Wednesday, April 09, 2014

The decline of downloads

Great article in Billboard about the competition between Apple and iTunes on one side, and the double threat of streaming services and Google's stranglehold on mobile devices.

Here is a graphical history of sales (as a percentage of total units shifted) for the various music formats.  CD's passed cassettes as the top format from 1990 onward, but interestingly enough, IIRC, 1989 (or perhaps even 1990) was the top year for total cassette sales.  IOW, when cassettes hit their peak in terms of total sales they were oddly enough already on the decline -- a decline that came swiftly and definitively.  I believe the peak for CD sales occurred in 2000, although the graphs show that the CD reached its peak in terms of percentage of total sales in 2002-3.  So one could equally claim that when CD's hit their peak around 2002, they too were on the decline -- a decline that came just as swiftly and decisively as it had for cassettes not much more than a decade previous.

CD's ruled the industry for not more than twelve years.  Total download sales didn't pass physical sales until 2012, but by that time the CD had been dead as the leading format for years.  Downloads and streams (both legal and otherwise) were taking over and there was nothing anyone could do about it, but the industry found a way to squeeze more juice out of the very profitable CD model before finally admitting defeat, kicking and screaming.

Downloads will not rule the industry for nearly as long.  The pie charts show that the rise of streaming/subscription services and legal downloads happened roughly simultaneously, so it's arguable whether they ever really dominated music consumption at all.  But iTunes has been crushing the competition in the download market, that part is indisputable.  But as the Billboard article explains, they're rapidly losing market share to streaming services, which should come as a shock to no one because once you've weaned people off the idea of buying music as a physical object, you can't expect any brand loyalty from consumers who are accustomed to thinking about songs as faceless, invisible objects. No matter which site you get your music from, it's all the same mouse click, there's no aesthetic or sentimental reason to prefer one website to another.

If you thought the CDs' decline was swift, that was nothing compared to what's going to happen with downloads.  Download sales may have peaked around 2012, but like CD's and cassettes before them, that doesn't mean that the format wasn't already in decline.  Things were never the same after the iPod was introduced.  It showed that music as a physical object to be purchased in a store was on the way out -- the future would be based around playback devices. Apple, of all companies, should understand this.   So in 2014, that means mobiles and tablets, and Apple will have to shift its way of thinking, and fast.

I still remember the day in 1990 when I was listening to CFNY in Toronto and the DJ (forgot who, but I believe it was early afternoon on a weekday in the summer) talked about some pie-in-the-sky news/tech-y story about how in the future we wouldn't buy our music, we'd have a service (perhaps envisioned as a satellite-based service at the time) that would play our music on demand for us.  And I couldn't even imagine how it could possibly happen one day.  

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