Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

12.11.06: iTunes sales stagnant

Posted by Richard Koman - December 11, 2006


Considering that the average iPod has some hundreds of tracks on its little hard or flash drive, the fact that the ration of iTunes sales to iPods is 22, as of September 2006, according to the New York Times, reveals that something is not as advertised in the world of online music sales.

Apple single-handedly created the online music business, according to the Gospel of Steve. But since iTunes sales are flat - they have inched up from 20 to 22 - it's apparent that people rapidly lose interest in shelling out bucks for the same stuff that can be stolen online or legitimately ripped off of their own CDs or those borrowed from the library or friends.

“IPods are not sitting around generating dozens and dozens of transactions every quarter,” said Josh Bernoff, a principal analyst for Forrester Research. “People buy a certain number of songs, and then they stop.”

That's not necessarily horrible news for Apple since the real profits are in hardware as Furd Log briefly notes. "It's the RIAA who should be worrying," the blogger says and I agree.


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