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]