A few years ago, the idea of being able to buy only the songs you wanted at around a dollar was very appealing. This saved customers a lot of money as they didn’t have to purchase an entire album, although that soon changed as customers moved from physical to digital and started amassing a digital library of albums and singles.
Fast foward to today, it seems that the idea of paying $10 for album is starting to lose its appeal. After all why pay $10 for one album when $10 a month could nab you access to thousands of albums, right? This is why a report from TechCrunch that revealed that Spotify’s revenue has managed to outpace iTunes in Europe doesn’t really come as a surprise.
The revenue in question is based on the royalties that is being collected, so as you can see in the graph above, the early part of 2013 saw iTunes still leading the way in revenue. However in the later part of the graph, not only does Spotify overtake iTunes, but it also shows that iTunes’ revenue is on the decline. This seems to be in line with a report from The Wall Street Journal a couple of weeks ago where they reported that iTunes has experienced a 13% decline in digital sales.
Many have reported on this trend and we expect that it could be one day where streaming becomes the new standard and medium in consuming music. This might also explain Apple’s interest in Beats where they could take Beats Music and integrate it into iTunes to help offset the decline in digital sales.