Report: Apple Considering Major Changes To iTunes Radio
April 9, 2014 at 3:32 PM (PT)
APPLE executives are considering a dramatic overhaul of iTUNES RADIO after its launch failed to prevent the further decline in music download sales, BILLBOARD reports. Label executives have told the magazine that only about 1-2% of listeners are clicking the buy button, while overall music downloads have fallen by as much as 15%.
Since that has continued to diminish iTUNES' share of label revenue from 70%-50%, according to one estimate, the tech giant is considering options such as its own on-demand streaming service, an iTUNES store for GOOGLE’s Android devices and negotiating download sales windows that favor APPLE..
While APPLE predictably declined to comment, several unidentified label executives did. “iTUNES RADIO hasn’t solved the problem of refreshing the iTUNES store,” one source noted. “While listeners are clicking the buy buttons, the traffic it is driving is in the low single digits of listeners.”
"They know iTUNES has to change radically, but they still don’t know which way it will go," another label exec added. "But it will be completely different in three to five years. They are committed to making that happen.”
"The a-la-carte consumption model is 11 years old and at this point the decline in the U.S. download sales seems unstoppable; it doesn't seem like the store is refreshable," said another, predicting that APPLE will have to embrace some form of a subscription service." But there will always be an audience who purchases music downloads, which will force APPLE to continue to run its download store and iTUNES RADIO with a new premium subscription model.
“When sales are going up, it’s all offensive moves,” a label honcho said. “Now that sales are going down, they have to make defensive moves. But whatever they decide to do, I wouldn’t bet against them still being No. 1 with the customer. I would bet they will always be.”