globeandmail.com: Music downloads in downward trend — While the music industry will blame this on piracy I think it goes deeper — to the heart of the business. There is virtually no way for most buyers to hear new music that they may want to purchase since the consolidation of the radio industry. Blame the FCC for allowing this.
Mr. Bernoff questions whether consumers are reaching their saturation level for music downloads. He found that iTunes’ rapid expansion rate has slowed. The service grew sevenfold between April, 2004, and January, 2006, but since then the number of transactions has dropped by 58 per cent.
The downward trend is not limited to iTunes, which, according to Apple, accounts for 88 per cent of music purchased off the Web in the United States. Sales of all music downloads in the U.S. have stalled in the second half of the year, falling from 144 million tracks in the first quarter to 137 million in each of the second and third quarters, according to Nielsen SoundScan, which tracks industry figures.
The trend is unwelcome news for the industry. Illegal downloads have chiselled billions of dollars out of the music industry’s revenue base over the last six years. In the U.S. alone, annual sales were down 23 per cent between 1999 and 2005 to $11.2-billion, according to the Recording Industry Association of America (RIAA).