2013: The year music download sales started the decline

downloadBillboard‘s report on full-year 2013 digital album and track sales, showing the first-ever year-over-year decline since the iTunes Music Store launched, marks the end of one era and the start of another.

The headline numbers are simple: track sales down 5.7%; download album sales down a slim (but directionally significant) 0.1%. Internet radio and on-demand music services (the “access model”) would naturally seem to threaten sales of music units (the “ownership model”), just as those services disrupt radio broadcasting. A year-over-year decline evokes the image of the former model having peaked, and now starting a downward slide. “iTunes is a stepping stone along the way,” said Jim Griffin of OneHouse¬†on the 10th anniversary of the iTunes Store.

It’s no accident that Apple launched its iTunes Radio service in 2013.

The epoch of digital-music disruption can be divided into three periods. First, P2P file-sharing as the MP3 format caught on with consumers in the late 1990s. Second, the start of iTunes in 2003. Third, the rise of streaming music platforms.

But in real life, market epochs do not begin and end neatly. There is always overlap as conflicting consumer behaviors slosh against each other.¬†Subscription services actually started several years before the iTunes store was conceived, but they failed to attract a significant tide of users in the U.S. Of those early platforms, Rhapsody persists. But it was Spotify’s expansion of its free, ad-supported listening program into the American market that pivotally changed many conceptions of music ownership and listening. That trend, and the corresponding erosion of old-style music ownership, accelerated. With powerful new brands entering the space early this year (YouTube, Beats, Deezer), it is easy (or maybe just facile) to foretell a continued rise of access and fall of ownership.

Brad Hill