Apple iTunes Sees Big Drop in Music Sales
Dive of at Least 13% in Download Sales Underscores Music Industry’s Fragile Recovery
By
HANNAH KARP

http://online.wsj.com/articles/itunes-music-sales-down-more-than-13-this-year-1414166672

Even the disruptors can be disrupted. The spread of streaming services and the overall trend of a sharing vs. ownership culture is hitting Apple hard. One of the drivers for purchasing Beats Music was their existing streaming business, an example of expanding a Capability Platform through acquisition vs. development. A company needs a process that continually searches for their potential disruptors.

Music sales at Apple’s iTunes Store have fallen 13% to 14% world-wide since the start of the year, according to people familiar with the matter. The decline is stark compared with a much shallower dip last year. Global revenue from downloads fell 2.1% in 2013, according to the International Federation of the Phonographic Industry. 

The plummeting download numbers help illustrate why Apple bought the $10-a-month subscription streaming service Beats Music earlier this year, as part of its $3 billion acquisition that included headphone maker Beats Electronics. Apple is rebuilding Beats Music and plans to relaunch it next year as part of iTunes, according to a person familiar with the matter…. 

…..Nielsen Entertainment analyst Dave Bakula chalked up the declines in downloads mostly to “a shift in the way consumers are consuming music,” noting that total streams on services such as Spotify and Pandora Media Inc. were up 46% for the year to date, compared with the same period last year. Streaming services now account for nearly one-third of the revenue from recorded music in the U.S., according to the RIAA… 

….The plummeting download numbers help illustrate why Apple bought the $10-a-month subscription streaming service Beats Music earlier this year, as part of its $3 billion acquisition that included headphone maker Beats Electronics.