore I would assume they have something in the works considering their recent 14% loss of revenue this previous year. It will definitely be interesting to see what they do regarding this issue before any additional damage takes place.
ReplyDeleteItunes is declining in profit because new products are entering the market, making Itunes no longer monopoly. The industry becomes oligopoly, making profit divided. Also, Itunes is complicated in terms of new updates every time that makes the other products more easier to access.
ReplyDeleteI think this will be a problem for apple for a long time. There's so many substitutes or other ways to get music for free that paying for music is almost becoming a thing of the past. I have over a thousand songs on my iPod but I only purchase albums or songs from iTunes when it's my favorite artist. Apple will have to come up with a way to offer something that no other music downloading website offers. If not, people will continue to take the cheaper route.
ReplyDeleteI think Apple is working on this problem already. Apple has a relatively new service called iTunes Radio which seems to be just like Pandora and Spotify with a convenient way to purchase a song you hear on the stream. Also, with their recent acquisition of Beats Electronics, Apple has the Beats Radio service, which appears to be the same type of music streaming as the other mentioned services (plus the sales from the popular headphones). I think Apple is trying to solve this problem of declining sales and they are doing a decent job of delaying a transfer of power in the music industry but they need to come up with something new and revolutionary if they want to get the same hold of the market they used to have.
ReplyDeleteApple has already tried to edge pandora out by introducing iTunes radio, but hasn't gotten enough popularity with it yet to really make a difference. Pandora also has a strong brand and is being installed into cars because it is so popular. iTunes could also be hurting from more and more people illegally downloading free music. With all of these aspects hurting iTunes, Apple really needs to rebrand iTunes in order to become more competitive and make it cheaper so consumers will spend more money on it.
ReplyDeleteIn terms of its overall market, iTunes is no longer a spearhead on its own. Pandora and Spotify have made streaming music and having your own library for very cheap and affordable prices. Even though Apple is a much more diverse company a 14% loss in one sector still is a big financial hit and in terms of dealing with the competition Apple needs to address the issues of making it more feasible for customers otherwise people resorting to piracy and illegal downloading becomes more prevalent.
ReplyDeleteWith new software like Spotify and Pandora, it's no surprise that Itunes is struggling. They need to do something to diversify and prove they can compete with these new ways of listening to music or else these new programs will continue to grow and hurt their profits.
ReplyDeleteThere is no surprise that Itunes is in the state that its in given that there are so many free ways to download music. Given today's society, when something can be available to you free of charge, people are going to take that option over having to pay every day of the week. I feel that Itunes needs to become a stronger competitor to that of pandora and spotify given the nature of the business now. Like many of you have said already, I'm sure they are already in the process of doing this now, and given that its Apple, I'm sure they'll come out with something pretty good.
ReplyDeleteI can understand why iTunes sales are decreasing so much. Besides music websites and apps like Pandora and Spotify there are many websites where you can download music online for free. Although these illegal websites have been around for a while, the increase in the number of these websites is leading to the fall of iTunes. iTunes is declining, but they should be able to find out a strategy to bring their sales back up.
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