iTunes music downloads still rake in millions of dollars every quarter for Apple, but they’re falling fast.
According to sources who claim to be actively working with the company, it is already mulling the idea of chopping music sales completely in as little as two years, and instead placing an even greater focus on Apple Music.
Is it a good idea for Apple to boot such a popular service in the same way it massacred floppy discs and FireWire, forcing users to stream all their music? Or should it keep iTunes alive until downloads die out naturally?
Join us in this week’s Friday Night Fight as we battle it out over the future of the world’s most popular music store.
Killian Bell: Even though Apple has bluntly denied this rumor, it has to be thinking about a future without iTunes music downloads. Sales have fallen pretty sharply since hitting a peak in 2012, and it’s highly unlikely they’re going to rise again. Sure, downloads won’t disappear within two years, but how long can Apple leave iTunes music hanging before putting it out of its misery?
It would certainly make sense to do so in the very near future. Apple’s focus is now on Apple Music, and growing its subscriber base as quickly as possible. According to music industry analyst Mark Mulligan, by 2020, the service will already have enough subscribers to generate more revenue than iTunes was in 2012. And ditching the latter will only help streaming take off even faster.
I know there are a lot of people who still like to download music, but if anyone can persuade them to stream it instead, it’s Apple. After all, this is the company that’s already convinced us to bid farewell to the technologies I mentioned above — plus CDs, the 30-pin dock connector, and more.
Don’t you think the iTunes music store should be sent packing in two to three years for the good of Apple Music?
Luke Dormehl: Well, you’re right that iTunes revenue is declining right now. Apple has been investing less and less in iTunes and it seems pretty clear that it’s an afterthought these days. It also seems clear that, even though the company has denied plans to get rid of music downloads, that doesn’t mean that it doesn’t plan to do so — only that it’s denying it.
Personally, I think it would be a shame to get rid of the option for those who want it. Even though there are more Wi-Fi hotspots than ever, and a lot of people have unlimited data plans on their phones, there are still benefits to actually being able to pay a one-off cost for music and owning it. $9.99 is a reasonable price to pay monthly if you’re looking for unlimited content, but do you want to have to pay that in perpetuity to be able to access your songs?
It’s a different way of thinking about ownership, sure — but not necessarily the best one. It’s also true that not everyone has access to the internet all the time, and that while streaming companies are offering more and more options for listening offline, it’s not always an ideal solution.
Killian: Unless you burn CDs, I’m not sure there are any real benefits to buying music anymore. Yes, you can listen to it offline, but Apple Music — and just about any other streaming service — gives users the ability to store tracks, albums, and even full playlists locally so that they can still enjoy them when they’re away from Wi-Fi or a decent data connection.
The only other advantage to purchasing music is that it sometimes comes with additional content, like digital booklets or exclusive videos. But Apple could easily make that available to Apple Music subscribers if it wanted to.
As for the $9.99 fee every month, it’s not really as bad as it sounds. That’s less than the cost of most albums on iTunes, and it gives you access to tens of millions of songs that you can play as much as you like.
It can’t be cheap to operate iTunes in so many markets, and if sales keep on falling like they are, it won’t be long before it’s no longer worth it. And Apple has never really been known to hold onto products and services that are on their last legs; it lets them go when they’re no longer raking in significant profits.
Luke: I think a large part of it is the psychology of owning something versus renting it. You’re quite right about the blurring of lines between streaming and downloading, and it’s quite possible to stream music you’ve bought on iTunes, for example. But I think a lot of people enjoy the fact that they can buy an album and keep listening to it without having to pay a monthly fee. Particularly older customers, or ones who have spent years accumulating playlists and don’t necessarily want to have to keep paying to access a lot of music they’re not going to necessarily listen to.
$9.99 a month isn’t much, certainly, but it’s still an amount that you’re going to have to keep paying permanently to continue listening to your favorite songs. Personally I like having both options there.
You keep mentioning the recurring $9.99 fee, but if you buy at least one album a month, you’re already saving money. And the great thing about streaming is, if you listen to an album that wasn’t as good as you were hoping it would be, you’ve lost nothing. Or if a deluxe version is released three months later, you can enjoy the extra tracks without paying a penny extra.
Yes, both options are nice, but so was having a VHS player when DVDs first took off. That’s still not enough to keep an iTunes music store running when the future is streaming.
Luke: But, provided you had a DVD-R, there was no qualitative difference between a VCR and a DVD. This comparison is far more like going to the theater versus owning a DVD in terms of the permanence of the experience. I also think that a lot of people don’t buy one new album per month. At a certain age a lot of people are happy with the music they’ve got, and don’t necessarily want to be forced to keep paying a recurring fee to listen to it. Do I think Apple will keep trying to push people to subscribe to Apple Music, while focusing less and less on iTunes downloads? Almost certainly yes. Am I yet convinced that paid streaming services are, in every way, superior to downloading individual songs? I’m not so sure. And particularly not at a time when, as we argued last week, Apple still has yet to perfect Apple Music.
But maybe I’m wrong. Is downloading music a thing of the past? Would you be happy to pack in your collection of owned music for a $9.99 per month rental agreement? Let us know in the comments below. And have a good weekend.
Friday Night Fights is a series of weekly death matches between two no-mercy brawlers who will fight to the death — or at least agree to disagree — about which is better: Apple or Google, iOS or Android?