That iTunes Store Study: We’re Seeing A Lot Of Chicken Littles Around Here

itunes.gifThere’s been a lot of chatter in the industry-blog sphere about a recent Forrester Research report on iTunes Music Store sales that cast doubts over the service’s potential for profitability. The research company itself said “it is too soon to tell whether the decline is seasonal or if demand for digital music is falling,” but that didn’t stop some outlets from referring to iTunes’ imminent collapse; as Coolfer is quick to point out, though, month-by-month analyses of music sales don’t always paint an accurate picture of sales trends. Like a lot of other online wags, we haven’t read the report–at $249, it costs about as much as a 30-gig iPod–but glancing at the bullet points, we see that one of the chapters is titled “Apple Sells Just 20 iTunes Tracks For Every iPod Shipped”; that point’s been seized on by pundits as representative of the fact that people “aren’t ready for digital music,” but iPods are still selling strongly, and a lot of people buying them presumably have already-existent record collections. Not to mention that the idea of selling music as a loss leader isn’t exactly a revolutionary one. We’re wondering if this story is a harbinger of a coming backlash to Apple’s digital-music efforts–after all, now that it’s the biggest target in its category, going after it will be a lot more fun for reporters than making another predictable joke about turds.

Few iPod Owners Are Big iTunes Buyers [Forrester Research]
Apple ITunes Sales Slid in First Half, Forrester Says [Bloomberg]

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  • Chris Molanphy

    I don’t know if the Forrester people can be bought off, but my theory is that this is part of the overall industry plot to chip away at iTunes in time for the dreaded negotiation with Apple next spring. That’s when the 99-cent model comes due for another renewal, and as you see with the Doug “Thug” Morris posturing over the Zune, the industry is trying to push Steve Jobs into a corner and make him cave on pricing.

    Of course, according to “conjectural transcripts” of the forthcoming negotiations, I think Jobs might, shall we say, hold firm.