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If you need another proof that download sales are declining steadily as music lovers increasingly rent their music rather than buy it, here’s one.

Spotify’s head of label relations in Europe, Kevin Brown, revealed last week to an industry outlet that his company is earning more cash across Continental Europe from sales of music subscriptions than iTunes does by selling individual song and album downloads.

As a reference, iTunes back in the summer of 2004 enjoyed a commanding 62 percent share of European music sales.

But having added more than a million active users in the United Kingdom alone in the last four months, Spotify seems poised to beat iTunes. Small wonder Brown is adamant that it’s only “a matter of time” before the Swedish startup overtakes Apple’s digital music store in Europe in terms of revenue.

Why isn’t Apple doing something about it? Doesn’t the firm see the signs on the wall already? Didn’t Tim Cook and Co. get the memo that music downloads are dying a slow death? Read on…

Brown said this past weekend in an interview with Music Week, via The Guardian newspaper:

Some of our partners are saying Spotify is now generating more revenue each month across Continental Europe than iTunes.

Given that download sales are declining and Spotify is growing rapidly, particularly in the UK, it is only a matter of time before Spotify is bigger than iTunes across Europe as a whole.

You might be asking yourself how that’s possible given a study by Edison Research that ranked Apple’s iTunes Radio the third most popular streaming music service in the United States, ahead of Spotify.

For starters, that study focused on the U.S. market.

streaming_services_chart_mar_14-800x570
Chart courtesy of Statista.

Europe is different: I should know, I’m based there now.

For starters, the European market is balkanized – that is, tremendously fragmented between dozens of smaller markets. Each local country/market has its own laws stipulating how digital music sales should be handled.

It’s a nightmare for U.S. companies like Google and Apple because local regulations differ wildly and there are a bunch of middle-men to deal with.

The complex web of digital music regulations and copyright laws in non-EU countries thus far has hampered the arrival of the mythical pan-European iTunes Store for music.

It’s also why it took a local startup that understands the intricacies of the European market to get it right. Spotify was established in October 2008 in Sweden and today has its headquarters scattered across Europe in London, England, Stockholm and Sweden.

By March 2011, Spotify announced passing one million subscribers across Europe before launching its service in the United States on July 14, 2011.

Yes, Spotify’s gains in Europe over iTunes exemplify the decline of the download model. On the other hand, the startup still has a lot of catching up to do in order to overtake iTunes globally – and that’s assuming Apple won’t enter the streaming-music space with a subscription-based music service of its own, which I suspect has been in the works for quite a while.

If Spotify is in fact poised to eventually make more money for labels than iTunes across the globe, I can’t imagine the 800-pound gorilla that is Apple resting on its laurels and doing nothing about it.

I know Apple has the free iTunes Radio, but I’m referring to true streaming, subscription-based. Look around you: what percentage of the techies you know actually buy individual song files for 99 cents a piece (or more) versus those who subscribe to an all-you-can-eat streaming music service for as little as ten bucks per month – which is less than a brand new album release on iTunes?

According to Billboard, Apple has opened “exploratory talks” with senior label executives about the possibility of launching an on-demand streaming service that would rival Spotify and Beats Music.

At any rate, the time is nigh for an on-demand music service from Apple.

I know, Steve Jobs said in 2007 that “people want to own their music” and while ownership worked for most people back then, people’s tastes change and it’s 2014 now.

Nowadays, Spotify’s rise is unfolding before our own eyes while iTunes in the United states at the same time is facing a double-digit decline as more and more people figure out they don’t really need to own their music files.

Some watchers speculate it won’t be long before a true iTunes streaming music thingy rolls out and I’m with them.

Apple’s summer developer event kicks off with a keynote on June 2, 2014 so perhaps the company will announce an iTunes branded music subscription service during the five-day conference.

Apple could tease it even earlier as its SVP of online services boss, Eddy Cue, is scheduled to headline the second night of Recode’s Code Conference in May, along with his peer – SVP Craig Federighi who heads all of Apple’s Software Engineering.

Wrapping up, let me remind you that Spotify has a fairly decent and free iPhone and iPad app in the App Store, which has been revamped recently with a darker appearance while picking up new features like Repeat One and Your Music.

I want to know your feelings on the topic so please extend this opinion by chiming in with your $0.02 down in the comments.

  • emayteetee

    I personally hate pandora. iTunes radio and iHeartRadio are awesome for listening to a shuffled playlist of some things you like, some you don’t care at all about. Spotify though, $9.99 is fine with me monthly for how much I listen to music everywhere anywhere and what ever I want in super high freaking quality. If iTunes offers a services like Spotify (iTunes in the cloud is great and all, but I only have 24,000 songs so, it gets boring quick) I will maybe switch, depends on why should I ? Spotify’s discover and browse options allow me to find SOOO much music! It truly is amazing! Now if only Att, VZW Tmobile and Sprint etc would just find a way to give unlimited data (not holding my breath for that one) I would listen to music 24/7 like our forefathers would have wanted!

