Digital Home Thoughts: iTunes Sales 'Collapsing'

"The leading DRM digital download service, Apple's iTunes, has experienced a collapse in sales revenues this year according to analyst company Forrester Research. Secretive Apple doesn't break out revenues from iTunes, but Forrester conducted an analysis of credit card transactions over a 27-month period. And this year's numbers aren't good. While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring's rebound wasn't repeated this year. And it isn't just Apple's problem. Nielsen Soundscan has grimmer news for prospective digital download services, indicating three consecutive quarters of flat or declining revenues for the sector as a whole... "The comparatively modest iTunes numbers suggest that consumers are still spending the bulk of their music budget $14-at-a-time on shiny discs," he writes. "iTunes sales are not cutting into CD sales," he elaborated to us, "they're an incremental purchase at best. "There's a problem here. CD sales have fallen 20 per cent over five years. The message here is not that CD sales are coming back, the ability to obtain pirated music is now so widespread the DRM looks to consumers more like a problem than a benefit.""

This does not exactly come as a surprise to me. What I do find surprising is how everyone is hinting that this may mean the end of DRM-encoded music. I don't think we'll see the end of DRM anytime soon. Britain is working on a unified DRM scheme, and I think that's the way to go in the future. If we are to believe the studios in that DRM is in place to protect the artist, then DRM will always be needed. For those of us that absolutely despise DRM in all its forms, DRM-free files are still readily found on any CD.