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.
Some record company executives worry their industry could lurch back into decline after several years of relative stability, should download sales decline faster than streaming growth accelerates. A key part of that equation, executives say, is persuading enough users of online music services to pay a monthly subscription fee, usually $10 a month, rather than stick with free versions that carry advertising and generate much less revenue for record labels.
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