Apple Denies Report That It Will Terminate Downloads 'Within Two Years'
May 11, 2016 at 12:39 PM (PT)
It took until the end of the day WEDNESDAY (5/11), but an APPLE spokesperson finally denied the wildly spreading rumor that it will terminate its music downloading business within two years. “This is not true,” APPLE spokesperson TOM NEUMAYR told to BUZZFEED News, referring to a report on DIGITAL MUSIC NEWS, which describes discussions now focusing “not on if, but when” music downloads should be retired for good. Sources insist that a number of timetables are being considered, from two to four years in length.
In an estimate revealed by CANADIAN MUSIC WEEK analyst MARK MULLIGAN cited by the report, iTUNES music downloads will still be worth $600 million in 2019, down from peak revenues of $3.9 billion in 2012. “If he were alive, JOBS would have killed it,” one source is quoted as stating. Last year, downloads declined by 16%, while this year so far they are declining by "between 25% and 30%."
With APPLE MUSIC claiming 13 million paid subscribers, it could mean the death knell for downloading in favor of streaming. According to MULLIGAN, that is surging towards 20 million by year's end, with streaming revenues slated to match the 2012 peak music download revenues by 2020. He suggests this is the point at which APPLE "would chose to turn off the iTUNES STORE.”
Another possible move is for APPLE to terminate downloads on a country-by-country basis, depending on adoption rates. An initial shutdown could take place in "tier 1" countries like the U.S., U.K., and selected, cutting-edge territories in EUROPE and ASIA, with"‘tier 2" and "tier 3" countries experiencing a shutdown after that.
Another variable concerns the recording labels themselves, particular the independent sector, which derives significant revenues from downloads, and are expected to oppose any "premature" shutdown.
Major labels may be more supportive, with APPLE MUSIC exec JIMMY IOVINE perhaps smoothing the way for the transition, according to the story.