Analyst: Apps are to blame for music sales drop, not streaming services

Analyst: Apps are to blame for music sales drop, not streaming services

Digital music sales have declined for the first time since the iTunes Store went online, according to a recent Billboard report. Analyst Horace Dediu thinks he knows the culprit: apps. Dediu explains his reasoning in a new post on Asymco.

Dediu discounts the theory offered by Billboard that we're turning more towards streaming services like iTunes Radio, Spotify and Pandora instead of buying music outright. Instead, he thinks that faced with limited amounts of downtime, we're more likely to fire up an app than we are an album.

Downtime or "boredom" was filled with app interaction. This includes some social media consumption. These are not immersive experiences. They are "casual", inconsequential and trivial. At first anyway. And that's the rub. As apps enter a consumer's world they initially take on non-consumption, which is easy to beat. But as the experiences become increasingly compelling they "move upmarket" and compete more aggressively with existing media consumption patterns.

It's an interesting theory.

I don't think it's just apps - I do think that streaming services are cutting into music sales, and music industry executives agree. Just anecdotally, around my house, my three kids - teenagers all - listen to their music almost exclusively on streaming services, only very occasionally downloading music they want to hear. In another lifetime, they would have been the principle consumers of new music in our household - the ones more likely to spend disposable income on records, tapes, CDs and eventually MP3s. But that's changed because the way that content is being delivered to them has changed.

Even I've found iTunes Radio to be a palatable and preferable alternative to listening to my own library. I still buy music, and have a huge library of my own, but I've set up a few custom iTunes Radio stations that I really enjoy to listen to when I'm out for a drive. It beats the dross on the radio, and as an iTunes Match subscriber, I don't have to deal with ads. What's more, it's exposed me to new music I want to hear.

There's little question that we also fill our idle moments with other activity. Even sitting on the couch when there's a TV show I want to watch, I usually have the laptop perched on my lap or have an iPad in hand, playing a casual game or checking email and social media - along with everyone else in the living room watching the show with me.

I'll agree with Dediu about one thing without reservation: There's no question that these devices and the app ecosystem that supports them have fundamentally altered the way we spend our leisure time. For better or for worse.

How about you? Are apps the new music downloads? Have you switched to streaming services instead of buying your music? Sound off in the comments.

Source: Asymco

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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There are 23 comments. Add yours.

William Beem says:

I thought it was a plethora of crappy music that was the cause of declining music sales. The music industry was better off when it had musicians instead of artists.

Premium1 says:

+1, music just isn't the same anymore.

iSRS says:

Right on! But the industry will never admit to that.

Plus, everyone is looking for the silver bullet. It likely isn't one thing. It is the quality decline of music out there, it is apps, it is internet streaming services. It isn't one thing.

m_thoroughbred says:

I agree

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GrilledCheesus says:

People have been claiming that whatever music was currently popular is somehow horrible since music began. Anyone who can't see that music is more diverse and modern musicians have more and better ways to connect with their audience than ever before must not be looking very hard.

"Record" sales? Yeah, it probably is streaming (IMHO). Technology changes industry landscapes. Deal with it.

khobia2 says:

Hey they ought to pay you not the dumb analyst. LOL. What music. You call that nonsense they play these music.

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Gsarfin says:

+1 I agree with William!
I won't buy shit! Get rid of Miley, bieber, Taylor swift, all the lip sync-ers, teeny-bopping talentless stage prancers and maybe there'll be an increase in "music" sales!
I have about a dozen streaming service apps on my phone. Almost never use them. I buy my music.

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worknman says:

Not to mention Lil Wayne, Drake, and the rest of their ilk.

Quis89 says:

You guys amuse me. You stop buying music because of a few artists you don't like? There are other alternatives out there. And those artists are some of the best selling ones out right now. Get off your high horses.

iSRS says:

I think I understand what you are saying, but the artists I listen to and support certainly don't release music every single year. So while there are artists I will preorder from iTunes, they aren't releasing an album every 10-12 months. This isn't the 60s.

bgriff25 says:

When I first saw Richards post on this last week the first thing I thought after reading the headline was streaming music. I know I've found myself listening to a lot more iTunes Radio, Pandora and even downloaded podcasts way more than I do to any of my iTunes library. Part of it has to do with storage on my device, but it's more about hearing music that I don't already own. I think this dude Horace is way off with his analysis. If I'm in the mood for music, I'm gonna listen to music not play Angry Birds or Solitare.

iSRS says:

Oh yeah! Podcasts, too! So I count 4 reasons why my purchases are down. Still, the biggest is the quality of what is being released, and the artists I would buy from not having a ton released last year.

emjayess says:

Apple is doomed, music is doomed, yadda, yadda, yadda......

Anyway, still waiting for "The Peter Cohen 'Band of the Week'" blog to appear--who knows?, might even save the music industry! ;-)

WPSteve says:

The Xbox Music app just updated to support offline playback, gamers rejoice! I won't be buying songs any time soon.

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Rowanova says:

All the reasons listed by the above commenters are real, true, and have an impact on declining music sales.
But I recall getting my first iPhone when it became available on Verizon, going to the App Store, and seeing plenty of games available. Now, approximately 3 1/2 to 4 years later, games have exploded to unbelievable proportions. Just a couple of days ago were the blogs posts, including here on iMore, about Apple's App Store mega success for 2013.
A lot of people are buying and playing games now, and consequentially, less music. Also look at the most downloaded, most popular, top grossing categories on the App Store, and it's games, games, games. It used to be a lot do social network apps, productivity, business, finance and news, with smatterings of everything else.
I'd bet lunch that game apps have a far bigger impact than any, maybe all, other types of apps. Add that to all the other reasons and we have what we have.

worknman says:

I think the streaming services are making a huge impact on music sales. But as far as artists are concerned, streaming services are doing them a favor, because if it weren't for that, a lot of these people would be pirating. So you have a choice between people streaming, where you make pennies, or people pirating, where you make $0. For better or worse, the days of paying $15 for a CD have long since passed, and they're never coming back.

Derrick4Real says:

Wrong. It's not apps or streaming for me. I don't buy music because most new music is crap. I still listen to music but there are free mixtapes and 200gbs of old great music.

rockerchick says:

True! Most music that I buy now doesn't come from mainstream artists.

GlennRuss says:

From old classics, to new music, you can find it through music streaming services, or "apps" some are free, some cost. It is rare not to find the artist, or songs you are looking for. Then there is youtube, that is another whole article in itself. The bottom line, why pay when you can get it free. I will support artist by buying their CD, but it is not in a store, but usually their own web site.

asuperstarr says:

How about no good music worth purchasing. I believe so many have been burned by so many bad full CDs that is just not worth purchasing.

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arookiiz says:

I use now streaming service such as Spotify and Pandora which are rarely use my music player or buy album

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khobia2 says:

I am getting sick and tired of all these damn analyst. I know they have to say something to get paid. But they seem just full of bullshit.

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rockerchick says:

I have iTunes Match and I stream music using iTunes Radio. I often buy good music from iTunes Radio, or I save them to my wish list to buy later. It is the most integrated solution for me. I do wish there was a way to view your recent purchases on AppleTV or that it wasn't so difficult to get to and play from on other iOS devices. I think there should be an auto playlist of recently purchased because many times I can't remember all of the recently purchased songs. I had Rdio and Spotify for their trial periods some time ago but I'd rather have music on my phone, not have to stream or for it to be integrated into ALL of my iOS devices.