Report on iTunes Revenue Causes Big Stir
A recently released Forrester Research report is causing buzz throughout the blogosphere, and illustrating how predicting industry trends can invite a swift, severe backlash.
Forrester analyst Josh Bernoff estimated that every time Apple sells an iPod, it also sells about 20 songs through iTunes. This, Bernoff noted, represents a drop in revenue and transaction size, and means that iTunes is currently operating at a 65 percent reduction in sales over last year.
Apple has blasted the claims, and Piper Jaffray analyst Gene Munster said the fears about declining revenues have been overstated. In a research note, Munster noted that Apple sold an average of 18.5 million songs per week through iTunes, representing an increase over the same period in 2005.
Sales Office
Although there are several music services available, it does matter that iPod is the top-selling device in the marketplace, said Jupiter Research analyst Michael Gartenberg. “Right now, whoever has the dominant device has the top music store, because it’s the devices that are sending people to the online stores, not the other way around,” he said.
Although there are several ways that iPod consumers can get music onto their players without using the iTunes store — such as buying actual CDs and putting them into their digital music collection — the breadth of available digital content at iTunes is still notable, Gartenberg said.
“It’s hard to call a billion and a half songs anything other than a success,” he said.
Buying Habits
With all the attention on online sales, some might think that the old workhorse of the music business, the pressed CD, might be on its way out, but analysts expect discs to last as a popular music-purchasing option for some time.
“The good old CD isn’t dead; there’s still life it in yet,” said Gartenberg. “But there doesn’t have to be a fundamental…
