It is no understatement to say that 2017 has been a year of breaking news for the music industry, but very few news stories compare to the confirmation that Apple will be discontinuing digital downloads.
iTunes: The End of an Era
For over a year, rumors have been circulating that Apple has been planning to terminate its iTunes store to shift its focus towards streaming. But now, after purchasing Shazam for $400 million, it’s official – no more iTunes.
By the end of 2019, Apple will no longer offer digital downloads to its consumers. This doesn’t come as much of a surprise since the growth of streaming has been slowly by surely killing the market for digital downloads. While streaming has almost doubled in subscribers from 76.8 million 2015 to and estimated 132.6 million in 2016, iTunes’ sales peaked back in 2012 at $3.9 billion and is projected to fall to $600 million by 2019. Apple itself has contributed to this decline with the introduction of Apple Music in 2015, cannibalizing its download sales.
Now, with Shazam, Apple is hoping to increase its share of the streaming market by gathering more data about consumer behaviors and improving it music recommendation engine.
So, what does this mean for artists and songwriters?
It doesn’t bode well, considering that musicians make considerably more money from downloads than streaming. Just consider Zoe Keating’s publishing income report:
She earned over ten times more from downloads than streaming even though she had almost 3 million streams and only 41,000 downloads – and that was in 2013. We can assume from Apple’s investment choices that the scale will only tip further in favor of streaming. With the loss of the iTunes digital download, we can expect to see a sharp decline in the revenue earned by songwriters and artists.
And, what’s happening to all of our downloads?
Your downloads will still be there, but you can’t purchase new ones. Currently, their plan is to phase out the iTunes store over the next few years. In order to encourage traffic towards Apple Music, they will switch users’ downloads and playlists to a three-month trial account.
Stephanie Grimes is a graduate student at William Paterson University working towards her MBA Music Management. She completed her BS in business administration: management with minors in international business and marketing from Oklahoma State University in 2016. She is currently a publishing operations intern at Songtrust.