iTunes 12.0.0.87 Beta (Music)

It’s official: digital music sales on the iTunes Store decreased sharply this year, Apple has now officially admitted in an annual filing with the U.S. Securities and Exchange Commission covering its just-ended fiscal 2014 year.

Although sales of apps and In-App Purchases generated more revenue year-over-year, going from $9.3 billion in net sales during 2013 to a total of $10.2 billion during fiscal 2014, this was “partially offset by a decline in sales of digital music”.

Apple’s SEC filing serves as a confirmation of last week’s report by The Wall Street Journal which claimed that sales of digital music on iTunes had decrease between thirteen and fourteen percent since the beginning of 2014.

At the same time, streaming music services like Spotify and Rdio saw revenue jump 28 percent in the first half of 2014, the Recording Industry Association of America told WSJ.

“Growth in net sales from the iTunes Store was driven by increases in revenue from app sales reflecting continued growth in the installed base of iOS devices and the expanded offerings of iOS Apps and related in-App purchases,” wrote the firm in the SEC filing. “This was partially offset by a decline in sales of digital music”.

The App Store revenue climbed 36 percent over the year-ago quarter, Apple said last week in announcing results for its fiscal 2014 fourth quarter, adding the store topped 85 billion downloads since its inception in June of 2008.

Earlier this year, Apple purchased Beats Electronics’ headphones and audio accessories as well as the Beats Music subscription-based music service in a transaction valued at $3 billion, Apple’s largest acquisition to date.

“Apple is rebuilding Beats Music and plans to relaunch it next year as part of iTunes, according to a person familiar with the matter,” The Wall Streeet Journal wrote last week. Apple is also said to be looking to negotiate a discount with the labels that would see Beats Music subscribers paying half the price in the near future.

Just recently, the iPhone maker quietly phased out its hard drive based iPod classic because it was “no longer possible to source the necessary parts from anywhere in the world,” CEO Tim Cook has revealed during yesterday’s Q&A session at the Wall Street Journal’s inaugural WSJ.D Live conference at the Montage resort in Laguna Beach, California.

The iPod turned 13 last week.

[SEC via VentureBeat]

  • RarestName

    “no longer possible to source the necessary parts from anywhere in the world”

    Seems legit.

    • It does indeed seem legit. After all hardware has evolved so much it’s not to farfetched to think the older hardware might not be in production anymore and difficult to source so it should be retired…

  • Jason Baroni

    My money declined last year on iTunes purchases, too.

  • Robert Smith

    That’s what you get for rising the prices up!!!!!

    • Rowan09

      Prices always go up never down.

  • Eli Montoya

    Who needs to buy music when the radio repeats its songs anyways. Plus music subscriptions are up too. Like Netflix is to movie rentals.

    • blastingbigairs

      Except most of the selection on Netflix sucks.

  • Joe Naflish

    the music business is always a declining industry..from the decline in cassette sales due to cds, then decline of cd sales due to illegal downloading and now decline in itunes sales due to streaming.. and what do big labels do to save their own industry? almost none! innovation and reinventing the music sales through technology are mostly made by the people outside big labels..

  • Franklin Richards

    Perhaps that’s a wake up call to improve and extend the iTunes Radio and Beats Music service features and reach to other countries. Old Blighty was promised to get iTunes Radio early 2014. And yet all we got was a tease of what the icon would look like if it existed in the UK. I guess Tim Cook isn’t as “persuasive” as Steve.

  • Joonyaboy

    Spotify takes my money each month

  • Linton Findlay

    maybe music industry is declining anyway- lots of shit music

    • blastingbigairs

      I agree. As soon a Justin Beiber and Miley Cyrus were considered artists, it’s been down hill since. Turds!!!!

  • n0ahcruz3

    Streaming is here to stay, individual song purchase is unsustainable now. Even google play offers free album/song of the week or 99¢ album of the week promotions.