    • trekka3311

      Tmobile does have unlimited data. I am a heavy data user and have never had an issue. Hear in miami, the LTE is ridiculously fast. I’ve never been happier with leaving my grandfathered AT&T “unlimited”

      • emayteetee

        Tmobile in jersey and surrounding areas blow unfortunately. I tried it, under 1 Mbps up and down on LTE and so many dropped calls owning a cellphone was pointless. But I’m glad someone can use it.

  • Gustavo Mirabal

    Well, like i mentioned on an early post. I am not into all these 128 GB iphones people is talking about. Im really set up with my spotify subscription and all i need i can play it “öffline mode” so i havent bought a single song from itunes almost year and a half ago.

    • ✪ aidan harris ✪

      I’d agree with you if it weren’t for the fact that if Spotify shut down tomorrow you’d lose all of your music…

      • emayteetee

        Yeah but that’s the difference, it’s not “his” music.

      • MagicDrumSticks

        I’m sure that if they were shutting down, they would give you a way to save your song names. Problem solved.

      • Gustavo Adolfo Mirabal

        Well, looks like i havent think this through…

      • Sean Clark

        Meh, I’m renting the music anyways. I’d be out at most $10 and I could dispute that charge with my credit card company.

  • CAS

    I just don’t like streaming music services, I just got 600 mb of data, I’m not gonna spend them listening music I can store on mi iPhone, also, I haven’t found a service that has all the music I want to listen, I’d rather own a song that I like and be able to listen it when I want.

    • emayteetee

      No offense but having only 600 MB is pointless on a smartphone, you can call text and email…on a feature phone for cheaper.

      • CAS

        I don’t agree, 600 mb can be a lot if you know how to use it, it’s what I can afford, that’s why spotify/pandora etc are not for me.

      • Sean Clark

        Spotify has an offline mode though. Download the songs on wifi, save them to your phone, and never use a byte of data. At the very least it fulfills the same role iTunes would while offering you any song you want.

      • CAS

        I know, but spotify library is not big enough for me, I got almost 5000 songs, why would I pay to listen a song I already own?

      • Lagax

        Because there is new music always and so you don’t have to buy it. At one album per month you would buy else, it is cheaper.

      • CAS

        I don’t buy $9.99 of music a month, there will be always bew music, but I’m not going to listen/pay for every new song :p

      • Sean Clark

        How do you own 5000 songs if you don’t buy an album’s worth a month?

      • CAS

        A lot of my music comes from old cd’s 🙂

  • James

    Google Play All Access is king. I know a lot apple fans think google is satan but its an incredible service. I even tried beats for a time and all access is better. The iOS app is great too.

    • emayteetee

      I tried it, I love the app for iOS and personally love the free version of it, but the all access pass didn’t have some of the tunes I love =

    • Lagax

      I also use it. Actually just because I bought it when I got 2€ off when they started the service in Germany, but the app crashes and is slow and there is no ipad version -> there is defense toy room for improvement.

  • ✪ aidan harris ✪

    Apple could just pull the Spotify app from the AppStore. They did this recently with a less popular streaming service…

    • websyndicate

      I bet your fun at parties. Negative Nancy….If you have tired sportily I recommend trying it for at least 3 months to see if you like it. Its a addictive. You don’t need to manager your music or store it and its everywhere you want to it to be.

      • ✪ aidan harris ✪

        Just an FYI but if you didn’t catch my sarcasm I was being sarcastic. I know Apple won’t pull spotify and yes I’ve tried Spotify and like it other than the fact I don’t own any of the music. If they allowed offline downloads with no DRM in a format of your choice and that could be permanantly kept then I’d be sold. I don’t mind using Spotifies free service though…

  • Kalil casseb

    I like the idea of streaming music, but in some cowntries is never going to work or work, but doesn’t work properly.
    The exemple of Brazil, the 3G sucks and 4G doesn’t work and a service plan is so expensive (USD 487.00 per month)

    • WTF!? You serious!? I’m guessing the minimum wage is $300 USD/hour…right?

  • Franklin Richards

    I just want a music streaming service to discover music. I don’t want to pay ‘N’ amount of money a month just for the company to go bust down the line and now you have to either forfeit playlist you built over the years or buy the songs one by one.

    • emayteetee

      Spotify for free if you want to discover. They have so many playlists based on moods, events, time of day, things you’re doing blah blah blah. Check it out.

  • MagicDrumSticks

    ITunes Air should be the name. Seems appropriate,
    Air = light, doesn’t use storage
    Streaming over the “air.”

    Would go nicely with iPad Air and MacBook Air.

    • Gustavo Adolfo Mirabal

      Cool story bro

      • MagicDrumSticks

        Thanks, I might write a book about it.

  • MarvinKleinpass

    I come from Germany… here are streaming services like Spotify more popular than itunes

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  • Lagax

    As you see, Apple should enter the market in Europe firstly! They haven’t even done that.