Digital music sales have declined by as much as 14%, according to Apple's annual report filed with the SEC. iTunes music sales took a rather extreme dip over the past 12 months, according to Apple's latest regulatory filing.
In an 88-page annual report, filed Monday with the Securities and Exchange Commission, Apple said the iTunes Store overall raked in more revenue in fiscal year 2014 -- which ended September 27 -- than in fiscal year 2013, but noted that music sales have fallen.
Apple didn't reveal specifics on how much digital music sales have declined. But on Friday, the Wall Street Journal cited "people familiar with the matter" who said that music sales at the iTunes Store have dropped to as much as 14 percent since January 1. The Journal pinned the blame on growing competition from cheap music, such as free videos and $10-per-month unlimited music streaming subscription plans.
In its regulatory filing, Apple also acknowledged competition from such rival services.
"The Company's digital content services have faced significant competition from other companies promoting their own digital music and content products and services, including those offering free peer-to-peer music and video services," Apple said in its filing.
In other words, why pay for digital albums and songs when you can listen to them for free on YouTube, or on the cheap through such services as Pandora and Spotify?
But, Apple is far from alone...
A drop in digital music sales is hitting the industry as a whole. On Monday, The Guardian cited one example of mobile app Shazam, which has witnessed the number of songs purchased drop from 1 million in March 2013 to 400,000 this past September. The Guardian also cited an August report from Midia Research, which found in a nutshell that streaming users are buying fewer digital albums.
Hold on... It's Supposed to be All About The Music... Right?
This is a year we are at the end of October and there has been no album that has gone platinum. Not a single one! The most anticipated album of the year is a set of "previously unreleased material" by Pink Floyd, who of course date back to the early 1970s. Other big music news, Led Zeppelin continues it's remastered reissues of albums from that same decade.
The record companies got what they wanted, which was a raft of interchangeable acts that are chosen by audition and do what the producers tell them, mostly relying on marketing image to sell. It's bland, corporate product with no artistry, but hey at least the record execs get to keep control of the product and the profits. No more bands becoming big names on their own merits and turning into brands in their own right that can set their own terms and write their own ticket, cutting out the middleman. The middlemen have put a stop to that and are now fully and completely in control.
Of course, a deliberately mediocre product is going to inspire mediocre levels of fan excitement. Nobody but the older, powerhouse bands can inspire that kind of fierce devotion anymore. But the record execs don't care if the pie shrinks a little so long as the return on investment is solid and predicable, which a music as commodity product business model produces. Nothing less than a complete collapse that destroys the RIAA conglomerates entirely will end the unending sea of blandness.
At least there's still great music being made overseas and domestically - if you look in the underground scene. Don't expect any better from the big corporate labels though. The days of excellent music from the majors is over.